- Tenet reported a net loss from continuing operations
attributable to Tenet common shareholders of $233 million, or $2.25
per diluted share, in the third quarter of 2019, primarily due to a
$180 million pre-tax loss, or $1.70 per diluted share, associated
with the Company’s debt refinancing transaction in the third
quarter of 2019 that reduces future annual cash interest payments
and retired all significant debt maturities until April 2022.
- Adjusted diluted earnings per share from continuing operations
were $0.58 in the third quarter of 2019, above the high end of the
Company’s Outlook.
- Adjusted EBITDA for the third quarter of 2019 was $631 million,
which was above the midpoint of the Company’s Outlook. Adjusted
EBITDA consisted of $334 million in the Hospital Operations and
other segment, $207 million in the Ambulatory Care segment and $90
million in the Conifer segment.
- Hospital segment same-hospital net patient service revenues
grew 5.8 percent in the third quarter of 2019: admissions increased
3.6 percent, adjusted admissions increased 2.8 percent and net
revenue per adjusted admission increased 2.9 percent. Adjusted
EBITDA in the hospital segment grew 7.1 percent.
- Ambulatory Care segment same-facility system-wide surgical
revenue grew 6.9 percent in the third quarter of 2019, with
surgical cases up 4.4 percent and surgical revenue per case up 2.5
percent. Adjusted EBITDA less facility-level noncontrolling
interest increased 17.5 percent.
- Conifer’s Adjusted EBITDA grew 11.1 percent and margins
increased 500 basis points to 26.8 percent.
- Updating 2019 Outlook for net operating revenue, net income,
earnings per share and Adjusted earnings per share; reiterating
previously provided 2019 Outlook for Adjusted EBITDA and Adjusted
Free Cash Flow.
Tenet Healthcare Corporation (NYSE: THC) today announced its
results for the third quarter ended September 30, 2019.
Ronald A. Rittenmeyer, Executive Chairman and CEO, said, “We had
a very positive third quarter with performance improvement in each
of our operating segments. For the third consecutive quarter, our
hospitals delivered accelerating volume growth and we generated
strong results at both USPI and Conifer. In addition to driving
improvements in our financial results, we made continued steady
progress on many of the core initiatives we established for 2019
and discussed at the beginning of the year, including cost savings,
physician recruitment, ambulatory acquisitions, marketing and board
refreshment. We exceeded the midpoint of our Adjusted EBITDA
Outlook in seven of the last eight quarters and exceeded the
midpoint of our Adjusted EPS Outlook for eight consecutive
quarters. While we have more to accomplish, we have established a
solid foundation for growth and performance.”
Rittenmeyer continued, “We also completed a $4.2 billion debt
refinancing and increased our line of credit borrowing capacity to
$1.5 billion. These actions enhance our financial flexibility,
reduce future interest payments and eliminate all significant debt
maturities until April 2022.”
Results for the Quarter Ended September
30, 2019
Tenet reported a net loss from continuing operations
attributable to Tenet common shareholders of $233 million, or $2.25
per diluted share, in the third quarter of 2019, primarily due to
the debt refinancing mentioned above, compared to a net loss of $9
million, or $0.09 per diluted share, in the third quarter of
2018.
Tenet produced Adjusted net income from continuing operations
available to Tenet common shareholders of $61 million, or $0.58 per
diluted share, in the third quarter of 2019, compared to $30
million, or $0.29 per diluted share, in the third quarter of
2018.
Adjusted EBITDA was $631 million in the third quarter of 2019
compared to $577 million in the third quarter of 2018, an increase
of 9.4 percent. Results in the third quarter of 2019 included $8
million of additional expense in the Hospital Operations and other
segment due to a decline in the treasury rate utilized to discount
our actuarial liabilities compared to a $6 million benefit in the
third quarter of 2018. The results for the quarter also included
decreased revenue and additional expenses related to Hurricane
Dorian as well as a one-time increase in contract labor due to a
one-day strike by union nurses at 12 of our hospitals.
Reconciliations of GAAP net income available (loss attributable)
to Tenet common shareholders to Adjusted net income available (loss
attributable) from continuing operations, Adjusted diluted earnings
(loss) per share from continuing operations and Adjusted EBITDA are
contained in Tables #1 and #2 at the end of this release.
Hospital Operations and Other Segment
Net operating revenues in the Hospital Operations and other
segment were $3.850 billion in the third quarter of 2019, up 2.3
percent from the third quarter of 2018. The increase in revenue was
primarily due to revenue growth on a same-hospital basis, partially
offset by hospital divestitures. Revenues included $58 million from
the California Provider Fee program in the third quarter of 2019
compared to $71 million in the third quarter of 2018.
On a same-hospital basis, net patient service revenues were
$3.562 billion in the third quarter of 2019, up 5.8 percent from
the third quarter of 2018. Admissions increased 3.6 percent on a
same-hospital basis, adjusted admissions increased 2.8 percent and
revenue per adjusted admission increased 2.9 percent. Surgeries
grew 0.8 percent and increased 3.2 percent including surgeries
performed at a USPI facility located in one of Tenet’s hospital
markets.
Adjusted EBITDA in Tenet’s hospital segment was $334 million in
the third quarter of 2019, an increase of 7.1 percent compared to
$312 million in the third quarter of 2018.
Selected operating expenses in the Hospital Operations and other
segment increased just 2.3 percent on a per adjusted admission
basis in the third quarter of 2019. Selected operating expenses
include salaries, wages and benefits, supplies and other operating
expenses and exclude the costs of the Company’s health plan
businesses.
Ambulatory Care Segment
The Ambulatory Care segment produced net operating revenues of
$522 million in the third quarter of 2019, an increase of 4.0
percent compared to $502 million in the third quarter of 2018.
After normalizing for the divestiture of Aspen Healthcare, the
Company’s former business in the U.K. which was sold in the third
quarter of 2018, the Ambulatory Care segment generated Adjusted
EBITDA of $207 million in the third quarter of 2019, up 13.7
percent from $182 million in the third quarter of 2018, and
Adjusted EBITDA less facility-level noncontrolling interest was
$134 million, up 17.5 percent from $114 million in the third
quarter of 2018. Aspen generated $21 million of revenue and $2
million of Adjusted EBITDA and Adjusted EBITDA less facility-level
noncontrolling interest in the third quarter of 2018.
The results of many of the facilities in which the Ambulatory
Care segment has an investment are not consolidated by Tenet (of
the 348 facilities at September 30, 2019, the results of 111 were
accounted for under the equity method for unconsolidated
affiliates). 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. On a
same-facility system-wide basis, revenue in the Ambulatory Care
segment increased 6.9 percent in the third quarter of 2019, with
cases increasing 5.1 percent and revenue per case increasing 1.7
percent. In the surgical business, which represents the majority of
the revenue in the Ambulatory segment, same-facility system-wide
revenue grew 6.9 percent in the third quarter of 2019, with cases
up 4.4 percent and revenue per case up 2.5 percent.
Conifer Segment
Conifer generated $90 million of Adjusted EBITDA in the third
quarter of 2019, up 11.1 percent from $81 million in the third
quarter of 2018. Adjusted EBITDA margins increased 500 basis points
to 26.8 percent primarily due to our continuing cost reduction
initiatives.
During the third quarter of 2019, Conifer’s revenue declined 9.4
percent to $336 million, from $371 million in the third quarter of
2018, primarily due to client attrition as a result of hospital
divestitures by Tenet and other customers. Revenue from third-party
customers declined 12.9 percent to $196 million in the third
quarter of 2019.
Results for the Nine Months Ended
September 30, 2019
Tenet reported a net loss from continuing operations
attributable to Tenet common shareholders of $245 million, or $2.37
per diluted share, in the first nine months of 2019 compared to net
income of $113 million, or $1.09 per diluted share, in the first
nine months of 2018. The 2019 period includes a $227 million
pre-tax loss from the extinguishment of debt, or $2.14 per diluted
share, including the aforementioned $180 million pre-tax loss, or
$1.70 per diluted share, recorded during the third quarter of 2019.
The 2018 period included a $111 million pre-tax gain, or $0.84 per
diluted share, from the sales, consolidation and deconsolidation of
facilities.
Tenet produced Adjusted net income from continuing operations
available to Tenet common shareholders of $176 million, or $1.68
per diluted share, in the first nine months of 2019, compared to
$140 million, or $1.35 per diluted share, in the first nine months
of 2018.
Adjusted EBITDA was $1.901 billion in the first nine months of
2019 compared to $1.876 billion in the first nine months of 2018,
an increase of $25 million or 1.3 percent. Items that lowered the
year-over-year growth in Adjusted EBITDA included: (i) a $51
million year-over-year increase in expense due to a decline in the
treasury rate used to discount the Company’s actuarial liabilities;
and, (ii) the divestiture of Aspen Healthcare, which generated $16
million of Adjusted EBITDA in the first nine months of 2018.
Hospital Operations and Other Segment
Net operating revenues in the Hospital Operations and other
segment were $11.539 billion in the first nine months of 2019, up
0.8 percent from the first nine months of 2018. Revenues included
$187 million from the California Provider Fee program in the first
nine months of 2019 compared to $198 million in the first nine
months of 2018.
On a same-hospital basis, net patient service revenues were
$10.666 billion in the first nine months of 2019, up 4.4 percent
from the first nine months of 2018. Admissions increased 2.2
percent on a same-hospital basis in the first nine months of 2019,
adjusted admissions increased 1.8 percent and revenue per adjusted
admission increased 2.5 percent. Surgeries declined 1.0 percent and
increased 1.2 percent including surgeries performed at a USPI
facility located in one of Tenet’s hospital markets.
Adjusted EBITDA in Tenet’s hospital segment was $1.018 billion
in the first nine months of 2019 compared to $1.059 billion in the
first nine months of 2018. The $41 million decline was primarily
due to a $51 million year-over-year increase in expense due to a
decline in the treasury rate used to discount the Company’s
actuarial liabilities.
Selected operating expenses in the Hospital Operations and other
segment increased 3.3 percent on a per adjusted admission basis in
the first nine months of 2019. Selected operating expenses include
salaries, wages and benefits, supplies and other operating expenses
and exclude the costs of the Company’s health plan businesses.
Ambulatory Care Segment
The Ambulatory Care segment produced net operating revenues of
$1.526 billion in the first nine months of 2019, a decrease of 0.3
percent compared to $1.531 billion in the first nine months of
2018. The decline in revenue was due to the divestiture of Aspen
Healthcare, which was completed in the third quarter of 2018. Aspen
generated $117 million of revenue and $16 million of Adjusted
EBITDA and Adjusted EBITDA less facility-level noncontrolling
interest in the first nine months of 2018. After normalizing for
the divestiture of Aspen, the Ambulatory Care segment generated
Adjusted EBITDA of $591 million in the first nine months of 2019,
up 11.3 percent from $531 million in the first nine months of 2018
and Adjusted EBITDA less facility-level noncontrolling interest was
$378 million, up 12.2 percent from $337 million in the first nine
months of 2018.
On a same-facility system-wide basis, revenue in the Ambulatory
Care segment increased 5.5 percent in the first nine months of
2019, with cases increasing 3.1 percent and revenue per case
increasing 2.3 percent. In the surgical business, which represents
the majority of the revenue in the Ambulatory segment,
same-facility system-wide revenue grew 5.5 percent in the first
nine months of 2019, with cases up 3.3 percent and revenue per case
up 2.1 percent.
Conifer Segment
Conifer generated $292 million of Adjusted EBITDA in the first
nine months of 2019, up 8.1 percent from $270 million in the first
nine months of 2018. Adjusted EBITDA margins increased 480 basis
points to 28.1 percent.
During the first nine months of 2019, Conifer’s revenue declined
10.4 percent to $1.040 billion, from $1.161 billion in the first
nine months of 2018 primarily due to client attrition as a result
of hospital divestitures by Tenet and other customers. Revenue from
third-party customers declined 15.7 percent to $608 million in the
first nine months of 2019.
Cash Flow and Liquidity
Cash and cash equivalents were $314 million at September 30,
2019 compared to $249 million at June 30, 2019. The Company had
$275 million of outstanding borrowings on its $1.5 billion credit
line as of September 30, 2019. Accounts receivable days outstanding
from continuing operations were 59.6 at September 30, 2019 compared
to 58.4 at June 30, 2019; the increase was primarily due to a
short-term disruption in collections in two markets following the
consolidation of two local business offices, which is expected to
reverse in future periods.
Net cash provided by operating activities was $713 million in
the first nine months of 2019, representing an $86 million decrease
compared to $799 million in the first nine months of 2018. This
decline is due in part to $81 million of interest payments being
accelerated into the three months ended September 30, 2019 from the
fourth quarter of 2019 ($72 million) and the first quarter of 2020
($9 million) as a result of our recent debt refinancing
transaction. After subtracting $492 million and $404 million of
capital expenditures in the first nine months of 2019 and 2018,
respectively, Free Cash Flow was $221 million in the first nine
months of 2019, a decrease of $174 million compared to Free Cash
Flow of $395 million in the first nine months of 2018. Adjusted
Free Cash Flow was $361 million in the first nine months of 2019,
representing a $151 million decrease from $512 million of Adjusted
Free Cash Flow in the first nine months of 2018.
Net cash used in investing activities was $426 million in the
first nine months of 2019 compared to $120 million of net cash
provided by investing activities in the first nine months of 2018.
Results in the first nine months of 2019 included $113 million of
proceeds from the sales of facilities, marketable securities,
long-term investments and other assets compared to $663 million in
the first nine months of 2018.
Net cash used in financing activities was $384 million in the
first nine months of 2019 compared to $1.030 billion used in the
first nine months of 2018 when the Company invested $630 million in
cash to increase its ownership in USPI from 80 percent to 95
percent.
Reconciliations of net cash provided by operating activities to
both Free Cash Flow and Adjusted Free Cash Flow are contained in
Table #3 at the end of this release.
Outlook
The Company’s Outlook for 2019 includes:
- Revenue of $18.350 billion to $18.550 billion,
- Net loss from continuing operations attributable to Tenet
common shareholders of $135 million to $230 million,
- Adjusted EBITDA of $2.650 billion to $2.750 billion,
- Net cash provided by operating activities of $1.045 billion to
$1.325 billion,
- Adjusted Free Cash Flow of $600 million to $800 million,
- Diluted loss per share from continuing operations of $1.31 to
$2.23, and
- Adjusted diluted earnings per share from continuing operations
of $2.25 to $2.91.
The Outlook for 2019 assumes California Provider Fee revenues of
approximately $246 million, equity in earnings of unconsolidated
affiliates of $170 million to $180 million, depreciation and
amortization expense of $830 million to $840 million, interest
expense of $985 million to $995 million, net income available to
noncontrolling interests of $390 million to $410 million and an
average diluted share count of 105 million.
The Company’s Outlook for the fourth quarter of 2019
includes:
- Revenue of $4.678 billion to $4.878 billion,
- Net income from continuing operations available to Tenet common
shareholders of $15 million to $110 million,
- Adjusted EBITDA of $749 million to $849 million,
- Diluted earnings per share from continuing operations of $0.14
to $1.04, and
- Adjusted diluted earnings per share from continuing operations
of $0.57 to $1.23.
The Outlook for the fourth quarter assumes California Provider
Fee revenues of approximately $59 million, equity in earnings of
unconsolidated affiliates of $56 million to $66 million,
depreciation and amortization expense of $203 million to $213
million, interest expense of $243 million to $253 million, net
income available to noncontrolling interests of $131 million to
$151 million, and an average diluted share count of 106
million.
Additional details on Tenet’s Outlook for both the fourth
quarter and calendar year 2019 are available in Tables #4, #5 and
#6 at the end of this press release and in an accompanying slide
presentation that will be accessible through the Company’s website
at www.tenethealth.com/investors.
Management’s Webcast Discussion of
Third Quarter Results
Tenet management will discuss the Company’s third quarter 2019
results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00
a.m. Central Time) on November 5, 2019. Investors can access the
webcast through the Company’s website at
www.tenethealth.com/investors. A set of slides, which will be
referred to on the conference call, will be available on the
Company’s website.
Additional information regarding Tenet’s quarterly results of
operations is contained in its Form 10-Q report for the period
ended September 30, 2019, which will be filed with the Securities
and Exchange Commission and posted on the Company’s website.
This press release includes certain non-GAAP measures, such as
Adjusted EBITDA, Adjusted net income available (loss attributable)
from continuing operations to Tenet common shareholders, 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 measures are contained in the tables at
the end of this release.
About Tenet Healthcare
Tenet Healthcare Corporation (NYSE: THC) is a diversified
healthcare services company headquartered in Dallas with 110,000
employees. Through an expansive care network that includes United
Surgical Partners International, we operate 65 hospitals and
approximately 500 other healthcare facilities, including surgical
hospitals, ambulatory surgery centers, urgent care and imaging
centers and other care sites and clinics. We also operate Conifer
Health Solutions, which provides revenue cycle management and
value-based care services to hospitals, health systems, physician
practices, employers and other customers. Across the Tenet
enterprise, we are united by our mission to deliver quality,
compassionate care in the communities we serve. For more
information, please visit www.tenethealth.com.
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,” “anticipate,” “assume,”
“believe,” “budget,” “estimate,” “forecast,” “intend,” “plan,”
“predict,” “project,” “seek,” “see,” “target,” 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, 2018, and subsequent Form 10-Q filings and other
filings with the Securities and Exchange Commission.
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in millions except per share
amounts)
Three Months Ended September
30,
2019
%
2018
%
Change
Net operating revenues
$
4,568
100.0
%
$
4,489
100.0
%
1.8
%
Equity in earnings of unconsolidated
affiliates
38
0.8
%
33
0.7
%
15.2
%
Operating expenses:
Salaries, wages and benefits
2,174
47.7
%
2,116
47.1
%
2.7
%
Supplies
760
16.6
%
726
16.2
%
4.7
%
Other operating expenses, net
1,042
22.8
%
1,094
24.4
%
(4.8
)%
Electronic health record incentives
—
—
%
—
—
%
—
%
Depreciation and amortization
205
4.5
%
204
4.5
%
Impairment and restructuring charges, and
acquisition-related costs
46
1.0
%
46
1.0
%
Litigation and investigation costs
84
1.8
%
9
0.2
%
Net losses on sales, consolidation and
deconsolidation of facilities
1
—
%
7
0.2
%
Operating income
294
6.4
%
320
7.1
%
Interest expense
(244
)
(249
)
Other non-operating expense, net
(3
)
—
Loss from early extinguishment of debt
(180
)
—
Income (loss) from continuing
operations, before income taxes
(133
)
71
Income tax expense
(20
)
(6
)
Income (loss) from continuing
operations, before discontinued operations
(153
)
65
Discontinued operations:
Income from operations
1
—
Income tax expense
—
—
Income from discontinued
operations
1
—
Net income (loss)
(152
)
65
Less: Net income available to
noncontrolling interests
80
74
Net loss attributable to Tenet
Healthcare Corporation common
shareholders
$
(232
)
$
(9
)
Amounts attributable to Tenet
Healthcare Corporation common
shareholders
Loss from continuing operations, net of
tax
$
(233
)
$
(9
)
Income from discontinued operations, net
of tax
1
—
Net loss attributable to Tenet
Healthcare Corporation common shareholders
$
(232
)
$
(9
)
Earnings (loss) per share available to
Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations
$
(2.25
)
$
(0.09
)
Discontinued operations
0.01
—
$
(2.24
)
$
(0.09
)
Diluted
Continuing operations
$
(2.25
)
$
(0.09
)
Discontinued operations
0.01
—
$
(2.24
)
$
(0.09
)
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
103,558
102,402
Diluted*
103,558
102,402
*
Had we generated income from continuing
operations available to common shareholders in the three months
ended September 30, 2019 and 2018 the effect of employee stock
options, restricted stock units and deferred compensation units on
the diluted shares calculation would have been an increase of 1,024
thousand and 2,173 thousand shares, respectively.
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in millions except per share
amounts)
Nine Months Ended September
30,
2019
%
2018
%
Change
Net operating revenues
$
13,673
100.0
%
$
13,694
100.0
%
(0.2
)%
Equity in earnings of unconsolidated
affiliates
114
0.8
%
97
0.7
%
17.5
%
Operating expenses:
Salaries, wages and benefits
6,475
47.4
%
6,478
47.3
%
0.0
%
Supplies
2,254
16.5
%
2,248
16.4
%
0.3
%
Other operating expenses, net
3,160
23.1
%
3,181
23.2
%
(0.7
)%
Electronic health record incentives
(1
)
—
%
(1
)
—
%
—
%
Depreciation and amortization
627
4.6
%
602
4.4
%
Impairment and restructuring charges, and
acquisition-related costs
101
0.7
%
123
0.9
%
Litigation and investigation costs
115
0.8
%
28
0.2
%
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
3
—
%
(111
)
(0.8
)%
Operating income
1,053
7.7
%
1,243
9.1
%
Interest expense
(742
)
(758
)
Other non-operating expense, net
(3
)
(2
)
Loss from early extinguishment of debt
(227
)
(2
)
Income from continuing operations,
before income taxes
81
481
Income tax expense
(67
)
(120
)
Income from continuing operations,
before discontinued operations
14
361
Discontinued operations:
Income from operations
13
3
Income tax expense
(2
)
—
Income from discontinued
operations
11
3
Net income
25
364
Less: Net income available to
noncontrolling interests
259
248
Net income available (loss
attributable) to Tenet Healthcare Corporation
common shareholders
$
(234
)
$
116
Amounts available (attributable) to
Tenet Healthcare Corporation
common shareholders
Income (loss) from continuing operations,
net of tax
$
(245
)
$
113
Income from discontinued operations, net
of tax
11
3
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(234
)
$
116
Earnings (loss) per share available
(attributable) to Tenet Healthcare Corporation common
shareholders:
Basic
Continuing operations
$
(2.37
)
$
1.11
Discontinued operations
0.11
0.03
$
(2.26
)
$
1.14
Diluted
Continuing operations
$
(2.37
)
$
1.09
Discontinued operations
0.11
0.03
$
(2.26
)
$
1.12
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
103,181
101,980
Diluted*
103,181
103,802
*
Had we generated income from continuing
operations available to common shareholders in the nine months
ended September 30, 2019 the effect of employee stock options,
restricted stock units and deferred compensation units on the
diluted shares calculation would have been an increase of
1,403 thousand shares.
TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,
December 31,
(Dollars in millions)
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
314
$
411
Accounts receivable
2,768
2,595
Inventories of supplies, at cost
311
305
Income tax receivable
18
21
Assets held for sale
—
107
Other current assets
1,378
1,197
Total current assets
4,789
4,636
Investments and other assets
2,380
1,456
Deferred income taxes
252
312
Property and equipment, at cost, less
accumulated depreciation and amortization
7,001
6,993
Goodwill
7,315
7,281
Other intangible assets, at cost, less
accumulated amortization
1,620
1,731
Total assets
$
23,357
$
22,409
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
165
$
182
Accounts payable
1,125
1,207
Accrued compensation and benefits
842
838
Professional and general liability
reserves
230
216
Accrued interest payable
252
240
Liabilities held for sale
—
43
Other current liabilities
1,314
1,131
Total current liabilities
3,928
3,857
Long-term debt, net of current portion
14,858
14,644
Professional and general liability
reserves
671
666
Defined benefit plan obligations
495
521
Deferred income taxes
36
36
Other long-term liabilities
1,405
578
Total liabilities
21,393
20,302
Commitments and contingencies
Redeemable noncontrolling interests in
equity of consolidated subsidiaries
1,475
1,420
Equity:
Shareholders’ equity:
Common stock
7
7
Additional paid-in capital
4,751
4,747
Accumulated other comprehensive loss
(216
)
(223
)
Accumulated deficit
(2,469
)
(2,236
)
Common stock in treasury, at cost
(2,414
)
(2,414
)
Total shareholders’ deficit
(341
)
(119
)
Noncontrolling interests
830
806
Total equity
489
687
Total liabilities and equity
$
23,357
$
22,409
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
Nine Months Ended
(Dollars in millions)
September 30,
2019
2018
Net income
$
25
$
364
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization
627
602
Deferred income tax expense
57
110
Stock-based compensation expense
34
34
Impairment and restructuring charges, and
acquisition-related costs
101
123
Litigation and investigation costs
115
28
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
3
(111
)
Loss from early extinguishment of debt
227
2
Equity in earnings of unconsolidated
affiliates, net of distributions received
(6
)
9
Amortization of debt discount and debt
issuance costs
25
33
Pre-tax income from discontinued
operations
(13
)
(3
)
Other items, net
(14
)
(22
)
Changes in cash from operating assets
and liabilities:
Accounts receivable
(174
)
(36
)
Inventories and other current assets
(98
)
73
Income taxes
(4
)
(14
)
Accounts payable, accrued expenses and
other current liabilities
(37
)
(194
)
Other long-term liabilities
(15
)
(82
)
Payments for restructuring charges,
acquisition-related costs, and litigation costs and
settlements
(136
)
(113
)
Net cash used in operating activities
from discontinued operations, excluding income taxes
(4
)
(4
)
Net cash provided by operating
activities
713
799
Cash flows from investing
activities:
Purchases of property and equipment —
continuing operations
(492
)
(404
)
Purchases of businesses or joint venture
interests, net of cash acquired
(23
)
(97
)
Proceeds from sales of facilities and
other assets — continuing operations
44
498
Proceeds from sales of facilities and
other assets — discontinued operations
17
—
Proceeds from sales of marketable
securities, long-term investments and other assets
52
165
Purchases of equity investments
(14
)
(43
)
Other long-term assets
1
5
Other items, net
(11
)
(4
)
Net cash provided by (used in)
investing activities
(426
)
120
Cash flows from financing
activities:
Repayments of borrowings under credit
facility
(1,880
)
(505
)
Proceeds from borrowings under credit
facility
2,155
505
Repayments of other borrowings
(6,084
)
(238
)
Proceeds from other borrowings
5,718
15
Debt issuance costs
(63
)
—
Distributions paid to noncontrolling
interests
(223
)
(217
)
Proceeds from sales of noncontrolling
interests
15
14
Purchases of noncontrolling interests
(8
)
(643
)
Proceeds from exercise of stock options
and employee stock purchase plan
4
15
Other items, net
(18
)
24
Net cash used in financing
activities
(384
)
(1,030
)
Net decrease in cash and cash
equivalents
(97
)
(111
)
Cash and cash equivalents at beginning of
period
411
611
Cash and cash equivalents at end of
period
$
314
$
500
Supplemental disclosures:
Interest paid, net of capitalized
interest
$
(705
)
$
(652
)
Income tax payments, net
$
(18
)
$
(24
)
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING
TOTAL HOSPITALS(1)
(Unaudited)
(Dollars in millions except per adjusted
patient day
Three Months Ended September
30,
Nine Months Ended September
30,
and per adjusted patient admission
amounts)
2019
2018
Change
2019
2018
Change
Admissions, Patient Days and
Surgeries
Number of hospitals (at end of period)
65
68
(3
)
*
65
68
(3
)
*
Total admissions
170,004
168,201
1.1
%
514,082
518,960
(0.9
)%
Adjusted patient admissions
306,535
306,197
0.1
%
918,734
933,128
(1.5
)%
Paying admissions (excludes charity and
uninsured)
159,299
157,193
1.3
%
483,220
487,899
(1.0
)%
Charity and uninsured admissions
10,705
11,008
(2.8
)%
30,862
31,061
(0.6
)%
Admissions through emergency
department
120,915
116,727
3.6
%
368,082
356,839
3.2
%
Paying admissions as a percentage of total
admissions
93.7
%
93.5
%
0.2
%
*
94.0
%
94.0
%
—
%
*
Charity and uninsured admissions as a
percentage of total admissions
6.3
%
6.5
%
(0.2
)%
*
6.0
%
6.0
%
—
%
*
Emergency department admissions as a
percentage of total admissions
71.1
%
69.4
%
1.7
%
*
71.6
%
68.8
%
2.8
%
*
Surgeries — inpatient
45,637
45,626
—
%
135,073
139,123
(2.9
)%
Surgeries — outpatient
60,099
61,468
(2.2
)%
179,253
188,281
(4.8
)%
Total surgeries
105,736
107,094
(1.3
)%
314,326
327,404
(4.0
)%
Patient days — total
782,643
761,920
2.7
%
2,392,304
2,387,087
0.2
%
Adjusted patient days
1,381,862
1,365,662
1.2
%
4,189,961
4,225,281
(0.8
)%
Average length of stay (days)
4.60
4.53
1.5
%
4.65
4.60
1.1
%
Licensed beds (at end of period)
17,206
18,302
(6.0
)%
17,206
18,302
(6.0
)%
Average licensed beds
17,208
18,302
(6.0
)%
17,295
18,450
(6.3
)%
Utilization of licensed beds
49.4
%
45.3
%
4.1
%
*
50.7
%
47.4
%
3.3
%
*
Outpatient Visits
Total visits
1,673,801
1,722,292
(2.8
)%
5,081,998
5,314,678
(4.4
)%
Paying visits (excludes charity and
uninsured)
1,562,007
1,607,184
(2.8
)%
4,747,249
4,966,532
(4.4
)%
Charity and uninsured visits
111,794
115,108
(2.9
)%
334,749
348,146
(3.8
)%
Emergency department visits
627,055
638,248
(1.8
)%
1,921,611
1,978,285
(2.9
)%
Paying visits as a percentage of total
visits
93.3
%
93.3
%
—
%
*
93.4
%
93.4
%
—
%
*
Charity and uninsured visits as a
percentage of total visits
6.7
%
6.7
%
—
%
*
6.6
%
6.6
%
—
%
*
Total emergency department admissions and
visits
747,970
754,975
(0.9
)%
2,289,693
2,335,124
(1.9
)%
Revenues
Net patient service revenues(3)
$
3,566
$
3,434
3.8
%
$
10,695
$
10,520
1.7
%
Revenues Per Adjusted Patient Admission
and Per Adjusted Patient Day Basis
Net patient service revenue(3) per
adjusted patient admission
$
11,633
$
11,215
3.7
%
$
11,641
$
11,274
3.3
%
Net patient service revenue(3) per
adjusted patient day
$
2,581
$
2,515
2.6
%
$
2,553
$
2,490
2.5
%
Total selected operating expenses
(salaries, wages and benefits, supplies and other operating
expenses) per adjusted patient admission(2)
$
11,021
$
10,771
2.3
%
$
10,996
$
10,648
3.3
%
Net patient service revenues(3)
from:
Medicare
19.6
%
19.8
%
(0.2
)%
*
20.4
%
20.6
%
(0.2
)%
*
Medicaid
8.0
%
9.8
%
(1.8
)%
*
8.6
%
9.2
%
(0.6
)%
*
Managed care
66.1
%
64.9
%
1.2
%
*
65.8
%
65.3
%
0.5
%
*
Uninsured
1.2
%
0.9
%
0.3
%
*
0.5
%
0.7
%
(0.2
)%
*
Indemnity and other
5.1
%
4.6
%
0.5
%
*
4.7
%
4.2
%
0.5
%
*
(1)
Represents the consolidated results of
Tenet’s acute care hospitals and related outpatient facilities
included in the Hospital Operations and other segment.
(2)
Excludes operating expenses from Tenet’s
health plans.
(3)
Less implicit price concessions. * This
change is the difference between the 2019 and 2018 amounts
shown.
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING
SAME HOSPITALS(1)
(Unaudited)
(Dollars in millions except per adjusted
patient day
Three Months Ended September
30,
Nine Months Ended September
30,
and per adjusted patient admission
amounts)
2019
2018
Change
2019
2018
Change
Admissions, Patient Days and
Surgeries
Number of hospitals (at end of period)
65
65
—
65
65
—
*
Total admissions
170,004
164,075
3.6
%
512,826
501,662
2.2
%
Adjusted patient admissions
306,535
298,221
2.8
%
916,472
899,826
1.8
%
Paying admissions (excludes charity and
uninsured)
159,300
153,227
4.0
%
482,061
471,282
2.3
%
Charity and uninsured admissions
10,704
10,848
(1.3
)%
30,765
30,380
1.3
%
Admissions through emergency
department
120,915
113,833
6.2
%
367,231
345,692
6.2
%
Paying admissions as a percentage of total
admissions
93.7
%
93.4
%
0.3
%
94.0
%
93.9
%
0.1
%
*
Charity and uninsured admissions as a
percentage of total admissions
6.3
%
6.6
%
(0.3
)%
6.0
%
6.1
%
(0.1
)%
*
Emergency department admissions as a
percentage of total admissions
71.1
%
69.4
%
1.7
%
71.6
%
68.9
%
2.7
%
*
Surgeries — inpatient
45,637
44,783
1.9
%
134,831
135,026
(0.1
)%
Surgeries — outpatient
60,099
60,080
—
%
178,931
182,005
(1.7
)%
Total surgeries
105,736
104,863
0.8
%
313,762
317,031
(1.0
)%
Patient days — total
782,643
740,870
5.6
%
2,385,554
2,301,312
3.7
%
Adjusted patient days
1,381,862
1,325,229
4.3
%
4,177,844
4,060,712
2.9
%
Average length of stay (days)
4.60
4.52
1.8
%
4.65
4.59
1.3
%
Licensed beds (at end of period)
17,206
17,234
(0.2
)%
17,206
17,234
(0.2
)%
Average licensed beds
17,208
17,234
(0.2
)%
17,217
17,242
(0.1
)%
Utilization of licensed beds
49.4
%
46.7
%
2.7
%
50.8
%
48.9
%
1.9
%
*
Outpatient Visits
Total visits
1,673,801
1,647,013
1.6
%
5,054,470
5,036,965
0.3
%
Paying visits (excludes charity and
uninsured)
1,562,010
1,536,247
1.7
%
4,721,200
4,704,391
0.4
%
Charity and uninsured visits
111,791
110,766
0.9
%
333,270
332,574
0.2
%
Emergency department visits
627,055
617,925
1.5
%
1,916,014
1,904,545
0.6
%
Paying visits as a percentage of total
visits
93.3
%
93.3
%
—
%
93.4
%
93.4
%
—
%
*
Charity and uninsured visits as a
percentage of total visits
6.7
%
6.7
%
—
%
6.6
%
6.6
%
—
%
*
Total emergency department admissions and
visits
747,970
731,758
2.2
%
2,283,245
2,250,237
1.5
%
Revenues
Net patient service revenues(2)
$
3,562
$
3,367
5.8
%
$
10,666
$
10,217
4.4
%
Revenues Per Adjusted Patient Admission
and Per Adjusted Patient Day Basis
Net patient service revenue(2) per
adjusted patient admission
$
11,620
$
11,290
2.9
%
$
11,638
$
11,354
2.5
%
Net patient service revenue(2) per
adjusted patient day
$
2,578
$
2,541
1.5
%
$
2,553
$
2,516
1.5
%
Net patient service revenues(2)
from:
Medicare
19.5
%
19.5
%
—
%
20.2
%
20.2
%
—
%
*
Medicaid
8.0
%
9.8
%
(1.8
)%
8.6
%
9.1
%
(0.5
)%
*
Managed care
66.2
%
65.2
%
1.0
%
65.9
%
65.6
%
0.3
%
*
Uninsured
1.2
%
0.9
%
0.3
%
0.5
%
0.8
%
(0.3
)%
*
Indemnity and other
5.1
%
4.6
%
0.5
%
4.8
%
4.3
%
0.5
%
*
(1)
Information for our Hospital Operations
and other segment is presented on a same-hospital basis, which
includes the results of our same 65 hospitals operated
throughout the nine months ended September 30, 2019 and 2018
and associated outpatient facilities, but excludes the results of
hospitals Tenet divested since January 1, 2018.
(2)
Less implicit price concessions.
* This change is the difference between the 2019 and 2018
amounts shown.
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in millions except per share
amounts)
Three Months Ended
Nine Months Ended
3/31/2019
6/30/2019
9/30/2019
9/30/2019
Net operating revenues
$
4,545
$
4,560
$
4,568
$
13,673
Equity in earnings of unconsolidated
affiliates
34
42
38
114
Operating expenses:
Salaries, wages and benefits
2,153
2,148
2,174
6,475
Supplies
741
753
760
2,254
Other operating expenses, net
1,074
1,044
1,042
3,160
Electronic health record incentives
(1
)
—
—
(1
)
Depreciation and amortization
208
214
205
627
Impairment and restructuring charges, and
acquisition-related costs
19
36
46
101
Litigation and investigation costs
13
18
84
115
Net losses on sales, consolidation and
deconsolidation of facilities
1
1
1
3
Operating income
371
388
294
1,053
Interest expense
(251
)
(247
)
(244
)
(742
)
Other non-operating income (expense),
net
1
(1
)
(3
)
(3
)
Loss from early extinguishment of debt
(47
)
—
(180
)
(227
)
Income (loss) from continuing
operations, before income taxes
74
140
(133
)
81
Income tax expense
(17
)
(30
)
(20
)
(67
)
Income (loss) from continuing
operations, before discontinued
operations
57
110
(153
)
14
Discontinued operations:
Income from operations
10
2
1
13
Income tax expense
(2
)
—
—
(2
)
Income from discontinued
operations
8
2
1
11
Net income (loss)
65
112
(152
)
25
Less: Net income available to
noncontrolling interests
84
95
80
259
Net income available (loss
attributable) to Tenet Healthcare Corporation
common shareholders
$
(19
)
$
17
$
(232
)
$
(234
)
Amounts available (attributable) to
Tenet Healthcare Corporation
common shareholders
Income (loss) from continuing operations,
net of tax
$
(27
)
$
15
$
(233
)
$
(245
)
Income from discontinued operations, net
of tax
8
2
1
11
Net income available (loss
attributable) to Tenet Healthcare
Corporation common shareholders
$
(19
)
$
17
$
(232
)
$
(234
)
Earnings (loss) per share available
(attributable) to Tenet Healthcare
Corporation common
shareholders:
Basic
Continuing operations
$
(0.26
)
$
0.15
$
(2.25
)
$
(2.37
)
Discontinued operations
0.08
0.02
0.01
0.11
$
(0.18
)
$
0.17
$
(2.24
)
$
(2.26
)
Diluted
Continuing operations
$
(0.26
)
$
0.14
$
(2.25
)
$
(2.37
)
Discontinued operations
0.08
0.02
0.01
0.11
$
(0.18
)
$
0.16
$
(2.24
)
$
(2.26
)
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
102,788
103,198
103,558
103,181
Diluted
102,788
104,629
103,558
103,181
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in millions except per share
amounts)
Three Months Ended
Year Ended
3/31/2018
6/30/2018
9/30/2018
12/31/2018
12/31/2018
Net operating revenues
$
4,699
$
4,506
$
4,489
$
4,619
$
18,313
Equity in earnings of unconsolidated
affiliates
25
39
33
53
150
Operating expenses:
Salaries, wages and benefits
2,227
2,135
2,116
2,156
8,634
Supplies
774
748
726
756
3,004
Other operating expenses, net
1,060
1,027
1,094
1,078
4,259
Electronic health record incentives
(1
)
—
—
(2
)
(3
)
Depreciation and amortization
204
194
204
200
802
Impairment and restructuring charges, and
acquisition-related costs
47
30
46
86
209
Litigation and investigation costs
6
13
9
10
38
Net losses (gains) on sales, consolidation
and deconsolidation of
facilities
(110
)
(8
)
7
(16
)
(127
)
Operating income
517
406
320
404
1,647
Interest expense
(255
)
(254
)
(249
)
(246
)
(1,004
)
Other non-operating expense, net
(1
)
(1
)
—
(3
)
(5
)
Gain (loss) from early extinguishment of
debt
(1
)
(1
)
—
3
1
Income from continuing operations,
before income taxes
260
150
71
158
639
Income tax expense
(70
)
(44
)
(6
)
(56
)
(176
)
Income from continuing operations,
before discontinued
operations
190
106
65
102
463
Discontinued operations:
Income from operations
1
2
—
1
4
Income tax expense
—
—
—
(1
)
(1
)
Income from discontinued
operations
1
2
—
—
3
Net income
191
108
65
102
466
Less: Net income available to
noncontrolling interests
92
82
74
107
355
Net income available (loss
attributable) to Tenet Healthcare
Corporation common shareholders
$
99
$
26
$
(9
)
$
(5
)
$
111
Amounts available (attributable) to
Tenet Healthcare
Corporation common shareholders
Income (loss) from continuing operations,
net of tax
$
98
$
24
$
(9
)
$
(5
)
$
108
Income from discontinued operations, net
of tax
1
2
—
—
3
Net income available (loss
attributable) to Tenet Healthcare
Corporation common shareholders
$
99
$
26
$
(9
)
$
(5
)
$
111
Earnings (loss) per share available
(attributable) to Tenet
Healthcare Corporation common
shareholders:
Basic
Continuing operations
$
0.97
$
0.23
$
(0.09
)
$
(0.05
)
$
1.06
Discontinued operations
0.01
0.02
—
—
0.03
$
0.98
$
0.25
$
(0.09
)
$
(0.05
)
$
1.09
Diluted
Continuing operations
$
0.95
$
0.23
$
(0.09
)
$
(0.05
)
$
1.04
Discontinued operations
0.01
0.02
—
—
0.03
$
0.96
$
0.25
$
(0.09
)
$
(0.05
)
$
1.07
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
101,392
102,147
102,402
102,501
102,110
Diluted
102,656
104,177
102,402
102,501
103,881
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING
TOTAL HOSPITALS(1)
(Unaudited)
(Dollars in millions except per adjusted
patient day
and per adjusted patient admission
amounts)
Three Months Ended
Nine Months Ended
3/31/2019
6/30/2019
9/30/2019
09/30/2019
Admissions, Patient Days and
Surgeries
Number of hospitals (at end of period)
65
65
65
65
Total admissions
174,726
169,352
170,004
514,082
Adjusted patient admissions
308,133
304,066
306,535
918,734
Paying admissions (excludes charity and
uninsured)
164,793
159,128
159,299
483,220
Charity and uninsured admissions
9,933
10,224
10,705
30,862
Admissions through emergency
department
126,079
121,088
120,915
368,082
Paying admissions as a percentage of total
admissions
94.3
%
94.0
%
93.7
%
94.0
%
Charity and uninsured admissions as a
percentage of total admissions
5.7
%
6.0
%
6.3
%
6.0
%
Emergency department admissions as a
percentage of total admissions
72.2
%
71.5
%
71.1
%
71.6
%
Surgeries — inpatient
44,795
44,641
45,637
135,073
Surgeries — outpatient
58,218
60,936
60,099
179,253
Total surgeries
103,013
105,577
105,736
314,326
Patient days — total
822,079
787,582
782,643
2,392,304
Adjusted patient days
1,420,170
1,387,929
1,381,862
4,189,961
Average length of stay (days)
4.70
4.65
4.60
4.65
Licensed beds (at end of period)
17,221
17,221
17,206
17,206
Average licensed beds
17,455
17,221
17,208
17,295
Utilization of licensed beds
52.3
%
50.3
%
49.4
%
50.7
%
Outpatient Visits
Total visits
1,714,392
1,693,805
1,673,801
5,081,998
Paying visits (excludes charity and
uninsured)
1,603,712
1,581,530
1,562,007
4,747,249
Charity and uninsured visits
110,680
112,275
111,794
334,749
Emergency department visits
657,449
637,107
627,055
1,921,611
Paying visits as a percentage of total
visits
93.5
%
93.4
%
93.3
%
93.4
%
Charity and uninsured visits as a
percentage of total visits
6.5
%
6.6
%
6.7
%
6.6
%
Total emergency department admissions and
visits
783,528
758,195
747,970
2,289,693
Revenues
Net patient service revenues(3)
$
3,582
$
3,547
$
3,566
$
10,695
Revenues Per Adjusted Patient Admission
and Per Adjusted Patient Day Basis
Net patient service revenue(3) per
adjusted patient admission
$
11,625
$
11,665
$
11,633
$
11,641
Net patient service revenue(3) per
adjusted patient day
$
2,522
$
2,556
$
2,581
$
2,553
Total selected operating expenses
(salaries, wages and benefits, supplies and other operating
expenses) per adjusted patient admission(2)
$
10,979
$
10,988
$
11,021
$
10,996
Net patient service revenues(3)
from:
Medicare
21.2
%
20.3
%
19.6
%
20.4
%
Medicaid
8.8
%
8.9
%
8.0
%
8.6
%
Managed care
65.7
%
65.7
%
66.1
%
65.8
%
Uninsured
—
%
0.3
%
1.2
%
0.5
%
Indemnity and other
4.3
%
4.8
%
5.1
%
4.7
%
(1)
Represents the consolidated results of
Tenet’s acute care hospitals and related outpatient facilities
included in the Hospital Operations and other segment.
(2)
Excludes operating expenses from Tenet’s
health plans.
(3)
Less implicit price concessions.
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING
TOTAL HOSPITALS(1)
(Unaudited)
(Dollars in millions except per adjusted
patient day
and per adjusted patient admission
amounts)
Three Months Ended
Year Ended
3/31/2018
6/30/2018
9/30/2018
12/31/2018
12/31/2018
Admissions, Patient Days and
Surgeries
Number of hospitals (at end of period)
69
68
68
68
68
Total admissions
182,306
168,453
168,201
170,407
689,367
Adjusted patient admissions
320,868
306,063
306,197
308,113
1,241,241
Paying admissions (excludes charity and
uninsured)
172,490
158,216
157,193
160,172
648,071
Charity and uninsured admissions
9,816
10,237
11,008
10,235
41,296
Admissions through emergency
department
125,076
115,036
116,727
120,012
476,851
Paying admissions as a percentage of total
admissions
94.6
%
93.9
%
93.5
%
94.0
%
94.0
%
Charity and uninsured admissions as a
percentage of total admissions
5.4
%
6.1
%
6.5
%
6.0
%
6.0
%
Emergency department admissions as a
percentage of total admissions
68.6
%
68.3
%
69.4
%
70.4
%
69.2
%
Surgeries — inpatient
47,223
46,274
45,626
45,897
185,020
Surgeries — outpatient
63,008
63,805
61,468
62,638
250,919
Total surgeries
110,231
110,079
107,094
108,535
435,939
Patient days — total
858,648
766,519
761,920
779,728
3,166,815
Adjusted patient days
1,486,139
1,373,480
1,365,662
1,383,372
5,608,653
Average length of stay (days)
4.71
4.55
4.53
4.58
4.59
Licensed beds (at end of period)
18,457
18,314
18,302
17,937
17,937
Average licensed beds
18,685
18,362
18,302
17,935
18,321
Utilization of licensed beds
51.1
%
45.9
%
45.3
%
47.3
%
47.4
%
Outpatient Visits
Total visits
1,842,539
1,749,847
1,722,292
1,734,523
7,049,201
Paying visits (excludes charity and
uninsured)
1,725,976
1,633,372
1,607,184
1,617,970
6,584,502
Charity and uninsured visits
116,563
116,475
115,108
116,553
464,699
Emergency department visits
697,001
643,036
638,248
649,544
2,627,829
Paying visits as a percentage of total
visits
93.7
%
93.3
%
93.3
%
93.3
%
93.4
%
Charity and uninsured visits as a
percentage of total visits
6.3
%
6.7
%
6.7
%
6.7
%
6.6
%
Total emergency department admissions and
visits
822,077
758,072
754,975
769,556
3,104,680
Revenues
Net patient service revenues(3)
$
3,643
$
3,443
$
3,434
$
3,561
$
14,081
Revenues Per Adjusted Patient Admission
and Per Adjusted Patient Day Basis
Net patient service revenue(3) per
adjusted patient admission
$
11,354
$
11,249
$
11,215
$
11,557
$
11,344
Net patient service revenue(3) per
adjusted patient day
$
2,451
$
2,507
$
2,515
$
2,574
$
2,511
Total selected operating expenses
(salaries, wages and benefits, supplies and other operating
expenses) per adjusted patient admission(2)
$
10,561
$
10,619
$
10,771
$
10,861
$
10,701
Net patient service revenues(3)
from:
Medicare
21.5
%
20.4
%
19.8
%
20.1
%
20.5
%
Medicaid
8.8
%
9.1
%
9.8
%
9.1
%
9.2
%
Managed care
65.0
%
66.0
%
64.9
%
65.8
%
65.4
%
Uninsured
1.0
%
0.2
%
0.9
%
0.5
%
0.7
%
Indemnity and other
3.7
%
4.3
%
4.6
%
4.5
%
4.2
%
(1)
Represents the consolidated results of
Tenet’s acute care hospitals and related outpatient facilities
included in the Hospital Operations and other segment.
(2)
Excludes operating expenses from Tenet’s
health plans.
(3)
Less implicit price concessions.
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING
SAME HOSPITALS(1)
(Unaudited)
(Dollars in millions except per adjusted
patient day
and per adjusted patient admission
amounts)
Three Months Ended
Nine Months Ended
3/31/2019
6/30/2019
9/30/2019
9/30/2019
Admissions, Patient Days and
Surgeries
Number of hospitals (at end of period)
65
65
65
65
Total admissions
173,470
169,352
170,004
512,826
Adjusted patient admissions
305,871
304,066
306,535
916,472
Paying admissions (excludes charity and
uninsured)
163,632
159,129
159,300
482,061
Charity and uninsured admissions
9,838
10,223
10,704
30,765
Admissions through emergency
department
125,228
121,088
120,915
367,231
Paying admissions as a percentage of total
admissions
94.3
%
94.0
%
93.7
%
94.0
%
Charity and uninsured admissions as a
percentage of total admissions
5.7
%
6.0
%
6.3
%
6.0
%
Emergency department admissions as a
percentage of total admissions
72.2
%
71.5
%
71.1
%
71.6
%
Surgeries — inpatient
44,553
44,641
45,637
134,831
Surgeries — outpatient
57,896
60,936
60,099
178,931
Total surgeries
102,449
105,577
105,736
313,762
Patient days — total
815,329
787,582
782,643
2,385,554
Adjusted patient days
1,408,053
1,387,929
1,381,862
4,177,844
Average length of stay (days)
4.70
4.65
4.60
4.65
Licensed beds (at end of period)
17,221
17,221
17,206
17,206
Average licensed beds
17,221
17,221
17,208
17,217
Utilization of licensed beds
52.6
%
50.3
%
49.4
%
50.8
%
Outpatient Visits
Total visits
1,686,864
1,693,805
1,673,801
5,054,470
Paying visits (excludes charity and
uninsured)
1,577,635
1,581,555
1,562,010
4,721,200
Charity and uninsured visits
109,229
112,250
111,791
333,270
Emergency department visits
651,852
637,107
627,055
1,916,014
Paying visits as a percentage of total
visits
93.5
%
93.4
%
93.3
%
93.4
%
Charity and uninsured visits as a
percentage of total visits
6.5
%
6.6
%
6.7
%
6.6
%
Total emergency department admissions and
visits
777,080
758,195
747,970
2,283,245
Revenues
Net patient service revenues(2)
$
3,557
$
3,547
$
3,562
$
10,666
Revenues Per Adjusted Patient Admission
and Per Adjusted Patient Day Basis
Net patient service revenue(2) per
adjusted patient admission
$
11,629
$
11,665
$
11,620
$
11,638
Net patient service revenue(2) per
adjusted patient day
$
2,526
$
2,556
$
2,578
$
2,553
Net patient service revenues(2)
from:
Medicare
21.0
%
20.3
%
19.5
%
20.2
%
Medicaid
8.8
%
8.9
%
8.0
%
8.6
%
Managed care
65.9
%
65.7
%
66.2
%
65.9
%
Uninsured
—
%
0.3
%
1.2
%
0.5
%
Indemnity and other
4.3
%
4.8
%
5.1
%
4.8
%
(1)
Information for our Hospital Operations
and other segment is presented on a same-hospital basis, which
includes the results of our same 65 hospitals operated throughout
the nine months ended September 30, 2019 and 2018 and
associated outpatient facilities, but excludes the results of
hospitals Tenet divested since January 1, 2018.
(2)
Less implicit price concessions.
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING
SAME HOSPITALS(1)
(Unaudited)
(Dollars in millions except per adjusted
patient day
and per adjusted patient admission
amounts)
Three Months Ended
Year Ended
3/31/2018
6/30/2018
9/30/2018
12/31/2018
12/31/2018
Admissions, Patient Days and
Surgeries
Number of hospitals (at end of period)
65
65
65
65
65
Total admissions
173,684
163,903
164,075
166,458
668,120
Adjusted patient admissions
304,145
297,460
298,221
300,562
1,200,388
Paying admissions (excludes charity and
uninsured)
164,239
153,816
153,227
156,392
627,674
Charity and uninsured admissions
9,445
10,087
10,848
10,066
40,446
Admissions through emergency
department
119,957
111,902
113,833
117,229
462,921
Paying admissions as a percentage of total
admissions
94.6
%
93.8
%
93.4
%
94.0
%
93.9
%
Charity and uninsured admissions as a
percentage of total admissions
5.4
%
6.2
%
6.6
%
6.0
%
6.1
%
Emergency department admissions as a
percentage of total admissions
69.1
%
68.3
%
69.4
%
70.4
%
69.3
%
Surgeries — inpatient
45,052
45,191
44,783
45,012
180,038
Surgeries — outpatient
59,720
62,205
60,080
61,151
243,156
Total surgeries
104,772
107,396
104,863
106,163
423,194
Patient days — total
817,000
743,442
740,870
758,359
3,059,671
Adjusted patient days
1,405,568
1,329,915
1,325,229
1,342,745
5,403,457
Average length of stay (days)
4.70
4.54
4.52
4.56
4.58
Licensed beds (at end of period)
17,246
17,246
17,234
17,237
17,237
Average licensed beds
17,246
17,246
17,234
17,235
17,240
Utilization of licensed beds
52.6
%
47.4
%
46.7
%
47.8
%
48.6
%
Outpatient Visits
Total visits
1,716,896
1,673,056
1,647,013
1,658,541
6,695,506
Paying visits (excludes charity and
uninsured)
1,607,194
1,560,950
1,536,247
1,547,018
6,251,409
Charity and uninsured visits
109,702
112,106
110,766
111,523
444,097
Emergency department visits
663,722
622,898
617,925
630,557
2,535,102
Paying visits as a percentage of total
visits
93.6
%
93.3
%
93.3
%
93.3
%
93.4
%
Charity and uninsured visits as a
percentage of total visits
6.4
%
6.7
%
6.7
%
6.7
%
6.6
%
Total emergency department admissions and
visits
783,679
734,800
731,758
747,786
2,998,023
Revenues
Net patient service revenues(2)
$
3,493
$
3,357
$
3,367
$
3,490
$
13,707
Revenues Per Adjusted Patient Admission
and Per Adjusted Patient Day Basis
Net patient service revenue(2) per
adjusted patient admission
$
11,485
$
11,286
$
11,290
$
11,612
$
11,419
Net patient service revenue(2) per
adjusted patient day
$
2,485
$
2,524
$
2,541
$
2,599
$
2,537
Net patient service revenues(2)
from:
Medicare
20.9
%
20.1
%
19.5
%
19.8
%
20.1
%
Medicaid
8.7
%
8.9
%
9.8
%
9.1
%
9.1
%
Managed care
65.3
%
66.4
%
65.2
%
66.1
%
65.8
%
Uninsured
1.3
%
0.2
%
0.9
%
0.5
%
0.7
%
Indemnity and other
3.8
%
4.4
%
4.6
%
4.5
%
4.3
%
(1)
Information for our Hospital Operations
and other segment is presented on a same-hospital basis, which
includes the results of our same 65 hospitals operated throughout
the nine months ended September 30, 2019 and 2018 and
associated outpatient facilities, but excludes the results of
hospitals Tenet divested since January 1, 2018.
(2)
Less implicit price concessions.
TENET HEALTHCARE CORPORATION
SEGMENT REPORTING
(Unaudited)
(Dollars in millions)
September 30,
December 31,
2019
2018
Assets
Hospital Operations and other
$
16,202
$
15,684
Ambulatory Care
6,100
5,711
Conifer
1,055
1,014
Total
$
23,357
$
22,409
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Capital expenditures:
Hospital Operations and other
$
135
$
115
$
423
$
343
Ambulatory Care
16
18
57
46
Conifer
5
3
12
15
Total
$
156
$
136
$
492
$
404
Net operating revenues:
Hospital Operations and other total prior
to inter-segment eliminations(1)
$
3,850
$
3,762
$
11,539
$
11,442
Ambulatory Care
522
502
1,526
1,531
Conifer
Tenet
140
146
432
440
Other customers
196
225
608
721
Total Conifer revenues
336
371
1,040
1,161
Inter-segment eliminations
(140
)
(146
)
(432
)
(440
)
Total
$
4,568
$
4,489
$
13,673
$
13,694
Equity in earnings of unconsolidated
affiliates:
Hospital Operations and other
$
1
$
2
$
12
$
6
Ambulatory Care
37
31
102
91
Total
$
38
$
33
$
114
$
97
Adjusted EBITDA:
Hospital Operations and other(2)
$
334
$
312
$
1,018
$
1,059
Ambulatory Care
207
184
591
547
Conifer
90
81
292
270
Total
$
631
$
577
$
1,901
$
1,876
Depreciation and amortization:
Hospital Operations and other
$
175
$
175
$
539
$
514
Ambulatory Care
19
17
55
51
Conifer
11
12
33
37
Total
$
205
$
204
$
627
$
602
(1)
Hospital Operations and other revenues
includes health plan revenues of less than $1 million and
approximately $1 million for the three and nine months ended
September 30, 2019, respectively, and $8 million and $14
million for the three and nine months ended September 30,
2018, respectively.
(2)
Hospital Operations and other Adjusted
EBITDA excludes health plan EBITDA of $(1) million and $(2) million
for the three and nine months ended September 30, 2019,
respectively, and $9 million for both of the three and nine months
ended September 30, 2018.
TENET HEALTHCARE CORPORATION
STATEMENTS OF OPERATIONS –
AMBULATORY CARE SEGMENT
(Unaudited)
(Dollars in millions)
Three Months Ended September
30,
2019
2018
Ambulatory Care as Reported
Under GAAP
Unconsolidated
Affiliates
Ambulatory Care as Reported
Under GAAP
Unconsolidated
Affiliates
Net operating revenues(1)
$
522
$
622
$
502
$
546
Equity in earnings of unconsolidated
affiliates(2)
37
—
31
—
Operating expenses:
Salaries, wages and benefits
157
159
157
137
Supplies
109
160
104
143
Other operating expenses, net
86
120
88
114
Depreciation and amortization
19
20
17
18
Litigation and investigation costs
68
—
—
—
Impairment and restructuring charges, and
acquisition-related costs
7
(2
)
13
—
Net losses on sales, consolidation and
deconsolidation of facilities
1
1
—
—
Operating income
112
164
154
134
Interest expense
(31
)
(6
)
(33
)
(7
)
Other
3
—
3
—
Net income from continuing operations,
before income taxes
84
158
124
127
Income tax expense
(13
)
(2
)
(14
)
(2
)
Net income
71
$
156
110
$
125
Less: Net income available to
noncontrolling interests
73
70
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(2
)
$
40
Equity in earnings of unconsolidated
affiliates
$
37
$
31
(1)
On a same-facility system-wide basis, net
revenue in Tenet’s Ambulatory Care segment increased 6.9% during
the three months ended September 30, 2019, with cases
increasing 5.1% and revenue per case increasing 1.7%.
(2)
At September 30, 2019, 111 of the 348
facilities in the Company’s 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 237 facilities and account for these investments as
consolidated subsidiaries.
TENET HEALTHCARE CORPORATION
STATEMENTS OF OPERATIONS –
AMBULATORY CARE SEGMENT
(Unaudited)
(Dollars in millions)
Nine Months Ended September
30,
2019
2018
Ambulatory Care as Reported
Under GAAP
Unconsolidated
Affiliates
Ambulatory Care as Reported
Under GAAP
Unconsolidated
Affiliates
Net operating revenues(1)
$
1,526
$
1,809
$
1,531
$
1,586
Equity in earnings of unconsolidated
affiliates(2)
102
—
91
—
Operating expenses:
Salaries, wages and benefits
467
462
484
391
Supplies
316
470
316
417
Other operating expenses, net
254
377
275
333
Depreciation and amortization
55
62
51
51
Litigation and investigation costs
68
—
—
—
Impairment and restructuring charges, and
acquisition-related costs
12
(2
)
20
—
Net gains on sales, consolidation and
deconsolidation of facilities
(2
)
(25
)
(1
)
—
Operating income
458
465
477
394
Interest expense
(94
)
(19
)
(106
)
(17
)
Other
9
6
6
1
Net income from continuing operations,
before income taxes
373
452
377
378
Income tax expense
(48
)
(6
)
(47
)
(6
)
Net income
325
$
446
330
$
372
Less: Net income available to
noncontrolling interests
219
209
Net income available to Tenet
Healthcare Corporation common shareholders
$
106
$
121
Equity in earnings of unconsolidated
affiliates
$
102
$
91
(1)
On a same-facility system-wide basis, net
revenue in Tenet’s Ambulatory Care segment increased 5.5% during
the nine months ended September 30, 2019, with cases
increasing 3.1% and revenue per case increasing 2.3%.
(2)
At September 30, 2019, 111 of the 348
facilities in the Company’s 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 237 facilities and account for these investments as
consolidated subsidiaries.
Non-GAAP Financial Measures
Adjusted EBITDA, a non-GAAP measure, is defined by the Company
as net income available (loss attributable) to Tenet Healthcare
Corporation common shareholders before (1) the cumulative effect of
changes in accounting principle, (2) net loss attributable (income
available) to noncontrolling interests, (3) income (loss) from
discontinued operations, (4) income tax benefit (expense), (5) gain
(loss) from early extinguishment of debt, (6) other non-operating
income (expense), net, (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, (11) depreciation and amortization and
(12) income (loss) from divested operations and closed businesses
(i.e., the Company’s health plan businesses). Litigation and
investigation costs do not include ordinary course of business
malpractice and other litigation and related expense.
Adjusted net income available (loss attributable) from
continuing operations to Tenet Healthcare Corporation common
shareholders, a non-GAAP measure, is defined by the Company as net
income available (loss attributable) to Tenet Healthcare
Corporation common shareholders before (1) net income (loss) from
discontinued operations, (2) impairment and restructuring charges,
and acquisition-related costs, (3) litigation and investigation
costs, (4) net gains (losses) on sales, consolidation and
deconsolidation of facilities, (5) gain (loss) from early
extinguishment of debt, (6) income (loss) from divested operations
and closed businesses, and (7) the associated impact of these items
on taxes and noncontrolling interests. Adjusted diluted earnings
(loss) per share from continuing operations, a non-GAAP term, is
defined by the Company as Adjusted net income available (loss
attributable) from continuing operations to Tenet Healthcare
Corporation common shareholders divided by the weighted average
primary or 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 include 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 net income available (loss attributable) to
Tenet Healthcare Corporation common shareholders, the most
comparable GAAP measure, to Adjusted EBITDA is set forth in Table
#1 below for each quarter in 2018 and 2019. A reconciliation of net
income available (loss attributable) to Tenet Healthcare
Corporation common shareholders, the most comparable GAAP measure,
to Adjusted net income available (loss attributable) from
continuing operations to Tenet Healthcare Corporation common
shareholders is set forth in Table #2 below for each quarter in
2018 and 2019. A reconciliation of net cash provided by operating
activities, the most comparable GAAP measure, to Free Cash Flow and
Adjusted Free Cash Flow is set forth in Table #3 below for each
quarter in 2018 and 2019.
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #1 – Reconciliation of
Net Income Available (Loss Attributable) to Tenet Healthcare
Corporation Common Shareholders to Adjusted EBITDA for 2019
(Unaudited)
(Dollars in millions)
2019
1st Qtr
2nd Qtr
3rd Qtr
YTD
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(19
)
$
17
$
(232
)
$
(234
)
Less: Net income available to
noncontrolling interests
(84
)
(95
)
(80
)
(259
)
Income from discontinued operations, net
of tax
8
2
1
11
Income (loss) from continuing
operations
57
110
(153
)
14
Income tax expense
(17
)
(30
)
(20
)
(67
)
Loss from early extinguishment of debt
(47
)
—
(180
)
(227
)
Other non-operating income (expense),
net
1
(1
)
(3
)
(3
)
Interest expense
(251
)
(247
)
(244
)
(742
)
Operating income
371
388
294
1,053
Litigation and investigation costs
(13
)
(18
)
(84
)
(115
)
Net losses on sales, consolidation and
deconsolidation of facilities
(1
)
(1
)
(1
)
(3
)
Impairment and restructuring charges, and
acquisition-related costs
(19
)
(36
)
(46
)
(101
)
Depreciation and amortization
(208
)
(214
)
(205
)
(627
)
Loss from divested and closed
businesses
(1
)
—
(1
)
(2
)
Adjusted EBITDA
$
613
$
657
$
631
$
1,901
Net operating revenues
$
4,545
$
4,560
$
4,568
$
13,673
Less: Net operating revenues from health
plans
—
1
—
1
Adjusted net operating revenues
$
4,545
$
4,559
$
4,568
$
13,672
Net income available (loss
attributable) to Tenet Healthcare Corporation common shareholders
as a % of net operating revenues
(0.4
)%
0.4
%
(5.1
)%
(1.7
)%
Adjusted EBITDA as a % of adjusted net
operating revenues (Adjusted EBITDA margin)
13.5
%
14.4
%
13.8
%
13.9
%
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #1 – Reconciliation of
Net Income Available (Loss Attributable) to Tenet Healthcare
Corporation Common Shareholders to Adjusted EBITDA for 2018
(Unaudited)
(Dollars in millions)
2018
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
99
$
26
$
(9
)
$
(5
)
$
111
Less: Net income available to
noncontrolling interests
(92
)
(82
)
(74
)
(107
)
(355
)
Income from discontinued operations, net
of tax
1
2
—
—
3
Income from continuing operations
190
106
65
102
463
Income tax expense
(70
)
(44
)
(6
)
(56
)
(176
)
Gain (loss) from early extinguishment of
debt
(1
)
(1
)
—
3
1
Other non-operating expense, net
(1
)
(1
)
—
(3
)
(5
)
Interest expense
(255
)
(254
)
(249
)
(246
)
(1,004
)
Operating income
517
406
320
404
1,647
Litigation and investigation costs
(6
)
(13
)
(9
)
(10
)
(38
)
Net gains (losses) on sales, consolidation
and deconsolidation of facilities
110
8
(7
)
16
127
Impairment and restructuring charges, and
acquisition-related costs
(47
)
(30
)
(46
)
(86
)
(209
)
Depreciation and amortization
(204
)
(194
)
(204
)
(200
)
(802
)
Income (loss) from divested and closed
businesses
(1
)
1
9
—
9
Adjusted EBITDA
$
665
$
634
$
577
$
684
$
2,560
Net operating revenues
$
4,699
$
4,506
$
4,489
$
4,619
$
18,313
Less: Net operating revenues from health
plans
6
—
8
—
14
Adjusted net operating revenues
$
4,693
$
4,506
$
4,481
$
4,619
$
18,299
Net income available (loss
attributable) to Tenet Healthcare Corporation common shareholders
as a % of net operating revenues
2.1
%
0.6
%
(0.2
)%
(0.1
)%
0.6
%
Adjusted EBITDA as a % of adjusted net
operating revenues (Adjusted EBITDA margin)
14.2
%
14.1
%
12.9
%
14.8
%
14.0
%
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #2 – Reconciliations of
Net Income Available (Loss Attributable) to
Tenet Healthcare Corporation
Common Shareholders to Adjusted Net Income Available from
Continuing Operations to Common Shareholders for 2019
(Unaudited)
(Dollars in millions except per share
amounts)
2019
1st Qtr
2nd Qtr
3rd Qtr
YTD
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(19
)
$
17
$
(232
)
$
(234
)
Net income from discontinued
operations
8
$
2
1
11
Net income (loss) from continuing
operations
(27
)
15
(233
)
(245
)
Less: Impairment and restructuring
charges, and acquisition-related costs
(19
)
(36
)
(46
)
(101
)
Litigation and investigation costs
(13
)
(18
)
(84
)
(115
)
Net losses on sales, consolidation and
deconsolidation of facilities
(1
)
(1
)
(1
)
(3
)
Loss from early extinguishment of debt
(47
)
—
(180
)
(227
)
Loss from divested and closed
businesses
(1
)
—
(1
)
(2
)
Noncontrolling interest impact
—
—
4
4
Tax impact of above items
(2
)
11
14
23
Adjusted net income available from
continuing operations to common shareholders
$
56
$
59
$
61
$
176
Diluted earnings (loss) per share from
continuing operations
$
(0.26
)
$
0.14
$
(2.25
)
$
(2.37
)
Less: Impairment and restructuring
charges, and acquisition-related costs
(0.18
)
(0.35
)
(0.44
)
(0.97
)
Litigation and investigation costs
(0.12
)
(0.17
)
(0.80
)
(1.10
)
Net losses on sales, consolidation and
deconsolidation of facilities
(0.01
)
(0.01
)
(0.01
)
(0.03
)
Loss from early extinguishment of debt
(0.45
)
—
(1.72
)
(2.17
)
Loss from divested and closed
businesses
(0.01
)
—
(0.01
)
(0.02
)
Noncontrolling interest impact
—
—
0.04
0.04
Tax impact of above items
(0.02
)
0.11
0.13
0.22
Adjusted diluted earnings per share
from continuing operations
$
0.54
$
0.56
$
0.58
$
1.68
Weighted average basic shares
outstanding (in thousands)
102,788
103,198
103,558
103,181
Weighted average dilutive shares
outstanding (in thousands)
104,541
104,629
104,582
104,584
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #2 – Reconciliations of
Net Income Available (Loss Attributable) to
Tenet Healthcare Corporation
Common Shareholders to Adjusted Net Income Available from
Continuing Operations to Common Shareholders for 2018
(Unaudited)
(Dollars in millions except per share
amounts)
2018
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
99
$
26
$
(9
)
$
(5
)
$
111
Net income from discontinued
operations
1
$
2
—
—
3
Net income (loss) from continuing
operations
98
24
(9
)
(5
)
108
Less: Impairment and restructuring
charges, and
acquisition-related costs
(47
)
(30
)
(46
)
(86
)
(209
)
Litigation and investigation costs
(6
)
(13
)
(9
)
(10
)
(38
)
Net gains (losses) on sales, consolidation
and deconsolidation of facilities
110
8
(7
)
16
127
Gain (loss) from early extinguishment of
debt
(1
)
(1
)
—
3
1
Income (loss) from divested and closed
businesses
(1
)
1
9
—
9
Tax impact of above items
(16
)
8
14
19
25
Adjusted net income available from
continuing operations to common shareholders
$
59
$
51
$
30
$
53
$
193
Diluted earnings (loss) per share from
continuing operations
$
0.95
$
0.23
$
(0.09
)
$
(0.05
)
$
1.04
Less: Impairment and restructuring
charges, and
acquisition-related costs
(0.46
)
(0.29
)
(0.44
)
(0.83
)
(2.01
)
Litigation and investigation costs
(0.06
)
(0.12
)
(0.09
)
(0.10
)
(0.37
)
Net gains (losses) on sales, consolidation
and deconsolidation of facilities
1.08
0.07
(0.07
)
0.15
1.22
Gain (loss) from early extinguishment of
debt
(0.01
)
(0.01
)
—
0.03
0.01
Income (loss) from divested and closed
businesses
(0.01
)
0.01
0.09
—
0.09
Tax impact of above items
(0.16
)
0.08
0.13
0.18
0.24
Adjusted diluted earnings per share
from continuing operations
$
0.57
$
0.49
$
0.29
$
0.51
$
1.86
Weighted average basic shares
outstanding (in thousands)
101,392
102,147
102,402
102,501
102,110
Weighted average dilutive shares
outstanding (in thousands)
102,656
104,177
104,575
104,118
103,881
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #3 – Reconciliations of
Net Cash Provided By Operating Activities to Free Cash Flow and
Adjusted Free Cash Flow from Continuing Operations
(Unaudited)
(Dollars in millions)
2019
1st Qtr
2nd Qtr
3rd Qtr
YTD
Net cash provided by operating
activities
$
10
$
284
$
419
$
713
Purchases of property and equipment
(192
)
(144
)
(156
)
(492
)
Free cash flow
$
(182
)
$
140
$
263
$
221
Net cash used in investing
activities
$
(139
)
$
(164
)
$
(123
)
$
(426
)
Net cash used in financing
activities
$
(30
)
$
(123
)
$
(231
)
$
(384
)
Net cash provided by operating
activities
$
10
$
284
$
419
$
713
Less: Payments for restructuring charges,
acquisition-related costs, and
litigation costs and settlements
(32
)
(48
)
(56
)
(136
)
Net cash used in operating activities from
discontinued operations
(2
)
(3
)
1
(4
)
Adjusted net cash provided by operating
activities from continuing operations
44
335
474
853
Purchases of property and equipment
(192
)
(144
)
(156
)
(492
)
Adjusted free cash flow – continuing
operations
$
(148
)
$
191
$
318
$
361
(Dollars in millions)
2018
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
Net cash provided by operating
activities
$
113
$
348
$
338
$
250
$
1,049
Purchases of property and equipment
(143
)
(125
)
(136
)
(213
)
(617
)
Free cash flow
$
(30
)
$
223
$
202
$
37
$
432
Net cash provided by (used in)
investing activities
$
373
$
(148
)
$
(105
)
$
(235
)
$
(115
)
Net cash used in financing
activities
$
(123
)
$
(771
)
$
(136
)
$
(104
)
$
(1,134
)
Net cash provided by operating
activities
$
113
$
348
$
338
$
250
$
1,049
Less: Payments for restructuring charges,
acquisition-
related costs, and litigation costs and
settlements
(33
)
(30
)
(50
)
(50
)
(163
)
Net cash used in operating activities from
discontinued
operations
(1
)
(2
)
(1
)
(1
)
(5
)
Adjusted net cash provided by operating
activities from continuing operations
147
380
389
301
1,217
Purchases of property and equipment
(143
)
(125
)
(136
)
(213
)
(617
)
Adjusted free cash flow – continuing
operations
$
4
$
255
$
253
$
88
$
600
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #4 – Reconciliation of
Outlook Net Income Available (Loss Attributable) to Tenet
Healthcare Corporation Common Shareholders to Outlook Adjusted
EBITDA
(Unaudited)
(Dollars in millions)
Q4 2019
2019
Low
High
Low
High
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
14
$
109
$
(220
)
$
(125
)
Less: Net income available to
noncontrolling interests
(131
)
(151
)
(390
)
(410
)
Net income (loss) from discontinued
operations, net of tax
(1
)
(1
)
10
10
Income tax expense
(83
)
(93
)
(150
)
(160
)
Interest expense
(253
)
(243
)
(995
)
(985
)
Loss from early extinguishment of
debt(1)
—
—
(227
)
(227
)
Other non-operating expense, net
(2
)
(7
)
(5
)
(10
)
Net losses on sales, consolidation and
deconsolidation of facilities(1)
—
—
(3
)
(3
)
Impairment and restructuring charges,
acquisition-related costs, and litigation costs and
settlements(2)
(59
)
(34
)
(275
)
(250
)
Depreciation and amortization
(203
)
(213
)
(830
)
(840
)
Loss from divested and closed
businesses
(3
)
2
(5
)
—
Adjusted EBITDA
$
749
$
849
$
2,650
$
2,750
Income (loss) from continuing
operations
$
15
$
110
$
(230
)
$
(135
)
Net operating revenues
$
4,678
$
4,878
$
18,350
$
18,550
Income (loss) from continuing
operations as a % of operating revenues
0.3
%
2.3
%
(1.3
)%
(0.7
)%
Adjusted EBITDA as a % of net operating
revenues (Adjusted EBITDA margin)
16.0
%
17.4
%
14.4
%
14.8
%
(1)
The Company does not generally forecast
losses from the early extinguishment of debt or net gains (losses)
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. The figures
shown represent the Company’s actual year-to-date results for these
items.
(2)
The Company has provided an estimate of
restructuring charges and related payments that it anticipates in
2019. The figures shown represent the Company’s estimate for
restructuring charges plus the actual year-to-date results for
impairment charges, acquisition-related costs, and litigation costs
and settlements. The Company does not generally forecast impairment
charges, acquisition-related costs, litigation costs and
settlements 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 – Reconciliations of
Outlook Net Income Available (Loss Attributable) to Tenet
Healthcare Corporation Common Shareholders to Outlook Adjusted Net
Income Available from Continuing Operations to Common
Shareholders
(Unaudited)
(Dollars in millions except per share
amounts)
Q4 2019
2019
Low
High
Low
High
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
14
$
109
$
(220
)
$
(125
)
Net income (loss) from discontinued
operations, net of tax
(1
)
(1
)
10
10
Net income (loss) from continuing
operations
15
110
(230
)
(135
)
Less: Impairment and restructuring
charges, acquisition-related costs, and litigation
costs and settlements
(59
)
(34
)
(275
)
(250
)
Net losses on sales, consolidation and
deconsolidation of facilities
—
—
(3
)
(3
)
Loss from early extinguishment of debt
—
—
(227
)
(227
)
Loss from divested and closed
businesses
(3
)
2
(5
)
—
Tax impact of above items
17
12
40
35
Noncontrolling interests impact of above
items
—
—
4
4
Adjusted net income available from
continuing operations to common shareholders
$
60
$
130
$
236
$
306
Diluted earnings (loss) per share from
continuing operations
$
0.14
$
1.04
$
(2.23
)
$
(1.31
)
Less: Impairment and restructuring
charges, acquisition-related costs, and litigation
costs and settlements
(0.56
)
(0.32
)
(2.62
)
(2.38
)
Net losses on sales, consolidation and
deconsolidation of facilities
—
—
(0.03
)
(0.03
)
Loss from early extinguishment of debt
—
—
(2.16
)
(2.16
)
Loss from divested and closed
businesses
(0.03
)
0.02
(0.05
)
—
Tax impact of above items
0.16
0.11
0.38
0.33
Noncontrolling interests impact of above
items
—
—
0.04
0.04
Adjusted diluted earnings per share
from continuing operations
$
0.57
$
1.23
$
2.25
$
2.91
Weighted average basic shares
outstanding (in thousands)
104,000
104,000
103,000
103,000
Weighted average dilutive shares
outstanding (in thousands)
106,000
106,000
105,000
105,000
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #6 – Reconciliation of
Outlook Net Cash Provided by Operating Activities to Outlook
Adjusted Free Cash Flow from Continuing Operations
(Dollars in millions)
2019
Low
High
Net cash provided by operating
activities
$
1,045
$
1,325
Less: Payments for restructuring charges,
acquisition-related costs and
litigation costs and settlements(1)
(200
)
(175
)
Net cash used in operating activities from
discontinued operations
(5
)
—
Adjusted net cash provided by operating
activities – continuing operations
1,250
1,500
Purchases of property and equipment –
continuing operations
(650
)
(700
)
Adjusted free cash flow – continuing
operations(2)
$
600
$
800
(1)
The Company has provided an estimate of
payments that it anticipates in 2019 related to restructuring
charges. The Company does not generally forecast payments related
to 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.
(2)
The Company’s definition of Adjusted Free
Cash Flow does not include 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
interests, which are recorded on the Statement of Cash Flows as the
purchase of noncontrolling interests.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191104005949/en/
Investor Contact Brendan Strong 469-893-6992
investorrelations@tenethealth.com Media Contact Lesley
Bogdanow 469-893-2640 mediarelations@tenethealth.com
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