- Tenet reported a net loss from
continuing operations attributable to Tenet common shareholders of
$9 million or $0.09 per diluted share in the third quarter of
2018 compared to a net loss of $366 million or $3.63 per diluted
share in the third quarter of 2017. After adjusting for certain
items, which totaled $39 million or $0.38 per share in the third
quarter of 2018, Tenet reported Adjusted diluted earnings per share
from continuing operations of $0.29 in the third quarter of 2018
compared to an Adjusted diluted loss per share of $0.17 in the
third quarter of 2017.
- Adjusted EBITDA was $577 million in the
third quarter of 2018 compared to $507 million in the third quarter
of 2017. Adjusted EBITDA in the third quarter of 2018 consisted of
$312 million in the Hospital Operations and other segment,
$184 million in the Ambulatory Care segment and $81 million in the
Conifer segment.
- Net cash provided by operating
activities was $799 million in the nine months ended September 30,
2018, an increase of $90 million when compared to $709 million in
the first nine months of 2017. Free Cash Flow was $395 million, an
increase of $178 million compared to $217 million in the first
nine months of 2017. Adjusted Free Cash Flow was $512 million,
a $204 million increase compared to $308 million in the first
nine months of 2017.
- Hospital segment same-hospital net
patient revenue grew 6.0 percent. Admissions decreased 2.1 percent,
adjusted admissions increased 0.3 percent, and revenue per adjusted
admission increased 5.7 percent.
- Ambulatory Care segment same-facility
system-wide revenue grew 6.7 percent, with cases up 5.0 percent and
revenue per case up 1.6 percent. Surgical revenue grew 6.6 percent,
with cases up 4.0 percent and revenue per surgical case up 2.5
percent.
- Conifer segment margins increased 210
basis points as a result of cost reduction actions; revenues
decreased 7.5 percent primarily due to client attrition following
divestitures by Tenet and other customers.
- The Company has revised its Outlook for
2018. Tenet now expects net income from continuing operations
available to Tenet common shareholders of $84 million to $144
million, Adjusted EBITDA of $2.525 billion to $2.575 billion,
diluted earnings per share from continuing operations of $0.81 to
$1.38 and Adjusted diluted earnings per share from continuing
operations of $1.44 to $1.83.
- Adjusted EBITDA in 2019 expected to be
in line with current sell-side consensus expectations; 3 percent to
5 percent Adjusted EBITDA growth anticipated in 2019.
Tenet Healthcare Corporation (NYSE: THC) reported a net loss
from continuing operations attributable to Tenet common
shareholders of $9 million in the third quarter of 2018 compared to
a $366 million net loss from continuing operations in the third
quarter of 2017. Adjusted EBITDA was $577 million in the third
quarter of 2018 compared to $507 million in the third quarter of
2017.
Ronald A. Rittenmeyer, Executive Chairman and CEO, said, “We had
a solid quarter of results at both USPI and Conifer. Our hospitals
did not meet our expectations and we are focusing on specific areas
to address those gaps. Strengthening enterprise operations remains
our primary focus – and we will continue moving with urgency to
implement targeted growth initiatives, achieve operational
efficiencies, make further enhancements to our facility portfolio
and instill culture changes to drive accountability.”
Hospital Operations and Other Segment
Net operating revenues in the Hospital Operations and other
segment were $3.762 billion, down 2.7 percent from the third
quarter of 2017, primarily due to hospital divestitures, partially
offset by same-hospital revenue growth.
On a same-hospital basis, net patient revenues after implicit
price concessions were $3.432 billion, up 6.0 percent from the
third quarter of 2017. Adjusted admissions grew 0.3 percent in the
third quarter of 2018 and would have been up approximately 1.3
percent on a same-hospital basis excluding service line closures
and declines in Detroit. The Company’s decision to discontinue
certain services at selected hospitals lowered same-hospital
adjusted admissions by approximately 30 basis points in the third
quarter of 2018. In addition, volume declines in Detroit lowered
same-hospital adjusted admissions by approximately 70 basis points.
Revenue per adjusted admission increased 5.7 percent on a
same-hospital basis. Same-hospital revenue included $71 million
from the California Provider Fee Program in the third quarter of
2018 compared to no revenue in the third quarter of 2017 since the
2017 program was not approved until December 2017; excluding timing
differences related to the California Provider Fee, same-hospital
revenue per adjusted admission increased 3.6 percent.
Adjusted EBITDA in Tenet’s hospital segment was $312 million, an
increase of $43 million or 16.0 percent as compared to $269
million in the third quarter of 2017. Key items impacting the
year-over-year comparison in Adjusted EBITDA include: (i) a $71
million increase in California Provider Fee revenue, (ii) a $13
million decline in EBITDA due to facilities that have been
divested; (iii) a $16 million gain in the third quarter of 2018
from the sale of a minority interest investment which was recorded
as a reduction in other operating expenses, (iv) a $4 million
impact from hurricanes in the third quarter of 2018 compared to a
$20 million impact in the third quarter of 2017, (v) an
unanticipated $21 million loss on risk-based contracts in
California in the third quarter of 2018 compared to $2 million of
EBITDA in the third quarter of 2017, (vi) $11 million of negative
EBITDA in the third quarter of 2018 from three hospitals that are
being divested compared to $2 million of negative EBITDA in the
third quarter of 2017, and (vii) a $1 million decline in electronic
health record incentives. After normalizing for these items,
Adjusted EBITDA in the hospital segment declined by $10 million, or
2.9 percent.
Tenet’s health plan business recognized $8 million of revenue
and $9 million of Adjusted EBITDA in the third quarter of 2018
versus $10 million of revenue and negative $6 million of
Adjusted EBITDA in the third quarter of 2017. The revenue and
expenses associated with the Company’s health plan operations are
included in Tenet’s consolidated statements of operations; however,
the results are excluded from Adjusted EBITDA in both periods.
Selected operating expenses in the hospital segment, defined as
the sum of salaries, wages and benefits, supplies and other
operating expenses, increased 3.9 percent on a per adjusted
admission basis in the third quarter of 2018. Salaries, wages and
benefits and supply expense were well managed, increasing 0.9
percent and 4.6 percent per adjusted admission, respectively. Other
operating expenses increased 9.5 percent per adjusted admission
primarily due to the aforementioned losses on risk-based contracts
in California and an increase in malpractice expense, partially
offset by the aforementioned $16 million gain on the sale of an
asset.
Exchanges
Tenet’s same-hospital exchange outpatient visits increased 8.1
percent to 51,539 in the third quarter of 2018. Same-hospital
exchange admissions were 4,577 in the third quarter of 2018, down
4.0 percent from the third quarter of 2017.
Ambulatory Care Segment
During the third quarter of 2018, the Ambulatory segment
produced net operating revenues of $502 million, representing an
increase of 7.3 percent as compared to $468 million in the third
quarter of 2017. In addition, the Ambulatory segment generated
Adjusted EBITDA of $184 million, up 15.7 percent from $159 million
in the third quarter of 2017 and Adjusted EBITDA less
facility-level noncontrolling interest expense was $116 million, up
11.5 percent from $104 million in the third quarter of 2017.
The results of many of the facilities in which the Ambulatory
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. On a same-facility
system-wide basis, revenue in the Ambulatory segment increased 6.7
percent, with cases increasing 5.0 percent and revenue per case
increasing 1.6 percent. In the surgical business, which represents
the majority of the revenue in the Ambulatory segment,
same-facility system-wide revenue grew 6.6 percent, with cases up
4.0 percent and revenue per case up 2.5 percent. In the
non-surgical business, same-facility system-wide revenue grew 9.4
percent, with visits up 6.6 percent and revenue per visit up 2.5
percent.
Conifer Segment
During the third quarter of 2018, primarily due to client
attrition following divestitures by Tenet and other customers,
Conifer’s revenue decreased 7.5 percent to $371 million, down from
$401 million in the third quarter of 2017. Revenue from third party
customers declined 10.7 percent to $225 million.
Conifer generated $81 million of Adjusted EBITDA in the third
quarter of 2018, up 2.5 percent from $79 million in the third
quarter of 2017. Adjusted EBITDA margins increased 210 basis points
to 21.8 percent in the third quarter of 2018, up from 19.7 percent
in the third quarter of 2017.
Net Income and Earnings Per Share
Tenet reported a net loss from continuing operations
attributable to Tenet common shareholders of $9 million, or
$0.09 per diluted share, in the third quarter of 2018 compared to a
net loss of $366 million, or $3.63 per diluted share, in the third
quarter of 2017.
As shown on Table #2 at the end of this release, the net loss
from continuing operations attributable to Tenet common
shareholders of $9 million included: (i) $46 million of pre-tax
impairment and restructuring charges and acquisition-related costs
including $21 million of employee severance, $5 million of contract
and lease termination fees, and $20 million of other items; (ii) $9
million of pre-tax litigation and investigation costs; (iii) $7
million of pre-tax net losses on sales, consolidation and
deconsolidation of facilities, and, (iv) $9 million of income from
divested and closed businesses. These items collectively lowered
pre-tax income by $53 million, after-tax income by $39 million and
diluted earnings per share by $0.38.
After adjusting for the items listed above and on Table #2,
Tenet produced Adjusted net income from continuing operations
available to Tenet common shareholders of $30 million, or $0.29 per
diluted share, during the third quarter of 2018, as compared to an
Adjusted net loss from continuing operations attributable to Tenet
common shareholders of $17 million, or $0.17 per diluted share, in
the third quarter of 2017.
A reconciliation of GAAP net income available (loss
attributable) to Tenet common shareholders to Adjusted net income
available (loss attributable) from continuing operations and
Adjusted diluted earnings (loss) 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 $500 million at September 30,
2018 compared to $403 million at June 30, 2018. The Company had no
outstanding borrowings on its $1 billion credit line as of
September 30, 2018. Accounts receivable days outstanding from
continuing operations were 56.3 at September 30, 2018 compared to
55.1 at June 30, 2018 and 55.8 at December 31, 2017.
Net cash provided by operating activities was $799 in the nine
months ended September 30, 2018, representing a $90 million
increase compared to $709 million in the first nine months of 2017.
After subtracting $404 million and $492 million of capital
expenditures in the first nine months of 2018 and 2017,
respectively, Free Cash Flow was $395 million in the first nine
months of 2018, an increase of $178 million compared to $217
million in the first nine months of 2017. Adjusted Free Cash Flow
was $512 million in the first nine months of 2018, representing a
$204 million increase from $308 million in the first nine months of
2017.
Net cash provided by investing activities was $120 million in
the first nine months of 2018 compared to $227 million in the first
nine months of 2017. The 2018 period included $663 million of
proceeds from the sales of facilities, long-term investments and
other assets, primarily from the sale of the Company’s two
hospitals in the Philadelphia area, MacNeal Hospital, Des Peres
Hospital, the Company’s minority interests in four Dallas-area
hospitals and the sale of Aspen in the United Kingdom. The 2018
period also included $140 million of purchases of businesses, joint
ventures and equity investments, primarily related to USPI’s
acquisition program.
Net cash used in financing activities was $1.030 billion in the
first nine months of 2018 compared to $1.223 billion of net cash
used in financing activities in the first nine months of 2017. The
2018 period included $643 million in purchases of noncontrolling
interests, including approximately $630 million in the second
quarter of 2018 to increase Tenet’s ownership in USPI to 95
percent, and $114 million of cash to retire $118 million of debt
through open market purchases.
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 revised Outlook for 2018 includes a $37 million
reduction, at the midpoint, in net income from continuing
operations available to Tenet common shareholders and a $50 million
reduction, at the midpoint, to Adjusted EBITDA. The Adjusted EBITDA
revision reflects the following:
- Hospital Operations and other
segment: Reducing the midpoint of the Adjusted EBITDA Outlook
by $60 million to a new range of $1.385 billion to $1.415 billion
to include: (i) approximately $25 million of losses on risk-based
capitated contracts in California, primarily due to adverse claims
experience trends; (ii) lower volume and payer mix expectations;
and (iii) increased malpractice expense to settle various cases;
the date of loss on many of these cases occurred more than five
years ago.
- Ambulatory Care segment:
Increasing the midpoint of the Adjusted EBITDA Outlook by $10
million to a new range of $790 million to $800 million.
- Conifer segment: Maintaining the
Adjusted EBITDA Outlook range of $350 million to $360 million.
Other components of the Company’s Outlook for 2018 include:
- Revenue of $18.1 billion to $18.3
billion,
- Net income from continuing operations
available to Tenet common shareholders of $84 million to $144
million,
- Adjusted EBITDA of $2.525 billion to
$2.575 billion,
- Net cash provided by operating
activities of $1.060 billion to $1.335 billion,
- Adjusted Free Cash Flow of $600 million
to $800 million,
- Diluted earnings per share from
continuing operations of $0.81 to $1.38, and
- Adjusted diluted earnings per share
from continuing operations of $1.44 to $1.83.
The Outlook for 2018 assumes equity in earnings of
unconsolidated affiliates of $150 million to $160 million, net
income available to noncontrolling interests of $365 million to
$385 million and an average diluted share count of 104 million.
The Company’s Outlook for the fourth quarter of 2018
includes:
- Revenue of $4.420 billion to $4.620
billion,
- Net income available (loss
attributable) from continuing operations to Tenet common
shareholders ranging from a loss of $29 million to income of $31
million,
- Adjusted EBITDA of $649 million to $699
million,
- Diluted earnings (loss) per share from
continuing operations ranging from a loss of $0.28 to earnings of
$0.30, and
- Adjusted diluted earnings per share
from continuing operations ranging from $0.10 to $0.48.
The Outlook for the fourth quarter assumes equity in earnings of
unconsolidated affiliates of $53 million to $63 million, net income
available to noncontrolling interests of $117 million to $137
million, and an average diluted share count of 105 million.
Additional details on Tenet’s Outlook for both the fourth
quarter and calendar year 2018 are available in Tables #4, #5 and
#6 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 Third Quarter
Results
Tenet management will discuss the Company’s third quarter 2018
results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00
a.m. Central Time) on November 6, 2018. 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, 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 period
ended September 30, 2018, 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 (loss) 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.
Tenet Healthcare Corporation is a diversified healthcare
services company with 115,000 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 general acute
care and specialty hospitals, ambulatory surgery centers, urgent
care centers and other outpatient facilities. 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,” “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, 2017, and subsequent Form 10-Q filings and other
filings with the Securities and Exchange Commission.
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 September 30, 2018 % 2017
% Change Net operating revenues: Net operating
revenues before provision for doubtful accounts $ 4,941 Less:
Provision for doubtful accounts 355
Net operating
revenues $ 4,489 100.0 %
4,586 100.0 % (2.1 )%
Equity in earnings of
unconsolidated affiliates 33 0.7 %
38 0.8 % (13.2 )%
Operating expenses:
Salaries, wages and benefits 2,116 47.1 % 2,264 49.4 % (6.5 )%
Supplies 726 16.2 % 740 16.1 % (1.9 )% Other operating expenses,
net 1,094 24.4 % 1,120 24.4 % (2.3 )% Electronic health record
incentives — — % (1 ) — % (100.0 )% Depreciation and amortization
204 4.5 % 219 4.8 % Impairment and restructuring charges, and
acquisition-related costs 46 1.0 % 329 7.2 % Litigation and
investigation costs 9 0.2 % 6 0.1 % Net losses (gains) on sales,
consolidation and deconsolidation of facilities 7 0.2 % (104
) (2.3 )%
Operating income 320 7.1 %
51 1.1 % Interest expense (249 ) (257 ) Other
non-operating expense, net — (4 ) Loss from early extinguishment of
debt — (138 )
Income (loss) from continuing operations,
before income taxes 71 (348 ) Income tax
benefit (expense) (6 ) 60
Income (loss) from continuing
operations, before discontinued
operations
65 (288 ) Discontinued operations:
Income (loss) from operations — (1 ) Income tax benefit (expense) —
—
Income (loss) from discontinued operations
— (1 ) Net income (loss)
65 (289 ) Less: Net income available to
noncontrolling interests 74 78
Net loss
attributable to Tenet Healthcare Corporation common
shareholders $ (9 ) $ (367
) Amounts attributable to Tenet Healthcare Corporation
common shareholders Loss from continuing operations, net of tax
$ (9 ) $ (366 ) Loss from discontinued operations, net of tax —
(1 )
Net loss attributable to Tenet Healthcare
Corporation common shareholders $ (9 )
$ (367 ) Earnings (loss) per share
available (attributable) to Tenet Healthcare Corporation common
shareholders: Basic Continuing operations $ (0.09 ) $
(3.63 ) Discontinued operations — (0.01 )
$
(0.09 ) $ (3.64 ) Diluted
Continuing operations $ (0.09 ) $ (3.63 ) Discontinued operations —
(0.01 )
$ (0.09 ) $ (3.64
) Weighted average shares and dilutive securities
outstanding (in thousands): Basic 102,402 100,812 Diluted*
102,402 100,812 * Had we generated income from continuing
operations available to common shareholders in the three months
ended September 30, 2018 and 2017 the effect of employee stock
options, restricted stock units and deferred compensation units on
the diluted shares calculation would have been an increase of 2,173
thousand and 711 thousand shares, respectively.
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions except per share amounts)
Nine
Months Ended September 30, 2018 % 2017
% Change Net operating revenues: Net operating
revenues before provision for doubtful accounts $ 15,310 Less:
Provision for doubtful accounts 1,109
Net operating
revenues $ 13,694 100.0 %
14,201 100.0 % (3.6 )%
Equity in earnings
of unconsolidated affiliates 97 0.7 %
95 0.7 % 2.1 %
Operating expenses:
Salaries, wages and benefits 6,478 47.3 % 6,990 49.3 % (7.3 )%
Supplies 2,248 16.4 % 2,285 16.1 % (1.6 )% Other operating
expenses, net 3,181 23.2 % 3,466 24.4 % (8.2 )% Electronic health
record incentives (1 ) — % (8 ) (0.1 )% (87.5 )% Depreciation and
amortization 602 4.4 % 662 4.7 % Impairment and restructuring
charges, and acquisition-related costs 123 0.9 % 403 2.8 %
Litigation and investigation costs 28 0.2 % 12 0.1 % Net gains on
sales, consolidation and deconsolidation of facilities (111 ) (0.8
)% (142 ) (1.0 )%
Operating income 1,243 9.1
% 628 4.4 % Interest expense (758 )
(775 ) Other non-operating expense, net (2 ) (14 ) Loss from early
extinguishment of debt (2 ) (164 )
Income (loss) from continuing
operations, before income taxes 481 (325 )
Income tax benefit (expense) (120 ) 105
Income (loss)
from continuing operations, before discontinued
operations
361 (220 ) Discontinued operations:
Income (loss) from operations 3 (1 ) Income tax benefit (expense) —
—
Income (loss) from discontinued operations
3 (1 ) Net income (loss)
364 (221 ) Less: Net income available to
noncontrolling interests 248 254
Net income
available (loss attributable) to Tenet Healthcare Corporation
common shareholders $ 116 $
(475 ) Amounts available (attributable) to Tenet
Healthcare Corporation common shareholders Income (loss) from
continuing operations, net of tax $ 113 $ (474 ) Income (loss) from
discontinued operations, net of tax 3
(1 )
Net income available (loss attributable) to Tenet Healthcare
Corporation common shareholders $ 116
$ (475 ) Earnings (loss) per share
available (attributable) to Tenet Healthcare Corporation common
shareholders: Basic Continuing operations $ 1.11 $ (4.72
) Discontinued operations 0.03 (0.01 )
$ 1.14
$ (4.73 ) Diluted Continuing
operations $ 1.09 $ (4.72 ) Discontinued operations 0.03
(0.01 )
$ 1.12 $ (4.73 )
Weighted average shares and dilutive securities outstanding (in
thousands): Basic 101,980 100,475 Diluted* 103,802 100,475
* Had we generated income from continuing operations
available to common shareholders in the nine months ended September
30, 2017 the effect of employee stock options, restricted stock
units and deferred compensation units on the diluted shares
calculation would have been an increase of 747 thousand shares.
TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31, (Dollars in
millions)
2018 2017 ASSETS Current
assets: Cash and cash equivalents $ 500 $ 611 Accounts
receivable, less allowance for doubtful accounts 2,484 2,616
Inventories of supplies, at cost 307 289 Income tax receivable 27 5
Assets held for sale 128 1,017 Other current assets 1,046
1,035
Total current assets 4,492 5,573
Investments and other assets 1,462 1,543 Deferred income taxes 348
455 Property and equipment, at cost, less accumulated depreciation
and amortization 6,888 7,030 Goodwill 7,313 7,018 Other intangible
assets, at cost, less accumulated amortization 1,762 1,766
Total assets $ 22,265 $
23,385 LIABILITIES AND EQUITY
Current liabilities: Current portion of long-term debt $ 672
$ 146 Accounts payable 1,065 1,175 Accrued compensation and
benefits 814 848 Professional and general liability reserves 230
200 Accrued interest payable 330 256 Liabilities held for sale 71
480 Other current liabilities 1,042 1,227
Total
current liabilities 4,224 4,332 Long-term debt,
net of current portion 14,178 14,791 Professional and general
liability reserves 627 654 Defined benefit plan obligations 476 536
Deferred income taxes 36 36 Other long-term liabilities 622
631
Total liabilities 20,163 20,980
Commitments and contingencies Redeemable noncontrolling interests
in equity of consolidated subsidiaries 1,444 1,866
Equity:
Shareholders’ equity: Common stock 7 7 Additional paid-in
capital 4,733 4,859 Accumulated other comprehensive loss (202 )
(204 ) Accumulated deficit (2,231 ) (2,390 ) Common stock in
treasury, at cost (2,415 ) (2,419 )
Total shareholders’
deficit (108 ) (147 )
Noncontrolling interests 766 686
Total equity 658 539 Total
liabilities and equity $ 22,265 $
23,385
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Nine Months Ended (Dollars in millions)
September
30, 2018 2017 Net income (loss) $
364 $ (221 ) Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: Depreciation and amortization 602 662 Provision for
doubtful accounts — 1,109 Deferred income tax expense (benefit) 110
(145 ) Stock-based compensation expense 34 44 Impairment and
restructuring charges, and acquisition-related costs 123 403
Litigation and investigation costs 28 12 Net gains on sales,
consolidation and deconsolidation of facilities (111 ) (142 ) Loss
from early extinguishment of debt 2 164 Equity in earnings of
unconsolidated affiliates, net of distributions received 9 (4 )
Amortization of debt discount and debt issuance costs 33 33 Pre-tax
loss (income) from discontinued operations (3 ) 1 Other items, net
(22 ) (19 )
Changes in cash from operating assets and
liabilities: Accounts receivable (36 ) (1,046 ) Inventories and
other current assets 73 97 Income taxes (14 ) (14 ) Accounts
payable, accrued expenses and other current liabilities (194 ) (141
) Other long-term liabilities (82 ) 7
Payments for restructuring
charges, acquisition-related costs, and litigation costs and
settlements (113 ) (88 ) Net
cash used in operating activities from discontinued operations,
excluding income taxes (4 ) (3 )
Net cash provided by operating activities 799
709 Cash flows from investing activities: Purchases
of property and equipment — continuing operations (404 ) (492 )
Purchases of businesses or joint venture interests, net of cash
acquired (97 ) (41 ) Proceeds from sales of facilities and other
assets 498 826 Proceeds from sales of marketable securities,
long-term investments and other assets 165 20 Purchases of equity
investments (43 ) (64 ) Other long-term assets 5 (16 ) Other items,
net (4 ) (6 )
Net cash provided by investing activities
120 227 Cash flows from financing activities:
Repayments of borrowings under credit facility (505 ) (850 )
Proceeds from borrowings under credit facility 505 850 Repayments
of other borrowings (238 ) (4,099 ) Proceeds from other borrowings
15 3,788 Debt issuance costs — (62 ) Distributions paid to
noncontrolling interests (217 ) (178 ) Proceeds from sale of
noncontrolling interests 14 29 Purchases of noncontrolling
interests (643 ) (722 ) Proceeds from exercise of stock options and
employee stock purchase plan 15 5 Other items, net 24 16
Net cash used in financing activities (1,030
) (1,223 ) Net decrease in cash and cash
equivalents (111 ) (287 ) Cash and cash equivalents at beginning of
period 611 716
Cash and cash equivalents at end of
period $ 500 $ 429
Supplemental disclosures: Interest paid, net of capitalized
interest $ (652 ) $ (617 ) Income tax refunds (payments), net $ (24
) $ (54 )
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)
2018 2017 Change 2018 2017
Change Admissions, Patient Days and Surgeries
Number of hospitals (at end of period) 68 73 (5 ) * 68 73 (5 ) *
Total admissions 168,201 185,389 (9.3 )% 518,960 572,690 (9.4 )%
Adjusted patient admissions 306,197 332,035 (7.8 )% 933,128
1,021,624 (8.7 )% Paying admissions (excludes charity and
uninsured) 157,193 174,803 (10.1 )% 487,899 541,340 (9.9 )% Charity
and uninsured admissions 11,008 10,586 4.0 % 31,061 31,350 (0.9 )%
Admissions through emergency department 116,727 120,493 (3.1 )%
356,839 368,773 (3.2 )% Paying admissions as a percentage of total
admissions 93.5 % 94.3 % (0.8 )% * 94.0 % 94.5 % (0.5 )% * Charity
and uninsured admissions as a percentage of total admissions 6.5 %
5.7 % 0.8 % * 6.0 % 5.5 % 0.5 % * Emergency department admissions
as a percentage of total admissions 69.4 % 65.0 % 4.4 % * 68.8 %
64.4 % 4.4 % * Surgeries — inpatient 45,626 50,939 (10.4 )% 139,123
154,822 (10.1 )% Surgeries — outpatient 61,468 67,321 (8.7 )%
188,281 208,291 (9.6 )% Total surgeries 107,094 118,260 (9.4 )%
327,404 363,113 (9.8 )% Patient days — total 761,920 853,059 (10.7
)% 2,387,087 2,651,328 (10.0 )% Adjusted patient days 1,365,662
1,502,831 (9.1 )% 4,225,281 4,658,831 (9.3 )% Average length of
stay (days) 4.53 4.60 (1.5 )% 4.60 4.63 (0.6 )% Licensed beds (at
end of period) 18,302 19,433 (5.8 )% 18,302 19,433 (5.8 )% Average
licensed beds 18,302 19,783 (7.5 )% 18,450 20,218 (8.7 )%
Utilization of licensed beds 45.3 % 46.9 % (1.6 )% * 47.4 % 48.1 %
(0.7 )% *
Outpatient Visits Total visits 1,722,292 1,867,471
(7.8 )% 5,314,678 5,889,261 (9.8 )% Paying visits (excludes charity
and uninsured) 1,607,184 1,741,815 (7.7 )% 4,966,532 5,499,724 (9.7
)% Charity and uninsured visits 115,108 125,656 (8.4 )% 348,146
389,537 (10.6 )% Emergency department visits 638,248 685,096 (6.8
)% 1,978,285 2,142,932 (7.7 )% 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
754,975 805,589 (6.3 )% 2,335,124 2,511,705 (7.0 )%
Revenues
Net patient revenues(3) $ 3,434 $ 3,522 (2.5 )% $ 10,520 $ 10,969
(4.1 )%
Revenues on a Per Adjusted Patient Admission and Per
Adjusted Patient Day
Net patient revenue(3) per adjusted
patient admission
$ 11,215 $ 10,607 5.7 % $ 11,274 $ 10,737 5.0 % Net patient
revenue(3) per adjusted patient day $ 2,515 $ 2,344 7.3 % $ 2,490 $
2,354 5.8 %
Total selected operating expenses (salaries,
wages and benefits, supplies and other operating expenses) per
adjusted patient admission(2) $ 10,771 $ 10,367 3.9 % $ 10,648 $
10,348 2.9 %
Net Patient Revenues(3)
from: Medicare
19.8 % 22.0 % (2.2 )% * 20.6 % 22.4 % (1.8 )% * Medicaid 9.8 % 7.1
% 2.7 % * 9.2 % 7.4 % 1.8 % * Managed care 64.9 % 66.1 % (1.2 )% *
65.3 % 65.7 % (0.4 )% * Self-pay 0.9 % 0.3 % 0.6 % * 0.7 % 0.4 %
0.3 % * Indemnity and other 4.6 % 4.5 % 0.1 % * 4.2 % 4.1 % 0.1 % *
(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 and provision for doubtful accounts. * This change is
the difference between the 2018 and 2017 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)
2018 2017 Change 2018 2017
Change Admissions, Patient Days and Surgeries
Number of hospitals (at end of period) 68 68 — 68 68 — * Total
admissions 168,202 171,766 (2.1 )% 514,526 521,438 (1.3 )% Adjusted
patient admissions 306,199 305,300 0.3 % 924,037 921,715 0.3 %
Paying admissions (excludes charity and uninsured) 157,197 161,743
(2.8 )% 483,655 492,896 (1.9 )% Charity and uninsured admissions
11,005 10,023 9.8 % 30,871 28,542 8.2 % Admissions through
emergency department 116,727 112,210 4.0 % 354,594 337,463 5.1 %
Paying admissions as a percentage of total admissions 93.5 % 94.2 %
(0.7 )% 94.0 % 94.5 % (0.5 )% * Charity and uninsured admissions as
a percentage of total admissions 6.5 % 5.8 % 0.7 % 6.0 % 5.5 % 0.5
% * Emergency department admissions as a percentage of total
admissions 69.4 % 65.3 % 4.1 % 68.9 % 64.7 % 4.2 % * Surgeries —
inpatient 45,626 47,315 (3.6 )% 137,623 141,503 (2.7 )% Surgeries —
outpatient 61,468 61,562 (0.2 )% 186,132 187,316 (0.6 )% Total
surgeries 107,094 108,877 (1.6 )% 323,755 328,819 (1.5 )% Patient
days — total 761,921 789,040 (3.4 )% 2,368,366 2,414,961 (1.9 )%
Adjusted patient days 1,365,664 1,379,096 (1.0 )% 4,186,068
4,203,108 (0.4 )% Average length of stay (days) 4.53 4.59 (1.3 )%
4.60 4.63 (0.6 )% Licensed beds (at end of period) 17,934 18,006
(0.4 )% 17,934 18,006 (0.4 )% Average licensed beds 17,934 18,007
(0.4 )% 17,942 17,983 (0.2 )% Utilization of licensed beds 46.2 %
47.6 % (1.4 )% 48.4 % 49.2 % (0.8 )% *
Outpatient Visits
Total visits 1,722,292 1,715,650 0.4 % 5,264,505 5,293,076 (0.5 )%
Paying visits (excludes charity and uninsured) 1,607,180 1,600,195
0.4 % 4,919,392 4,951,644 (0.7 )% Charity and uninsured visits
115,112 115,455 (0.3 )% 345,113 341,432 1.1 % Emergency department
visits 638,248 627,415 1.7 % 1,963,474 1,923,995 2.1 % Paying
visits as a percentage of total visits 93.3 % 93.3 % — % 93.4 %
93.5 % (0.1 )% * Charity and uninsured visits as a percentage of
total visits 6.7 % 6.7 % — % 6.6 % 6.5 % 0.1 % * Total emergency
department admissions and visits 754,975 739,625 2.1 % 2,318,068
2,261,458 2.5 %
Revenues Net patient revenues(2) $ 3,432 $
3,237 6.0 % $ 10,434 $ 9,905 5.3 %
Revenues on a Per Adjusted
Patient Admission and Per Adjusted Patient Day
Net patient revenue(2) per adjusted
patient admission
$ 11,208 $ 10,603 5.7 % $ 11,292 $ 10,746 5.1 % Net patient
revenue(2) per adjusted patient day $ 2,513 $ 2,347 7.1 % $ 2,493 $
2,357 5.8 %
Net Patient Revenues(2)
from: Medicare
19.8 % 21.9 % (2.1 )% 20.5 % 22.6 % (2.1 )% * Medicaid 9.8 % 6.8 %
3.0 % 9.2 % 7.0 % 2.2 % * Managed care 64.9 % 66.1 % (1.2 )% 65.3 %
65.6 % (0.3 )% * Self-pay 0.9 % 0.3 % 0.6 % 0.8 % 0.4 % 0.4 % *
Indemnity and other 4.6 % 4.9 % (0.3 )% 4.2 % 4.4 % (0.2 )% *
(1) Information for our Hospital Operations and other
segment is presented on a same-hospital basis, which includes the
results of our same 68 hospitals operated throughout the nine
months ended September 30, 2018 and 2017 and associated outpatient
facilities, but excludes the results of hospitals Tenet divested
since January 1, 2017. (2) Less implicit price concessions and
provision for doubtful accounts. * This change is the difference
between the 2018 and 2017 amounts shown.
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions except per share amounts)
Three
Months Ended Nine Months Ended 3/31/2018
6/30/2018 9/30/2018 9/30/2018 Net operating
revenues $ 4,699 $ 4,506 $
4,489 $ 13,694 Equity in earnings of
unconsolidated affiliates 25 39 33
97 Operating expenses: Salaries, wages and benefits
2,227 2,135 2,116 6,478 Supplies 774 748 726 2,248 Other operating
expenses, net 1,060 1,027 1,094 3,181 Electronic health record
incentives (1 ) — — (1 ) Depreciation and amortization 204 194 204
602 Impairment and restructuring charges, and acquisition-related
costs 47 30 46 123 Litigation and investigation costs 6 13 9 28
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
(110 ) (8 ) 7 (111 )
Operating income 517
406 320 1,243 Interest expense (255 ) (254 )
(249 ) (758 ) Other non-operating expense, net (1 ) (1 ) — (2 )
Loss from early extinguishment of debt (1 ) (1 ) — (2 )
Income from continuing operations, before income taxes
260 150 71 481 Income tax expense (70 )
(44 ) (6 ) (120 )
Income from continuing operations,
before discontinued operations
190 106 65 361 Discontinued
operations: Income from operations 1 2 — 3 Income tax benefit
(expense) — — — —
Income from
discontinued operations 1 2 —
3 Net income 191 108
65 364 Less: Net income available to noncontrolling
interests 92 82 74 248
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$ 99 $ 26 $
(9 ) $ 116
Amounts available (attributable) to
Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax $ 98 $ 24 $ (9
) $ 113 Income from discontinued operations, net of tax 1 2
— 3
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$ 99 $ 26 $
(9 ) $ 116 Earnings (loss)
per share available (attributable) to Tenet Healthcare Corporation
common shareholders: Basic Continuing operations $ 0.97
$ 0.23 $ (0.09 ) $ 1.11 Discontinued operations 0.01 0.02
— 0.03
$ 0.98 $
0.25 $ (0.09 ) $
1.14 Diluted Continuing operations $ 0.95 $
0.23 $ (0.09 ) 1.09 Discontinued operations 0.01 0.02
— $ 0.03
$ 0.96 $
0.25 $ (0.09 ) $
1.12
Weighted average shares and dilutive
securities outstanding (in thousands):
Basic 101,392 102,147 102,402 101,980 Diluted 102,656 104,177
102,402 103,802
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions except per share amounts)
Three
Months Ended Year Ended 3/31/2017
6/30/2017 9/30/2017 12/31/2017
12/31/2017 Net operating revenues: Net operating
revenues before provision for doubtful accounts $ 5,196 $ 5,173 $
4,941 $ 5,303 $ 20,613 Less: Provision for doubtful accounts 383
371 355 325 1,434
Net
operating revenues 4,813 4,802 4,586
4,978 19,179 Equity in earnings of unconsolidated
affiliates 29 28 38 49 144
Operating expenses: Salaries, wages and benefits 2,380 2,346
2,264 2,284 9,274 Supplies 765 780 740 800 3,085 Other operating
expenses, net 1,187 1,159 1,120 1,104 4,570 Electronic health
record incentives (1 ) (6 ) (1 ) (1 ) (9 ) Depreciation and
amortization 221 222 219 208 870 Impairment and restructuring
charges, and acquisition-related costs 33 41 329 138 541 Litigation
and investigation costs 5 1 6 11 23 Net gains on sales,
consolidation and deconsolidation of facilities (15 ) (23 ) (104 )
(2 ) (144 )
Operating income 267 310
51 485 1,113 Interest expense (258 ) (260 )
(257 ) (253 ) (1,028 ) Other non-operating expense, net (5 ) (5 )
(4 ) (8 ) (22 ) Loss from early extinguishment of debt — (26
) (138 ) — (164 )
Income (loss) from continuing
operations, before income taxes
4 19 (348 ) 224 (101
) Income tax benefit (expense) 33 12 60
(324 ) (219 )
Income (loss) from continuing
operations, before discontinued operations
37 31 (288 ) (100 )
(320 ) Discontinued operations: Income (loss)
from operations (2 ) 2 (1 ) 1 — Income tax benefit (expense) 1
(1 ) — — —
Income (loss) from
discontinued operations (1 ) 1
(1 ) 1 — Net
income (loss) 36 32 (289 )
(99 ) (320 ) Less: Net income available
to noncontrolling interests 89 87 78
130 384
Net loss attributable to Tenet
Healthcare Corporation common shareholders
$ (53 ) $ (55 ) $
(367 ) $ (229 ) $
(704 )
Amounts available (attributable) to
Tenet Healthcare Corporation common shareholders
Loss from continuing operations, net of tax $ (52 ) $ (56 ) $ (366
) $ (230 ) $ (704 ) Income (loss) from discontinued operations, net
of tax (1 ) 1 (1 ) 1 —
Net loss attributable to Tenet
Healthcare Corporation common shareholders
$ (53 ) $ (55 ) $
(367 ) $ (229 ) $
(704 )
Earnings (loss) per share available
(attributable) to Tenet Healthcare Corporation common
shareholders:
Basic Continuing operations $ (0.52 ) $ (0.56 ) $ (3.63 ) $
(2.28 ) $ (7.00 ) Discontinued operations (0.01 ) 0.01 (0.01
) 0.01 —
$ (0.53 )
$ (0.55 ) $ (3.64 )
$ (2.27 ) $ (7.00
) Diluted Continuing operations $ (0.52 ) $ (0.56 ) $
(3.63 ) $ (2.28 ) $ (7.00 ) Discontinued operations (0.01 ) 0.01
(0.01 ) 0.01 —
$ (0.53
) $ (0.55 ) $ (3.64
) $ (2.27 ) $
(7.00 )
Weighted average shares and dilutive
securities outstanding (in thousands):
Basic 100,000 100,612 100,812 100,945 100,592 Diluted 100,000
100,612 100,812 100,945 100,592
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 MonthsEnded
3/31/2018 6/30/2018 9/30/2018
09/30/2018 Admissions, Patient Days and
Surgeries Number of hospitals (at end of period) 69 68 68 68
Total admissions 182,306 168,453 168,201 518,960 Adjusted patient
admissions 320,868 306,063 306,197 933,128 Paying admissions
(excludes charity and uninsured) 172,490 158,216 157,193 487,899
Charity and uninsured admissions 9,816 10,237 11,008 31,061
Admissions through emergency department 125,076 115,036 116,727
356,839 Paying admissions as a percentage of total admissions 94.6
% 93.9 % 93.5 % 94.0 % Charity and uninsured admissions as a
percentage of total admissions 5.4 % 6.1 % 6.5 % 6.0 % Emergency
department admissions as a percentage of total admissions 68.6 %
68.3 % 69.4 % 68.8 % Surgeries — inpatient 47,223 46,274 45,626
139,123 Surgeries — outpatient 63,008 63,805 61,468 188,281 Total
surgeries 110,231 110,079 107,094 327,404 Patient days — total
858,648 766,519 761,920 2,387,087 Adjusted patient days 1,486,139
1,373,480 1,365,662 4,225,281 Average length of stay (days) 4.71
4.55 4.53 4.60 Licensed beds (at end of period) 18,457 18,314
18,302 18,302 Average licensed beds 18,685 18,362 18,302 18,450
Utilization of licensed beds 51.1 % 45.9 % 45.3 % 47.4 %
Outpatient Visits Total visits 1,842,539 1,749,847 1,722,292
5,314,678 Paying visits (excludes charity and uninsured) 1,725,976
1,633,372 1,607,184 4,966,532 Charity and uninsured visits 116,563
116,475 115,108 348,146 Emergency department visits 697,001 643,036
638,248 1,978,285 Paying visits as a percentage of total visits
93.7 % 93.3 % 93.3 % 93.4 % Charity and uninsured visits as a
percentage of total visits 6.3 % 6.7 % 6.7 % 6.6 % Total emergency
department admissions and visits 822,077 758,072 754,975 2,335,124
Revenues Net patient revenues(3) $ 3,643 $ 3,443 $ 3,434 $
10,520
Revenues on a Per Adjusted Patient Admission and Per
Adjusted Patient Day Net patient revenue(3) per adjusted
patient admission $ 11,354 $ 11,249 $ 11,215 $ 11,274 Net patient
revenue(3) per adjusted patient day $ 2,451 $ 2,507 $ 2,515 $ 2,490
Total selected operating expenses (salaries, wages and
benefits, supplies and other operating expenses) per adjusted
patient admission(2) $ 10,561 $ 10,619 $ 10,771 $ 10,648
Net
Patient Revenues(3)
from: Medicare 21.5 % 20.4 % 19.8 %
20.6 % Medicaid 8.8 % 9.1 % 9.8 % 9.2 % Managed care 65.0 % 66.0 %
64.9 % 65.3 % Self-pay 1.0 % 0.2 % 0.9 % 0.7 % Indemnity and other
3.7 % 4.3 % 4.6 % 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 and provision for doubtful accounts.
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 3/31/2017
6/30/2017 9/30/2017 12/31/2017
12/31/2017 Admissions, Patient Days and
Surgeries Number of hospitals (at end of period) 76 76 73 72 72
Total admissions 196,907 190,394 185,389 186,185 758,875 Adjusted
patient admissions 347,150 342,439 332,035 332,642 1,354,266 Paying
admissions (excludes charity and uninsured) 186,648 179,889 174,803
176,158 717,498 Charity and uninsured admissions 10,259 10,505
10,586 10,027 41,377 Admissions through emergency department
126,473 121,807 120,493 123,887 492,660 Paying admissions as a
percentage of total admissions 94.8 % 94.5 % 94.3 % 94.6 % 94.5 %
Charity and uninsured admissions as a percentage of total
admissions 5.2 % 5.5 % 5.7 % 5.4 % 5.5 % Emergency department
admissions as a percentage of total admissions 64.2 % 64.0 % 65.0 %
66.5 % 64.9 % Surgeries — inpatient 51,800 52,083 50,939 50,292
205,114 Surgeries — outpatient 69,604 71,366 67,321 68,604 276,895
Total surgeries 121,404 123,449 118,260 118,896 482,009 Patient
days — total 923,339 874,930 853,059 857,728 3,509,056 Adjusted
patient days 1,603,698 1,552,302 1,502,831 1,505,130 6,163,961
Average length of stay (days) 4.69 4.60 4.60 4.61 4.62 Licensed
beds (at end of period) 20,439 20,435 19,433 19,141 19,141 Average
licensed beds 20,440 20,435 19,783 19,320 19,995 Utilization of
licensed beds 50.2 % 47.0 % 46.9 % 48.3 % 48.1 %
Outpatient
Visits Total visits 2,039,942 1,981,848 1,867,471 1,901,864
7,791,125 Paying visits (excludes charity and uninsured) 1,908,212
1,849,697 1,741,815 1,777,790 7,277,514 Charity and uninsured
visits 131,730 132,151 125,656 124,074 513,611 Emergency department
visits 733,051 724,785 685,096 711,268 2,854,200 Paying visits as a
percentage of total visits 93.5 % 93.3 % 93.3 % 93.5 % 93.4 %
Charity and uninsured visits as a percentage of total visits 6.5 %
6.7 % 6.7 % 6.5 % 6.6 % Total emergency department admissions and
visits 859,524 846,592 805,589 835,155 3,346,860
Revenues
Net patient revenues(3) $ 3,728 $ 3,719 $ 3,522 $ 3,860 $ 14,829
Revenues on a Per Adjusted Patient Admission and Per Adjusted
Patient Day Net patient revenue(3) per adjusted patient
admission $ 10,739 $ 10,860 $ 10,607 $ 11,604 $ 10,950 Net patient
revenue(3) per adjusted patient day $ 2,325 $ 2,396 $ 2,344 $ 2,565
$ 2,406
Total selected operating expenses (salaries, wages
and benefits, supplies and other operating expenses) per adjusted
patient admission(2) $ 10,288 $ 10,394 $ 10,367 $ 10,492 $ 10,384
Net Patient Revenues(3)
from: Medicare 23.1 % 22.0 %
22.0 % 20.4 % 21.9 % Medicaid 7.4 % 7.5 % 7.1 % 12.9 % 8.8 %
Managed care 65.2 % 65.9 % 66.1 % 61.5 % 64.6 % Self-pay 0.3 % 0.5
% 0.3 % 1.3 % 0.6 % Indemnity and other 4.0 % 4.1 % 4.5 % 3.9 % 4.1
% (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 and provision for doubtful accounts.
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 MonthsEnded
3/31/2018 6/30/2018 9/30/2018 9/30/2018
Admissions, Patient Days and Surgeries Number of
hospitals (at end of period) 68 68 68 68 Total admissions 178,189
168,135 168,202 514,526 Adjusted patient admissions 312,297 305,541
306,199 924,037 Paying admissions (excludes charity and uninsured)
168,554 157,904 157,197 483,655 Charity and uninsured admissions
9,635 10,231 11,005 30,871 Admissions through emergency department
122,922 114,945 116,727 354,594 Paying admissions as a percentage
of total admissions 94.6 % 93.9 % 93.5 % 94.0 % Charity and
uninsured admissions as a percentage of total admissions 5.4 % 6.1
% 6.5 % 6.0 % Emergency department admissions as a percentage of
total admissions 69.0 % 68.4 % 69.4 % 68.9 % Surgeries — inpatient
45,940 46,057 45,626 137,623 Surgeries — outpatient 61,049 63,615
61,468 186,132 Total surgeries 106,989 109,672 107,094 323,755
Patient days — total 840,786 765,659 761,921 2,368,366 Adjusted
patient days 1,448,356 1,372,048 1,365,664 4,186,068 Average length
of stay (days) 4.72 4.55 4.53 4.60 Licensed beds (at end of period)
17,946 17,946 17,934 17,934 Average licensed beds 17,946 17,946
17,934 17,942 Utilization of licensed beds 52.1 % 46.9 % 46.2 %
48.4 %
Outpatient Visits Total visits 1,793,901 1,748,312
1,722,292 5,264,505 Paying visits (excludes charity and uninsured)
1,680,249 1,631,963 1,607,180 4,919,392 Charity and uninsured
visits 113,652 116,349 115,112 345,113 Emergency department visits
682,603 642,623 638,248 1,963,474 Paying visits as a percentage of
total visits 93.7 % 93.3 % 93.3 % 93.4 % Charity and uninsured
visits as a percentage of total visits 6.3 % 6.7 % 6.7 % 6.6 %
Total emergency department admissions and visits 805,525 757,568
754,975 2,318,068
Revenues Net patient revenues(2) $ 3,570 $
3,432 $ 3,432 $ 10,434
Revenues on a Per Adjusted Patient
Admission and Per Adjusted Patient Day Net patient revenue(2)
per adjusted patient admission $ 11,431 $ 11,233 $ 11,208 $ 11,292
Net patient revenue(2) per adjusted patient day $ 2,465 $ 2,501 $
2,513 $ 2,493
Net Patient Revenues(2)
from: Medicare
21.3 % 20.4 % 19.8 % 20.5 % Medicaid 8.8 % 9.1 % 9.8 % 9.2 %
Managed care 64.9 % 66.1 % 64.9 % 65.3 % Self-pay 1.3 % 0.1 % 0.9 %
0.8 % Indemnity and other 3.7 % 4.3 % 4.6 % 4.2 % (1)
Information for our Hospital Operations and other segment is
presented on a same-hospital basis, which includes the results of
our same 68 hospitals operated throughout the nine months ended
September 30, 2018 and 2017 and associated outpatient facilities,
but excludes the results of hospitals Tenet divested since January
1, 2017. (2) Less implicit price concessions and provision for
doubtful accounts.
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 3/31/2017
6/30/2017 9/30/2017 12/31/2017
12/31/2017 Admissions, Patient Days and
Surgeries Number of hospitals (at end of period) 68 68 68 68 68
Total admissions 177,624 172,048 171,766 175,152 696,590 Adjusted
patient admissions 310,137 306,278 305,300 310,485 1,232,200 Paying
admissions (excludes charity and uninsured) 168,523 162,630 161,743
165,400 658,296 Charity and uninsured admissions 9,101 9,418 10,023
9,752 38,294 Admissions through emergency department 114,767
110,486 112,210 116,901 454,364 Paying admissions as a percentage
of total admissions 94.9 % 94.5 % 94.2 % 94.4 % 94.5 % Charity and
uninsured admissions as a percentage of total admissions 5.1 % 5.5
% 5.8 % 5.6 % 5.5 % Emergency department admissions as a percentage
of total admissions 64.6 % 64.2 % 65.3 % 66.7 % 65.2 % Surgeries —
inpatient 46,900 47,288 47,315 47,350 188,853 Surgeries —
outpatient 62,112 63,642 61,562 63,410 250,726 Total surgeries
109,012 110,930 108,877 110,760 439,579 Patient days — total
833,761 792,160 789,040 805,567 3,220,528 Adjusted patient days
1,433,858 1,390,154 1,379,096 1,402,038 5,605,146 Average length of
stay (days) 4.69 4.60 4.59 4.60 4.62 Licensed beds (at end of
period) 17,964 17,980 18,006 17,946 17,946 Average licensed beds
17,964 17,980 18,007 17,970 17,980 Utilization of licensed beds
51.6 % 48.4 % 47.6 % 48.7 % 49.1 %
Outpatient Visits Total
visits 1,810,801 1,766,625 1,715,650 1,771,336 7,064,412 Paying
visits (excludes charity and uninsured) 1,698,917 1,652,532
1,600,195 1,653,581 6,605,225 Charity and uninsured visits 111,884
114,093 115,455 117,755 459,187 Emergency department visits 650,777
645,803 627,415 659,617 2,583,612 Paying visits as a percentage of
total visits 93.8 % 93.5 % 93.3 % 93.4 % 93.5 % Charity and
uninsured visits as a percentage of total visits 6.2 % 6.5 % 6.7 %
6.6 % 6.5 % Total emergency department admissions and visits
765,544 756,289 739,625 776,518 3,037,976
Revenues Net
patient revenues(2) $ 3,343 $ 3,325 $ 3,237 $ 3,609 $ 13,514
Revenues on a Per Adjusted Patient Admission and Per Adjusted
Patient Day Net patient revenue(2) per adjusted patient
admission $ 10,780 $ 10,856 $ 10,603 $ 11,624 $ 10,967 Net patient
revenue(2) per adjusted patient day $ 2,331 $ 2,392 $ 2,347 $ 2,574
$ 2,411
Net Patient Revenues(2)
from: Medicare 23.5 %
22.3 % 21.9 % 20.3 % 21.9 % Medicaid 7.0 % 7.1 % 6.8 % 13.2 % 8.7 %
Managed care 65.0 % 65.8 % 66.1 % 61.0 % 64.4 % Self-pay 0.3 % 0.6
% 0.3 % 1.5 % 0.7 % Indemnity and other 4.2 % 4.2 % 4.9 % 4.0 % 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 68 hospitals operated throughout the nine
months ended September 30, 2018 and 2017 and associated outpatient
facilities, but excludes the results of hospitals Tenet divested
since January 1, 2017. (2) Less implicit price concessions and
provision for doubtful accounts.
TENET HEALTHCARE CORPORATION
SEGMENT REPORTING
(Unaudited)
(Dollars in millions)
September 30, December
31, 2018 2017 Assets Hospital Operations
and other $ 15,556 $ 16,466 Ambulatory Care 5,640 5,822 Conifer
1,069 1,097
Total $ 22,265
$ 23,385 Three Months
Ended Nine Months Ended September 30,
September 30, 2018 2017 2018
2017 Capital expenditures: Hospital Operations and
other $ 115 $ 122 $ 343 $ 441 Ambulatory Care 18 16 46 37 Conifer 3
6 15 14
Total $
136 $ 144 $ 404
$ 492 Net operating
revenues: Hospital Operations and other total prior to
inter-segment eliminations(1) $ 3,762 $ 3,866 $ 11,442 $ 12,066
Ambulatory Care 502 468 1,531 1,395 Conifer Tenet 146 149 440 463
Other customers 225 252 721 740 Total
Conifer revenues 371 401 1,161 1,203 Inter-segment eliminations
(146 ) (149 ) (440 ) (463 )
Total $ 4,489
$ 4,586 $ 13,694
$ 14,201 Equity in earnings of
unconsolidated affiliates: Hospital Operations and other $ 2 $
4 $ 6 $ 4 Ambulatory Care 31 34 91 91
Total $ 33 $ 38
$ 97 $ 95
Adjusted EBITDA: Hospital Operations and other(2) $ 312 $
269 $ 1,059 $ 924 Ambulatory Care 184 159 547 476 Conifer 81
79 270 204
Total $ 577
$ 507 $ 1,876
$ 1,604 Depreciation and
amortization: Hospital Operations and other $ 175 $ 185 $ 514 $
560 Ambulatory Care 17 22 51 66 Conifer 12 12 37
36
Total $ 204 $
219 $ 602 $ 662
(1) Hospital Operations and other revenues includes
health plan revenues of $8 million and $14 million for the three
and nine months ended September 30, 2018, respectively and $10
million and $100 million for the three and nine months ended
September 30, 2017, respectively. (2) Hospital Operations and other
Adjusted EBITDA excludes health plan EBITDA of $9 million for both
of the three and nine month periods ended September 30, 2018 and
$(6) million and $(41) million for the three and nine months ended
September 30, 2017, respectively.
TENET HEALTHCARE CORPORATION
STATEMENT OF OPERATIONS – AMBULATORY CARE
SEGMENT
(Unaudited)
(Dollars in millions)
Three Months Ended September
30, 2018 2017
AmbulatoryCare
asReportedUnderGAAP
UnconsolidatedAffiliates
AmbulatoryCare
asReportedUnderGAAP
UnconsolidatedAffiliates
Net operating revenues: Net operating revenues before
provision for doubtful accounts $ 477 $ 518 Less: Provision for
doubtful accounts 9 11
Net operating
revenues(1) $ 502 $ 546
468 507 Equity in earnings of unconsolidated
affiliates(2) 31 — 34 —
Operating expenses: Salaries, wages and benefits 157 137 155
122 Supplies 104 143 95 133 Other operating expenses, net 88 114 93
93 Depreciation and amortization 17 18 22 17 Impairment and
restructuring charges, and acquisition-related costs 13 —
62 —
Operating income 154
134 75 142 Interest expense (33 ) (7 ) (35 )
(6 ) Other 3 — 2 —
Net income from
continuing operations, before income taxes 124
127 42 136 Income tax expense (14 ) (2 ) (20 )
(2 )
Net income 110 $ 125
22 $ 134 Less: Net income available to
noncontrolling interests 70 61
Net income
available (loss attributable) to Tenet Healthcare Corporation
common shareholders $ 40 $
(39 ) Equity in earnings of unconsolidated
affiliates $ 31 $ 34 (1) On
a same-facility system-wide basis, net revenue in Tenet’s
Ambulatory Care segment increased 6.7% during the three months
ended September 30, 2018, with cases increasing 5.0% and revenue
per case increasing 1.6%. (2) At September 30, 2018, 107 of the 335
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 228 facilities and account for these investments as
consolidated subsidiaries.
TENET HEALTHCARE CORPORATION
STATEMENT OF OPERATIONS – AMBULATORY CARE
SEGMENT
(Unaudited)
(Dollars in millions)
Nine Months Ended September 30,
2018 2017
AmbulatoryCare
asReportedUnderGAAP
UnconsolidatedAffiliates
AmbulatoryCare
asReportedUnderGAAP
UnconsolidatedAffiliates
Net operating revenues: Net operating revenues before
provision for doubtful accounts $ 1,422 $ 1,492 Less: Provision for
doubtful accounts 27 31
Net operating
revenues(1) $ 1,531 $ 1,586
1,395 1,461 Equity in earnings of unconsolidated
affiliates(2) 91 — 91 —
Operating expenses: Salaries, wages and benefits 484 391 458
352 Supplies 316 417 285 383 Other operating expenses, net 275 333
267 290 Depreciation and amortization 51 51 66 49 Impairment and
restructuring charges, and acquisition-related costs 20 — 70 1 Net
gains on sales, consolidation and deconsolidation of facilities (1
) — (7 ) —
Operating income 477
394 347 386 Interest expense (106 ) (17 ) (109
) (17 ) Other 6 1 5 —
Net income
from continuing operations, before income taxes 377
378 243 369 Income tax expense (47 ) (6 ) (58
) (6 )
Net income 330 $ 372
185 $ 363 Less: Net income available to
noncontrolling interests 209 193
Net income
available (loss attributable) to Tenet Healthcare Corporation
common shareholders $ 121 $
(8 ) Equity in earnings of unconsolidated
affiliates $ 91 $ 91 (1) On
a same-facility system-wide basis, net revenue in Tenet’s
Ambulatory Care segment increased 5.6% during the nine months ended
September 30, 2018, with cases increasing 4.3% and revenue per case
increasing 1.3%. (2) At September 30, 2018, 107 of the 335
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 228 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 2017 and 2018. 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
2017 and 2018. 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 2017 and 2018.
TENET HEALTHCARE CORPORATIONAdditional
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 YTD Net
income available (loss attributable) to Tenet Healthcare
Corporation common shareholders $ 99 $
26 $ (9 ) $ 116 Less: Net
income available to noncontrolling interests (92 ) (82 ) (74 ) (248
) Income from discontinued operations, net of tax 1 2
— 3 Income from continuing operations 190 106 65 361
Income tax expense (70 ) (44 ) (6 ) (120 ) Loss from early
extinguishment of debt (1 ) (1 ) — (2 ) Other non-operating
expense, net (1 ) (1 ) — (2 ) Interest expense (255 ) (254 ) (249 )
(758 ) Operating income 517 406 320 1,243 Litigation and
investigation costs (6 ) (13 ) (9 ) (28 ) Net gains (losses) on
sales, consolidation and deconsolidation of facilities 110 8 (7 )
111 Impairment and restructuring charges, and acquisition-related
costs (47 ) (30 ) (46 ) (123 ) Depreciation and amortization (204 )
(194 ) (204 ) (602 ) Income (loss) from divested and closed
businesses (1 ) 1 9 9
Adjusted EBITDA
$ 665 $ 634 $
577 $ 1,876 Net operating
revenues $ 4,699 $ 4,506 $ 4,489 $ 13,694 Less: Net operating
revenues from health plans 6 — 8 14
Adjusted net operating revenues $ 4,693
$ 4,506 $ 4,481 $
13,680 Net income available (loss
attributable) to Tenet Healthcare Corporation common shareholders
as a % of net operating revenues 2.1 % 0.6
% (0.2 )% 0.8 % Adjusted
EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA
margin) 14.2 % 14.1 % 12.9
% 13.7 %
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 2017
(Unaudited)
(Dollars in millions)
2017 1st Qtr
2nd Qtr 3rd Qtr 4th Qtr
Total Net loss attributable to Tenet Healthcare
Corporation common shareholders $ (53 )
$ (55 ) $ (367 ) $
(229 ) $ (704 ) Less: Net income
available to noncontrolling interests (89 ) (87 ) (78 ) (130 ) (384
) Income (loss) from discontinued operations, net of tax (1 ) 1
(1 ) 1 — Income (loss) from continuing
operations 37 31 (288 ) (100 ) (320 ) Income tax benefit (expense)
33 12 60 (324 ) (219 ) Loss from early extinguishment of debt — (26
) (138 ) — (164 ) Other non-operating expense, net (5 ) (5 ) (4 )
(8 ) (22 ) Interest expense (258 ) (260 ) (257 ) (253 ) (1,028 )
Operating income 267 310 51 485 1,113 Litigation and investigation
costs (5 ) (1 ) (6 ) (11 ) (23 ) Net gains on sales, consolidation
and deconsolidation of facilities 15 23 104 2 144 Impairment and
restructuring charges, and acquisition-related costs (33 ) (41 )
(329 ) (138 ) (541 ) Depreciation and amortization (221 ) (222 )
(219 ) (208 ) (870 ) Loss from divested and closed businesses (16 )
(19 ) (6 ) — (41 )
Adjusted EBITDA $
527 $ 570 $ 507
$ 840 $ 2,444
Net operating revenues $ 4,813 $ 4,802 $ 4,586 $ 4,978 $
19,179 Less: Net operating revenues from health plans 65 25
10 10 110
Adjusted net operating
revenues $ 4,748 $ 4,777
$ 4,576 $ 4,968
$ 19,069 Net loss attributable to
Tenet Healthcare Corporation common shareholders as a % of net
operating revenues (1.1 )% (1.1 )%
(8.0 )% (4.6 )% (3.7 )%
Adjusted EBITDA as a % of adjusted net operating revenues
(Adjusted EBITDA margin) 11.1 % 11.9
% 11.1 % 16.9 % 12.8
%
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #2 – Reconciliation 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
YTD Net income available (loss attributable) to Tenet
Healthcare Corporation common shareholders $ 99
$ 26 $ (9 ) $
116 Net income from discontinued operations 1 $ 2
— 3 Net income (loss) from continuing
operations 98 24 (9 ) 113 Less: Impairment and restructuring
charges, and acquisition-related costs (47 ) (30 ) (46 ) (123 )
Litigation and investigation costs (6 ) (13 ) (9 ) (28 ) Net gains
(losses) on sales, consolidation and deconsolidation of facilities
110 8 (7 ) 111 Loss from early extinguishment of debt (1 ) (1 ) —
(2 ) Income (loss) from divested and closed businesses (1 ) 1 9 9
Tax impact of above items (16 ) 8 14 6
Adjusted net income available from continuing operations to
common shareholders $ 59 $
51 $ 30 $ 140
Diluted earnings (loss) per share from continuing
operations $ 0.95 $ 0.23 $
(0.09 ) $ 1.09 Less: Impairment and
restructuring charges, and acquisition-related costs
(0.46
) (0.29 ) (0.44 ) (1.18
) Litigation and investigation costs
(0.06 )
(0.12 ) (0.09 ) (0.27 )
Net gains (losses) on sales, consolidation and deconsolidation of
facilities
1.08 0.07 (0.07 )
1.07 Loss from early extinguishment of debt
(0.01
) (0.01 ) — (0.02 )
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
0.06 Adjusted diluted earnings per share from
continuing operations $ 0.57 $
0.49 $ 0.29 $ 1.35
Weighted average basic shares
outstanding (in thousands)
101,392 102,147 102,402 101,980
Weighted average dilutive shares
outstanding (in thousands)
102,656 104,177 104,575 103,802
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP
disclosures
Table #2 – Reconciliation of Net Loss
Attributable to
Tenet Healthcare Corporation Common
Shareholders to Adjusted Net Income Available (Loss Attributable)
from Continuing Operations to Common Shareholders for 2017
(Unaudited)
(Dollars in millions except per share amounts)
2017
1st Qtr 2nd Qtr 3rd Qtr
4th Qtr Total Net loss attributable to
Tenet Healthcare Corporation common shareholders $
(53 ) $ (55 ) $
(367 ) $ (229 ) $
(704 ) Net income (loss) from discontinued operations
(1 ) $ 1 (1 ) 1 — Net loss from continuing
operations (52 ) (56 ) (366 ) (230 ) (704 ) Less: Impairment and
restructuring charges, and acquisition-related costs (33 ) (41 )
(329 ) (138 ) (541 ) Litigation and investigation costs (5 ) (1 )
(6 ) (11 ) (23 ) Net gains on sales, consolidation and
deconsolidation of facilities 15 23 104 2 144 Loss from early
extinguishment of debt — (26 ) (138 ) — (164 ) Loss from divested
and closed businesses (16 ) (19 ) (6 ) — (41 ) Tax impact of above
items 14 25 26 49 114 Tax reform adjustment — — — (252 ) (252 )
Noncontrolling interests impact of above items — — —
(23 ) (23 )
Adjusted net income available (loss
attributable) from continuing operations to common shareholders
$ (27 ) $ (17 ) $
(17 ) $ 143 $ 82
Diluted loss per share from continuing
operation $ (0.52 ) $ (0.56
) $ (3.63 ) $ (2.28
) $ (7.00 ) Less: Impairment and
restructuring charges, and acquisition-related costs
(0.33
) (0.41 ) (3.26 ) (1.35
) (5.34 ) Litigation and investigation costs
(0.05 ) (0.01 ) (0.06 )
(0.11 ) (0.23 ) Net gains on sales,
consolidation and deconsolidation of facilities
0.15
0.23 1.03 0.02 1.42 Loss from early
extinguishment of debt
— (0.26 ) (1.37
) — (1.62 ) Loss from divested and
closed businesses
(0.16 ) (0.19 )
(0.06 ) — (0.40 ) Tax impact of
above items
0.14 0.25 0.26 0.48
1.12 Tax reform adjustment
— — —
(2.47 ) (2.49 ) Noncontrolling
interests impact of above items
— —
— (0.23 ) (0.23 )
Adjusted diluted earnings (loss) per share from continuing
operations $ (0.27 ) $ (0.17
) $ (0.17 ) $ 1.40
$ 0.81
Weighted average basic shares
outstanding (in thousands)
100,000 100,612 100,812 100,945
100,592
Weighted average dilutive shares
outstanding (in thousands)
100,848 101,294 101,523 101,853
101,380
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)
2018 1st Qtr
2nd Qtr 3rd Qtr YTD Net cash
provided by operating activities $ 113 $
348 $ 338 $ 799 Purchases of
property and equipment (143 ) (125 ) (136 ) (404 )
Free cash
flow $ (30 ) $ 223
$ 202 $ 395 Net
cash provided by (used in) investing activities $
373 $ (148 ) $ (105
) $ 120 Net cash used in financing
activities $ (123 ) $ (771
) $ (136 ) $ (1,030
) Net cash provided by operating activities
$ 113 $ 348 $ 338
$ 799 Less: Payments for restructuring charges,
acquisition-related costs, and litigation costs and settlements (33
) (30 ) (50 ) (113 ) Net cash used in operating activities from
discontinued operations (1 ) (2 ) (1 ) (4 )
Adjusted net cash
provided by operating activities from continuing operations
147 380 389 916 Purchases of property
and equipment (143 ) (125 ) (136 ) (404 )
Adjusted free cash
flow – continuing operations $ 4 $
255 $ 253 $ 512
(Dollars in millions)
2017 1st
Qtr 2nd Qtr 3rd Qtr 4th
Qtr Total Net cash provided by operating
activities $ 186 $ 215 $
308 $ 491 $ 1,200 Purchases of
property and equipment (198 ) (150 ) (144 ) (215 ) (707 )
Free
cash flow $ (12 ) $ 65
$ 164 $ 276
$ 493 Net cash provided by (used in)
investing activities $ (189 ) $
(119 ) $ 535 $ (206
) $ 21 Net cash used in financing
activities $ (141 ) $ (193
) $ (889 ) $ (103
) $ (1,326 ) Net cash
provided by operating activities $ 186 $
215 $ 308 $ 491 $
1,200
Less: Payments for restructuring charges,
acquisition-related costs, and litigation costs and settlements
(24 ) (38 ) (26 ) (37 ) (125 ) Net cash provided by (used in)
operating activities from discontinued operations 2 (4 ) (1
) (2 ) (5 )
Adjusted net cash provided by operating activities
from continuing operations 208 257 335
530 1,330 Purchases of property and equipment (198 )
(150 ) (144 ) (215 ) (707 )
Adjusted free cash flow – continuing
operations $ 10 $ 107
$ 191 $ 315 $
623
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 2018 2018 Low
High Low High Net income
available (loss attributable) to Tenet Healthcare Corporation
common shareholders $ (32 ) $
33 $ 84 $ 149 Less: Net income
available to noncontrolling interests (117 ) (137 ) (365 ) (385 )
Net income (loss) from discontinued operations, net of tax (3 ) 2 —
5 Income tax expense (55 ) (70 ) (175 ) (190 ) Interest expense
(252 ) (242 ) (1,010 ) (1,000 ) Loss from early extinguishment of
debt(1) — — (2 ) (2 ) Other non-operating expense, net (3 ) (3 ) (5
) (5 ) Net gains on sales, consolidation and deconsolidation of
facilities(1) — — 111 111 Impairment and restructuring charges,
acquisition-related costs, and litigation costs and settlements(2)
(39 ) (19 ) (190 ) (170 ) Depreciation and amortization (208 ) (198
) (810 ) (800 ) Income (loss) from divested and closed businesses
(4 ) 1 5 10
Adjusted EBITDA $
649 $ 699 $ 2,525
$ 2,575 Income (loss) from
continuing operations $ (29 ) $
31 $ 84 $ 144 Net operating
revenues $ 4,420 $ 4,620 $
18,100 $ 18,300 Income (loss) from
continuing operations as a % of operating revenues (0.7
)% 0.7 % 0.5 % 0.8
% Adjusted EBITDA as a % of net operating revenues
(Adjusted EBITDA margin) 14.7 % 15.1
% 14.0 % 14.1 % (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 2018. 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 – Reconciliation 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
2018 2018 Low High Low
High Net income available (loss attributable) to
Tenet Healthcare Corporation common shareholders $
(32 ) $ 33 $ 84 $
149 Net income (loss) from discontinued operations, net of
tax (3 ) $ 2 — 5 Net income (loss) from
continuing operations (29 ) 31 84 144 Less: Impairment and
restructuring charges, acquisition-related costs, and litigation
costs and settlements (39 ) (19 ) (190 ) (170 ) Net gains on sales,
consolidation and deconsolidation of facilities — — 111 111 Loss
from early extinguishment of debt — — (2 ) (2 ) Income (loss) from
divested and closed businesses (4 ) 1 5 10 Tax impact of above
items 4 (1 ) 10 5
Adjusted net income
available from continuing operations to common shareholders
$ 10 $ 50 $
150 $ 190 Diluted
earnings (loss) per share from continuing operations $
(0.28 ) $ 0.30 $ 0.81
$ 1.38 Less: Impairment and restructuring charges,
acquisition-related costs, and litigation costs and settlements
(0.37 ) (0.18 ) (1.83 )
(1.63 ) Net gains on sales, consolidation and
deconsolidation of facilities
— — 1.07
1.07 Loss from early extinguishment of debt
—
— (0.02 ) (0.02 ) Income (loss)
from divested and closed businesses
(0.04 )
0.01 0.05 0.10 Tax impact of above items
0.04 (0.01 ) 0.10
0.05 Adjusted diluted earnings per share from
continuing operations $ 0.10 $
0.48 $ 1.44 $ 1.83
Weighted average basic shares outstanding (in
thousands) 102,000 102,000 102,000
102,000 Weighted average dilutive shares outstanding (in
thousands) 105,000 105,000 104,000
104,000
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)
2018 Low High
Net cash provided by operating activities $
1,060 $ 1,335 Less: Payments for restructuring
charges, acquisition-related costs and litigation costs and
settlements(1) (160 ) (140 ) Net cash used in operating activities
from discontinued operations (5 ) —
Adjusted net cash
provided by operating activities – continuing operations
1,225 1,475 Purchases of property and equipment –
continuing operations (625 ) (675 )
Adjusted free cash flow –
continuing operations(2) $ 600
$ 800 (1) The Company has provided an
estimate of payments that it anticipates in 2018 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/20181105005945/en/
Tenet Healthcare CorporationInvestor
ContactBrendan
Strong469-893-6992investorrelations@tenethealth.comorMedia
ContactLesley
Bogdanow469-893-2640mediarelations@tenethealth.com
Tenet Healthcare (NYSE:THC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tenet Healthcare (NYSE:THC)
Historical Stock Chart
From Apr 2023 to Apr 2024