- Tenet reported net income from continuing operations
attributable to Tenet common shareholders of $15 million or $0.14
per diluted share in the second quarter of 2019 compared to $24
million or $0.23 per diluted share in the second quarter of
2018.
- Adjusted diluted earnings per share from continuing operations
were $0.56 in the second quarter of 2019, above the midpoint of the
Company’s Outlook and compared to $0.49 in the second quarter of
2018.
- Adjusted EBITDA for the second quarter of 2019 was $657
million, which was above the midpoint of the Company’s Outlook.
Adjusted EBITDA consisted of $347 million in the Hospital
Operations and other segment, $207 million in the Ambulatory Care
segment and $103 million in the Conifer segment.
- Hospital segment same-hospital net patient service revenues
grew 5.7 percent in the second quarter of 2019: admissions
increased 3.3 percent, adjusted admissions increased 2.2 percent
and net revenue per adjusted admission increased 3.4 percent.
- Ambulatory Care segment same-facility system-wide surgical
revenue grew 5.2 percent in the second quarter of 2019, with
surgical cases up 2.6 percent and surgical revenue per case up 2.5
percent. Adjusted EBITDA less facility-level noncontrolling
interest increased 9.1 percent.
- Conifer’s Adjusted EBITDA grew 13.2 percent and margins
increased 540 basis points to 29.0 percent reflecting ongoing
improvements in its cost structure. Conifer’s revenues decreased
8.0 percent in the second quarter of 2019 primarily as a result of
divestitures by Tenet and other customers.
- Updating 2019 Outlook for net income and earnings per share;
reiterating previously provided 2019 Outlook for revenue, Adjusted
EBITDA, Adjusted EPS and Adjusted Free Cash Flow.
Tenet Healthcare Corporation (NYSE: THC) reported net income
from continuing operations attributable to Tenet common
shareholders of $15 million in the second quarter of 2019 compared
to net income of $24 million in the second quarter of 2018.
Adjusted EBITDA was $657 million in the second quarter of 2019
above the midpoint of the Company’s Outlook range of $625 million
to $675 million.
Ronald A. Rittenmeyer, Executive Chairman and CEO, said, “We
delivered another strong quarter which included a very meaningful
improvement in volume growth in our hospital portfolio, continued
volume and earnings growth at USPI and strong financial results at
Conifer. We are continuing to take appropriate actions to improve
our cost structure and our focus on improving volume growth is
showing results.”
Results for the Quarter Ended June 30,
2019
Tenet reported net income from continuing operations
attributable to Tenet common shareholders of $15 million, or $0.14
per diluted share, in the second quarter of 2019 compared to net
income of $24 million, or $0.23 per diluted share, in the second
quarter of 2018.
After adjusting for the items listed on Table #2, Tenet produced
Adjusted net income from continuing operations available to Tenet
common shareholders of $59 million, or $0.56 per diluted share, in
the second quarter of 2019, compared to $51 million, or $0.49 per
diluted share, in the second quarter of 2018.
Adjusted EBITDA was $657 million in the second quarter of 2019
compared to $634 million in the second quarter of 2018, an increase
of 3.6 percent. Results in the second quarter of 2019 included $13
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 $4 million benefit in the
second quarter of 2018.
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 $3.827 billion in the second quarter of 2019, up 2.5
percent from the second quarter of 2018. The increase in revenue
was primarily due to revenue growth on a same-hospital basis,
partially offset by hospital divestitures.
On a same-hospital basis, net patient service revenues were
$3.547 billion in the second quarter of 2019, up 5.7 percent from
the second quarter of 2018. Admissions increased 3.3 percent on a
same-hospital basis, adjusted admissions increased 2.2 percent and
revenue per adjusted admission increased 3.4 percent.
Adjusted EBITDA in Tenet’s hospital segment was $347 million in
the second quarter of 2019 compared to $345 million in the second
quarter of 2018.
Selected operating expenses in the Hospital Operations and other
segment increased 3.5 percent on a per adjusted admission basis in
the second 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.
Salaries, wages and benefits increased 3.4 percent per adjusted
admission in the second quarter of 2019, supply expense increased
1.2 percent and other operating expenses increased 5.3 percent.
Ambulatory Care Segment
The Ambulatory Care segment produced net operating revenues of
$524 million in the second quarter of 2019, a decrease of 1.3
percent compared to $531 million in the second quarter of 2018. The
decline in revenue was due to the divestiture of Aspen Healthcare,
the Company’s former business in the U.K. that was sold in the
third quarter of 2018. Aspen generated $47 million of revenue and
$7 million of Adjusted EBITDA and Adjusted EBITDA less
facility-level noncontrolling interest in the second quarter of
2018. After normalizing for the divestiture of Aspen, the
Ambulatory Care segment generated Adjusted EBITDA of $207 million
in the second quarter of 2019, up 8.4 percent from $191 million in
the second quarter of 2018 and Adjusted EBITDA less facility-level
noncontrolling interest was $132 million, up 9.1 percent from $121
million in the second 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 344 facilities at June 30, 2019, the results of 112 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 5.3 percent in the second quarter of 2019, with
cases increasing 3.2 percent and revenue per case increasing 2.0
percent. In the surgical business, which represents the majority of
the revenue in the Ambulatory segment, same-facility system-wide
revenue grew 5.2 percent in the second quarter of 2019, with cases
up 2.6 percent and revenue per case up 2.5 percent.
Conifer Segment
Conifer generated $103 million of Adjusted EBITDA in the second
quarter of 2019, up 13.2 percent from $91 million in the second
quarter of 2018. Adjusted EBITDA margins increased 540 basis points
to 29.0 percent, reflecting ongoing improvements in Conifer’s cost
structure as well as $13 million of annual service performance
incentive revenues from customers that were recognized in the
second quarter of 2019.
During the second quarter of 2019, Conifer’s revenue declined
8.0 percent to $355 million, from $386 million in the second
quarter of 2018, primarily due to client attrition following
divestitures by Tenet and other customers. Revenue from third-party
customers declined 13.6 percent to $209 million in the second
quarter of 2019.
Results for the Six Months Ended June
30, 2019
Tenet reported a net loss from continuing operations
attributable to Tenet common shareholders of $12 million, or $0.12
per diluted share, in the first half of 2019 compared to net income
of $122 million, or $1.18 per diluted share, in the first half of
2018. The 2019 period included a $47 million pre-tax loss from the
extinguishment of debt or $0.45 per diluted share. The 2018 period
included a $118 million pre-tax gain, or $1.15 per diluted share,
from the sales, consolidation and deconsolidation of
facilities.
After adjusting for the items listed on Table #2, Tenet produced
Adjusted net income from continuing operations available to Tenet
common shareholders of $115 million, or $1.10 per diluted share, in
the first half of 2019, compared to $110 million, or $1.06 per
diluted share, in the first half of 2018.
Adjusted EBITDA was $1.270 billion in the first half of 2019
compared to $1.299 billion in the first half of 2018, a decline of
$29 million or 2.2 percent. The decline was primarily attributable
to: (i) a $37 million year-over-year increase in expense due to a
decline in the treasury rate used to discount the Company’s
actuarial liabilities; (ii) $15 million of lower earnings related
to a risk-based contracting business in California; and, (iii) the
divestiture of Aspen Healthcare, which generated $14 million of
Adjusted EBITDA in the first half of 2018.
Hospital Operations and Other Segment
Net operating revenues in the Hospital Operations and other
segment were $7.689 billion in the first half of 2019, essentially
flat with the first half of 2018.
On a same-hospital basis, net patient service revenues were
$7.104 billion in the first half of 2019, up 3.7 percent from the
first half of 2018. Admissions increased 1.6 percent on a
same-hospital basis in the first half of 2019, adjusted admissions
increased 1.4 percent and revenue per adjusted admission increased
2.3 percent.
Adjusted EBITDA in Tenet’s hospital segment was $684 million in
the first half of 2019 compared to $747 million in the first half
of 2018. The $63 million decline was primarily due to: (i) a $37
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) $15 million of lower earnings related to a risk-based
contracting business in California.
Selected operating expenses in the Hospital Operations and other
segment increased 3.7 percent on a per adjusted admission basis in
the first half 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.
Salaries, wages and benefits increased 3.1 percent per adjusted
admission in the first half of 2019, supply expense increased 0.6
percent and other operating expenses increased 7.3 percent.
Ambulatory Care Segment
The Ambulatory Care segment produced net operating revenues of
$1.004 billion in the first half of 2019, a decrease of 2.4 percent
compared to $1.029 billion in the first half of 2018. The decline
in revenue was due to the divestiture of Aspen Healthcare, the
Company’s former business in the U.K. that was sold in the third
quarter of 2018. Aspen generated $96 million of revenue and $14
million of Adjusted EBITDA and Adjusted EBITDA less facility-level
noncontrolling interest in the first half of 2018. After
normalizing for the divestiture of Aspen, the Ambulatory Care
segment generated Adjusted EBITDA of $384 million in the first half
of 2019, up 10.0 percent from $349 million in the first half of
2018 and Adjusted EBITDA less facility-level noncontrolling
interest was $244 million, up 9.4 percent from $223 million in the
first half of 2018.
On a same-facility system-wide basis, revenue in the Ambulatory
Care segment increased 4.8 percent in the first half of 2019, with
cases increasing 2.1 percent and revenue per case increasing 2.7
percent. In the surgical business, which represents the majority of
the revenue in the Ambulatory segment, same-facility system-wide
revenue grew 4.7 percent in the first half of 2019, with cases up
2.7 percent and revenue per case up 2.0 percent.
Conifer Segment
Conifer generated $202 million of Adjusted EBITDA in the first
half of 2019, up 6.9 percent from $189 million in the first half of
2018. Adjusted EBITDA margins increased 480 basis points to 28.7
percent, reflecting ongoing improvements in Conifer’s cost
structure.
During the first half of 2019, Conifer’s revenue declined 10.9
percent to $704 million, from $790 million in the first half of
2018 primarily due to client attrition following divestitures by
Tenet and other customers. Revenue from third-party customers
declined 16.9 percent to $412 million in the first half of
2019.
Cash Flow and Liquidity
Cash and cash equivalents were $249 million at June 30, 2019
compared to $252 million at March 31, 2019. The Company had $190
million of outstanding borrowings on its $1 billion credit line as
of June 30, 2019. Accounts receivable days outstanding from
continuing operations were 58.4 at June 30, 2019 compared to 58.6
at March 31, 2019.
Net cash provided by operating activities was $294 million in
the first half of 2019, representing a $167 million decrease
compared to $461 million in the first half of 2018. After
subtracting $336 million and $268 million of capital expenditures
in the first half of 2019 and 2018, respectively, Free Cash Flow
was an outflow of $42 million in the first half of 2019, a decrease
of $235 million compared to Free Cash Flow of $193 million in the
first half of 2018. Adjusted Free Cash Flow was $43 million in the
first half of 2019, representing a $216 million decrease from $259
million of Adjusted Free Cash Flow in the first half of 2018.
Net cash used in investing activities was $303 million in the
first half of 2019 compared to $225 million of net cash provided by
investing activities in the first half of 2018. Results in the
first half of 2019 included $66 million of proceeds from the sales
of facilities, long-term investments and other assets compared to
$624 million in the first half of 2018.
Net cash used in financing activities was $153 million in the
first half of 2019 compared to $894 million used in the first half
of 2018 when the Company invested $630 million in cash to increase
its ownership in USPI from 80% to 95%.
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 $18.0 billion to $18.4 billion,
- Net income from continuing operations available to Tenet common
shareholders of $16 million to $116 million,
- Adjusted EBITDA of $2.650 billion to $2.750 billion,
- Net cash provided by operating activities of $1.070 billion to
$1.375 billion,
- Adjusted Free Cash Flow of $600 million to $800 million,
- Diluted earnings per share from continuing operations of $0.15
to $1.09, and
- Adjusted diluted earnings per share from continuing operations
of $2.08 to $2.59.
The Outlook for 2019 assumes California Provider Fee revenues of
approximately $260 million, equity in earnings of unconsolidated
affiliates of $180 million to $190 million, depreciation and
amortization expense of $820 million to $840 million, interest
expense of $985 million to $995 million, net income available to
noncontrolling interests of $410 million to $430 million and an
average diluted share count of 106 million.
The Company’s Outlook for the third quarter of 2019
includes:
- Revenue of $4.300 billion to $4.600 billion,
- Net income available (loss attributable) from continuing
operations to Tenet common shareholders ranging from a loss of
$(16) million to income of $21 million,
- Adjusted EBITDA of $600 million to $650 million,
- Diluted earnings (loss) per share from continuing operations
ranging from a loss of $(0.15) per share to earnings of $0.20 per
share, and
- Adjusted diluted earnings per share from continuing operations
ranging from $0.23 to $0.48.
The Outlook for the third quarter assumes California Provider
Fee revenues of approximately $65 million, equity in earnings of
unconsolidated affiliates of $40 million to $45 million,
depreciation and amortization expense of $200 million to $210
million, interest expense of $240 million to $250 million, net
income available to noncontrolling interests of $95 million to $105
million, and an average diluted share count of 106 million.
Additional details on Tenet’s Outlook for both the third 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
Second Quarter Results
Tenet management will discuss the Company’s second quarter 2019
results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00
a.m. Central Time) on August 6, 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 June 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 (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 (NYSE: THC) is a national
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 outpatient facilities. 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. At the
center of everything we do is a commitment to deliver the right
care, in the right place, at the right time, and to continually
improve and advance the healthcare delivery system in the markets
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 June
30,
2019
%
2018
%
Change
Net operating revenues
$
4,560
100.0
%
$
4,506
100.0
%
1.2
%
Equity in earnings of unconsolidated
affiliates
42
0.9
%
39
0.9
%
7.7
%
Operating expenses:
Salaries, wages and benefits
2,148
47.1
%
2,135
47.4
%
0.6
%
Supplies
753
16.5
%
748
16.6
%
0.7
%
Other operating expenses, net
1,044
22.9
%
1,027
22.8
%
1.7
%
Electronic health record incentives
—
—
%
—
—
%
—
%
Depreciation and amortization
214
4.7
%
194
4.3
%
Impairment and restructuring charges, and
acquisition-related costs
36
0.8
%
30
0.7
%
Litigation and investigation costs
18
0.4
%
13
0.3
%
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
1
—
%
(8
)
(0.2
)%
Operating income
388
8.5
%
406
9.0
%
Interest expense
(247
)
(254
)
Other non-operating expense, net
(1
)
(1
)
Loss from early extinguishment of debt
—
(1
)
Income from continuing operations,
before income taxes
140
150
Income tax expense
(30
)
(44
)
Income from continuing operations,
before discontinued operations
110
106
Discontinued operations:
Income from operations
2
2
Income tax expense
—
—
Income from discontinued
operations
2
2
Net income
112
108
Less: Net income available to
noncontrolling interests
95
82
Net income available to Tenet
Healthcare Corporation common shareholders
$
17
$
26
Amounts available to Tenet Healthcare
Corporation common shareholders
Income from continuing operations, net of
tax
$
15
$
24
Income from discontinued operations, net
of tax
2
2
Net income available to Tenet
Healthcare Corporation common shareholders
$
17
$
26
Earnings per share available to Tenet
Healthcare Corporation common shareholders:
Basic
Continuing operations
$
0.15
$
0.23
Discontinued operations
0.02
0.02
$
0.17
$
0.25
Diluted
Continuing operations
$
0.14
$
0.23
Discontinued operations
0.02
0.02
$
0.16
$
0.25
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
103,198
102,147
Diluted*
104,629
104,177
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in millions except per share
amounts)
Six Months Ended June
30,
2019
%
2018
%
Change
Net operating revenues
$
9,105
100.0
%
$
9,205
100.0
%
(1.1
)%
Equity in earnings of unconsolidated
affiliates
76
0.8
%
64
0.7
%
18.8
%
Operating expenses:
Salaries, wages and benefits
4,301
47.3
%
4,362
47.5
%
(1.4
)%
Supplies
1,494
16.4
%
1,522
16.5
%
(1.8
)%
Other operating expenses, net
2,118
23.3
%
2,087
22.7
%
1.5
%
Electronic health record incentives
(1
)
—
%
(1
)
—
%
—
%
Depreciation and amortization
422
4.6
%
398
4.3
%
Impairment and restructuring charges, and
acquisition-related costs
55
0.6
%
77
0.8
%
Litigation and investigation costs
31
0.3
%
19
0.2
%
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
2
—
%
(118
)
(1.3
)%
Operating income
759
8.3
%
923
10.0
%
Interest expense
(498
)
(509
)
Other non-operating expense, net
—
(2
)
Loss from early extinguishment of debt
(47
)
(2
)
Income from continuing operations,
before income taxes
214
410
Income tax expense
(47
)
(114
)
Income from continuing operations,
before discontinued operations
167
296
Discontinued operations:
Income from operations
12
3
Income tax expense
(2
)
—
Income from discontinued
operations
10
3
Net income
177
299
Less: Net income available to
noncontrolling interests
179
174
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(2
)
$
125
Amounts available (attributable) to
Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations,
net of tax
$
(12
)
$
122
Income from discontinued operations, net
of tax
10
3
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(2
)
$
125
Earnings (loss) per share available
(attributable) to Tenet Healthcare Corporation common
shareholders:
Basic
Continuing operations
$
(0.12
)
$
1.20
Discontinued operations
0.10
0.03
$
(0.02
)
$
1.23
Diluted
Continuing operations
$
(0.12
)
$
1.18
Discontinued operations
0.10
0.03
$
(0.02
)
$
1.21
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
102,993
101,770
Diluted*
102,993
103,416
*
Had we generated income from continuing
operations available to common shareholders in the six months ended
June 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 1,592 thousand
shares.
TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30,
December 31,
(Dollars in millions)
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
249
$
411
Accounts receivable
2,734
2,595
Inventories of supplies, at cost
309
305
Income tax receivable
19
21
Assets held for sale
—
107
Other current assets
1,393
1,197
Total current assets
4,704
4,636
Investments and other assets
2,297
1,456
Deferred income taxes
268
312
Property and equipment, at cost, less
accumulated depreciation and amortization
6,995
6,993
Goodwill
7,298
7,281
Other intangible assets, at cost, less
accumulated amortization
1,645
1,731
Total assets
$
23,207
$
22,409
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
664
$
182
Accounts payable
1,088
1,207
Accrued compensation and benefits
720
838
Professional and general liability
reserves
228
216
Accrued interest payable
233
240
Liabilities held for sale
—
43
Other current liabilities
1,217
1,131
Total current liabilities
4,150
3,857
Long-term debt, net of current portion
14,312
14,644
Professional and general liability
reserves
669
666
Defined benefit plan obligations
507
521
Deferred income taxes
36
36
Other long-term liabilities
1,354
578
Total liabilities
21,028
20,302
Commitments and contingencies
Redeemable noncontrolling interests in
equity of consolidated subsidiaries
1,462
1,420
Equity:
Shareholders’ equity:
Common stock
7
7
Additional paid-in capital
4,755
4,747
Accumulated other comprehensive loss
(219
)
(223
)
Accumulated deficit
(2,237
)
(2,236
)
Common stock in treasury, at cost
(2,414
)
(2,414
)
Total shareholders’ deficit
(108
)
(119
)
Noncontrolling interests
825
806
Total equity
717
687
Total liabilities and equity
$
23,207
$
22,409
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
Six Months Ended
(Dollars in millions)
June 30,
2019
2018
Net income
$
177
$
299
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization
422
398
Deferred income tax expense
42
108
Stock-based compensation expense
23
20
Impairment and restructuring charges, and
acquisition-related costs
55
77
Litigation and investigation costs
31
19
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
2
(118
)
Loss from early extinguishment of debt
47
2
Equity in earnings of unconsolidated
affiliates, net of distributions received
(2
)
10
Amortization of debt discount and debt
issuance costs
21
22
Pre-tax income from discontinued
operations
(12
)
(3
)
Other items, net
(10
)
(1
)
Changes in cash from operating assets
and liabilities:
Accounts receivable
(138
)
(13
)
Inventories and other current assets
(64
)
144
Income taxes
(2
)
(18
)
Accounts payable, accrued expenses and
other current liabilities
(217
)
(371
)
Other long-term liabilities
4
(48
)
Payments for restructuring charges,
acquisition-related costs, and litigation costs and
settlements
(80
)
(63
)
Net cash used in operating activities
from discontinued operations, excluding income taxes
(5
)
(3
)
Net cash provided by operating
activities
294
461
Cash flows from investing
activities:
Purchases of property and equipment —
continuing operations
(336
)
(268
)
Purchases of businesses or joint venture
interests, net of cash acquired
(13
)
(89
)
Proceeds from sales of facilities and
other assets — continuing operations
40
481
Proceeds from sales of facilities and
other assets — discontinued operations
17
—
Proceeds from sales of marketable
securities, long-term investments and other assets
9
143
Purchases of equity investments
(9
)
(37
)
Other long-term assets
(4
)
3
Other items, net
(7
)
(8
)
Net cash provided by (used in)
investing activities
(303
)
225
Cash flows from financing
activities:
Repayments of borrowings under credit
facility
(1,095
)
(360
)
Proceeds from borrowings under credit
facility
1,285
360
Repayments of other borrowings
(1,668
)
(161
)
Proceeds from other borrowings
1,516
14
Debt issuance costs
(18
)
—
Distributions paid to noncontrolling
interests
(144
)
(140
)
Proceeds from sales of noncontrolling
interests
9
7
Purchases of noncontrolling interests
(6
)
(642
)
Proceeds from exercise of stock options
and employee stock purchase plan
3
14
Other items, net
(35
)
14
Net cash used in financing
activities
(153
)
(894
)
Net decrease in cash and cash
equivalents
(162
)
(208
)
Cash and cash equivalents at beginning of
period
411
611
Cash and cash equivalents at end of
period
$
249
$
403
Supplemental disclosures:
Interest paid, net of capitalized
interest
$
(484
)
$
(501
)
Income tax payments, net
$
(13
)
$
(21
)
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING
TOTAL HOSPITALS(1)
(Unaudited)
(Dollars in millions except per adjusted
patient day
Three Months Ended June
30,
Six Months Ended June
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
169,352
168,453
0.5
%
344,078
350,759
(1.9
)%
Adjusted patient admissions
304,066
306,063
(0.7
)%
612,199
626,931
(2.3
)%
Paying admissions (excludes charity and
uninsured)
159,128
158,216
0.6
%
323,921
330,706
(2.1
)%
Charity and uninsured admissions
10,224
10,237
(0.1
)%
20,157
20,053
0.5
%
Admissions through emergency
department
121,088
115,036
5.3
%
247,167
240,112
2.9
%
Paying admissions as a percentage of total
admissions
94.0
%
93.9
%
0.1
%
*
94.1
%
94.3
%
(0.2
)%
*
Charity and uninsured admissions as a
percentage of total admissions
6.0
%
6.1
%
(0.1
)%
*
5.9
%
5.7
%
0.2
%
*
Emergency department admissions as a
percentage of total admissions
71.5
%
68.3
%
3.2
%
*
71.8
%
68.5
%
3.3
%
*
Surgeries — inpatient
44,641
46,274
(3.5
)%
89,436
93,497
(4.3
)%
Surgeries — outpatient
60,936
63,805
(4.5
)%
119,154
126,813
(6.0
)%
Total surgeries
105,577
110,079
(4.1
)%
208,590
220,310
(5.3
)%
Patient days — total
787,582
766,519
2.7
%
1,609,661
1,625,167
(1.0
)%
Adjusted patient days
1,387,929
1,373,480
1.1
%
2,808,099
2,859,619
(1.8
)%
Average length of stay (days)
4.65
4.55
2.2
%
4.68
4.63
1.1
%
Licensed beds (at end of period)
17,221
18,314
(6.0
)%
17,221
18,314
(6.0
)%
Average licensed beds
17,221
18,362
(6.2
)%
17,338
18,523
(6.4
)%
Utilization of licensed beds
50.3
%
45.9
%
4.4
%
*
51.3
%
48.5
%
2.8
%
*
Outpatient Visits
Total visits
1,693,805
1,749,847
(3.2
)%
3,408,197
3,592,386
(5.1
)%
Paying visits (excludes charity and
uninsured)
1,581,530
1,633,372
(3.2
)%
3,185,242
3,359,348
(5.2
)%
Charity and uninsured visits
112,275
116,475
(3.6
)%
222,955
233,038
(4.3
)%
Emergency department visits
637,107
643,036
(0.9
)%
1,294,556
1,340,037
(3.4
)%
Paying visits as a percentage of total
visits
93.4
%
93.3
%
0.1
%
*
93.5
%
93.5
%
—
%
*
Charity and uninsured visits as a
percentage of total visits
6.6
%
6.7
%
(0.1
)%
*
6.5
%
6.5
%
—
%
*
Total emergency department admissions and
visits
758,195
758,072
—
%
1,541,723
1,580,149
(2.4
)%
Revenues
Net patient service revenues(3)
$
3,547
$
3,443
3.0
%
$
7,129
$
7,086
0.6
%
Revenues on a Per Adjusted Patient
Admission and Per Adjusted Patient Day
Net patient service revenue(3) per
adjusted patient admission
$
11,665
$
11,249
3.7
%
$
11,645
$
11,303
3.0
%
Net patient service revenue(3) per
adjusted patient day
$
2,556
$
2,507
2.0
%
$
2,539
$
2,478
2.5
%
Total selected operating expenses
(salaries, wages and benefits, supplies and other operating
expenses) per adjusted patient admission(2)
$
10,988
$
10,619
3.5
%
$
10,983
$
10,590
3.7
%
Net patient service revenues(3)
from:
Medicare
20.3
%
20.4
%
(0.1
)%
*
20.7
%
20.9
%
(0.2
)%
*
Medicaid
8.9
%
9.1
%
(0.2
)%
*
8.9
%
9.0
%
(0.1
)%
*
Managed care
65.7
%
66.0
%
(0.3
)%
*
65.7
%
65.5
%
0.2
%
*
Uninsured
0.3
%
0.2
%
0.1
%
*
0.2
%
0.6
%
(0.4
)%
*
Indemnity and other
4.8
%
4.3
%
0.5
%
*
4.5
%
4.0
%
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 June
30,
Six Months Ended June
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
169,352
163,903
3.3
%
342,822
337,587
1.6
%
Adjusted patient admissions
304,066
297,460
2.2
%
609,937
601,605
1.4
%
Paying admissions (excludes charity and
uninsured)
159,129
153,816
3.5
%
322,761
318,055
1.5
%
Charity and uninsured admissions
10,223
10,087
1.3
%
20,061
19,532
2.7
%
Admissions through emergency
department
121,088
111,902
8.2
%
246,316
231,859
6.2
%
Paying admissions as a percentage of total
admissions
94.0
%
93.8
%
0.2
%
94.1
%
94.2
%
(0.1
)%
*
Charity and uninsured admissions as a
percentage of total admissions
6.0
%
6.2
%
(0.2
)%
5.9
%
5.8
%
0.1
%
*
Emergency department admissions as a
percentage of total admissions
71.5
%
68.3
%
3.2
%
71.8
%
68.7
%
3.1
%
*
Surgeries — inpatient
44,641
45,191
(1.2
)%
89,194
90,243
(1.2
)%
Surgeries — outpatient
60,936
62,205
(2.0
)%
118,832
121,925
(2.5
)%
Total surgeries
105,577
107,396
(1.7
)%
208,026
212,168
(2.0
)%
Patient days — total
787,582
743,442
5.9
%
1,602,911
1,560,442
2.7
%
Adjusted patient days
1,387,929
1,329,915
4.4
%
2,795,982
2,735,483
2.2
%
Average length of stay (days)
4.65
4.54
2.4
%
4.68
4.62
1.3
%
Licensed beds (at end of period)
17,221
17,246
(0.1
)%
17,221
17,246
(0.1
)%
Average licensed beds
17,221
17,246
(0.1
)%
17,221
17,246
(0.1
)%
Utilization of licensed beds
50.3
%
47.4
%
2.9
%
51.4
%
50.0
%
1.4
%
*
Outpatient Visits
Total visits
1,693,805
1,673,056
1.2
%
3,380,669
3,389,952
(0.3
)%
Paying visits (excludes charity and
uninsured)
1,581,555
1,560,950
1.3
%
3,159,190
3,168,144
(0.3
)%
Charity and uninsured visits
112,250
112,106
0.1
%
221,479
221,808
(0.1
)%
Emergency department visits
637,107
622,898
2.3
%
1,288,959
1,286,620
0.2
%
Paying visits as a percentage of total
visits
93.4
%
93.3
%
0.1
%
93.4
%
93.5
%
(0.1
)%
*
Charity and uninsured visits as a
percentage of total visits
6.6
%
6.7
%
(0.1
)%
6.6
%
6.5
%
0.1
%
*
Total emergency department admissions and
visits
758,195
734,800
3.2
%
1,535,275
1,518,479
2.8
%
Revenues
Net patient service revenues(2)
$
3,547
$
3,357
5.7
%
$
7,104
$
6,850
3.7
%
Revenues on a Per Adjusted Patient
Admission and Per Adjusted Patient Day
Net patient service revenue(2) per
adjusted patient admission
$
11,665
$
11,286
3.4
%
$
11,647
$
11,386
2.3
%
Net patient service revenue(2) per
adjusted patient day
$
2,556
$
2,524
1.3
%
$
2,541
$
2,504
1.5
%
Net patient service revenues(2)
from:
Medicare
20.3
%
20.1
%
0.2
%
20.6
%
20.5
%
0.1
%
*
Medicaid
8.9
%
8.9
%
—
%
8.9
%
8.8
%
0.1
%
*
Managed care
65.7
%
66.4
%
(0.7
)%
65.8
%
65.8
%
—
%
*
Uninsured
0.3
%
0.2
%
0.1
%
0.2
%
0.8
%
(0.6
)%
*
Indemnity and other
4.8
%
4.4
%
0.4
%
4.5
%
4.1
%
0.4
%
*
(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 six months ended June 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
Six Months Ended
3/31/2019
6/30/2019
6/30/2019
Net operating
revenues
$
4,545
$
4,560
$
9,105
Equity in earnings of unconsolidated
affiliates
34
42
76
Operating expenses:
Salaries, wages and benefits
2,153
2,148
4,301
Supplies
741
753
1,494
Other operating expenses, net
1,074
1,044
2,118
Electronic health record incentives
(1
)
—
(1
)
Depreciation and amortization
208
214
422
Impairment and restructuring charges, and
acquisition-related costs
19
36
55
Litigation and investigation costs
13
18
31
Net losses on sales, consolidation and
deconsolidation of facilities
1
1
2
Operating income
371
388
759
Interest expense
(251
)
(247
)
(498
)
Other non-operating income (expense),
net
1
(1
)
—
Loss from early extinguishment of debt
(47
)
—
(47
)
Income from continuing operations,
before income taxes
74
140
214
Income tax expense
(17
)
(30
)
(47
)
Income from continuing operations,
before discontinued operations
57
110
167
Discontinued operations:
Income from operations
10
2
12
Income tax expense
(2
)
—
(2
)
Income from discontinued
operations
8
2
10
Net income
65
112
177
Less: Net income available to
noncontrolling interests
84
95
179
Net income available (loss
attributable) to Tenet Healthcare Corporation
common shareholders
$
(19
)
$
17
$
(2
)
Amounts available (attributable) to
Tenet Healthcare Corporation
common shareholders
Income (loss) from continuing operations,
net of tax
$
(27
)
$
15
$
(12
)
Income from discontinued operations, net
of tax
8
2
10
Net income available (loss
attributable) to Tenet Healthcare
Corporation common shareholders
$
(19
)
$
17
$
(2
)
Earnings (loss) per share available
(attributable) to Tenet Healthcare
Corporation common
shareholders:
Basic
Continuing operations
$
(0.26
)
$
0.15
$
(0.12
)
Discontinued operations
0.08
0.02
0.10
$
(0.18
)
$
0.17
$
(0.02
)
Diluted
Continuing operations
$
(0.26
)
$
0.14
$
(0.12
)
Discontinued operations
0.08
0.02
0.10
$
(0.18
)
$
0.16
$
(0.02
)
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
102,788
103,198
102,993
Diluted
102,788
104,629
102,993
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
Six Months Ended
3/31/2019
6/30/2019
06/30/2019
Admissions, Patient Days and
Surgeries
Number of hospitals (at end of period)
65
65
65
Total admissions
174,726
169,352
344,078
Adjusted patient admissions
308,133
304,066
612,199
Paying admissions (excludes charity and
uninsured)
164,793
159,128
323,921
Charity and uninsured admissions
9,933
10,224
20,157
Admissions through emergency
department
126,079
121,088
247,167
Paying admissions as a percentage of total
admissions
94.3
%
94.0
%
94.1
%
Charity and uninsured admissions as a
percentage of total admissions
5.7
%
6.0
%
5.9
%
Emergency department admissions as a
percentage of total admissions
72.2
%
71.5
%
71.8
%
Surgeries — inpatient
44,795
44,641
89,436
Surgeries — outpatient
58,218
60,936
119,154
Total surgeries
103,013
105,577
208,590
Patient days — total
822,079
787,582
1,609,661
Adjusted patient days
1,420,170
1,387,929
2,808,099
Average length of stay (days)
4.70
4.65
4.68
Licensed beds (at end of period)
17,221
17,221
17,221
Average licensed beds
17,455
17,221
17,338
Utilization of licensed beds
52.3
%
50.3
%
51.3
%
Outpatient Visits
Total visits
1,714,392
1,693,805
3,408,197
Paying visits (excludes charity and
uninsured)
1,603,712
1,581,530
3,185,242
Charity and uninsured visits
110,680
112,275
222,955
Emergency department visits
657,449
637,107
1,294,556
Paying visits as a percentage of total
visits
93.5
%
93.4
%
93.5
%
Charity and uninsured visits as a
percentage of total visits
6.5
%
6.6
%
6.5
%
Total emergency department admissions and
visits
783,528
758,195
1,541,723
Revenues
Net patient service revenues(3)
$
3,582
$
3,547
$
7,129
Revenues on a Per Adjusted Patient
Admission and Per Adjusted Patient Day
Net patient service revenue(3) per
adjusted patient admission
$
11,625
$
11,665
$
11,645
Net patient service revenue(3) per
adjusted patient day
$
2,522
$
2,556
$
2,539
Total selected operating expenses
(salaries, wages and benefits, supplies and other operating
expenses) per adjusted patient admission(2)
$
10,979
$
10,988
$
10,983
Net patient service revenues(3)
from:
Medicare
21.2
%
20.3
%
20.7
%
Medicaid
8.8
%
8.9
%
8.9
%
Managed care
65.7
%
65.7
%
65.7
%
Uninsured
—
%
0.3
%
0.2
%
Indemnity and other
4.3
%
4.8
%
4.5
%
(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.
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 on a Per Adjusted Patient
Admission and Per Adjusted Patient Day
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
Six Months Ended
3/31/2019
6/30/2019
6/30/2019
Admissions, Patient Days and
Surgeries
Number of hospitals (at end of period)
65
65
65
Total admissions
173,470
169,352
342,822
Adjusted patient admissions
305,871
304,066
609,937
Paying admissions (excludes charity and
uninsured)
163,632
159,129
322,761
Charity and uninsured admissions
9,838
10,223
20,061
Admissions through emergency
department
125,228
121,088
246,316
Paying admissions as a percentage of total
admissions
94.3
%
94.0
%
94.1
%
Charity and uninsured admissions as a
percentage of total admissions
5.7
%
6.0
%
5.9
%
Emergency department admissions as a
percentage of total admissions
72.2
%
71.5
%
71.8
%
Surgeries — inpatient
44,553
44,641
89,194
Surgeries — outpatient
57,896
60,936
118,832
Total surgeries
102,449
105,577
208,026
Patient days — total
815,329
787,582
1,602,911
Adjusted patient days
1,408,053
1,387,929
2,795,982
Average length of stay (days)
4.70
4.65
4.68
Licensed beds (at end of period)
17,221
17,221
17,221
Average licensed beds
17,221
17,221
17,221
Utilization of licensed beds
52.6
%
50.3
%
51.4
%
Outpatient Visits
Total visits
1,686,864
1,693,805
3,380,669
Paying visits (excludes charity and
uninsured)
1,577,635
1,581,555
3,159,190
Charity and uninsured visits
109,229
112,250
221,479
Emergency department visits
651,852
637,107
1,288,959
Paying visits as a percentage of total
visits
93.5
%
93.4
%
93.4
%
Charity and uninsured visits as a
percentage of total visits
6.5
%
6.6
%
6.6
%
Total emergency department admissions and
visits
777,080
758,195
1,535,275
Revenues
Net patient service revenues(2)
$
3,557
$
3,547
$
7,104
Revenues on a Per Adjusted Patient
Admission and Per Adjusted Patient Day
Net patient service revenue(2) per
adjusted patient admission
$
11,629
$
11,665
$
11,647
Net patient service revenue(2) per
adjusted patient day
$
2,526
$
2,556
$
2,541
Net patient service revenues(2)
from:
Medicare
21.0
%
20.3
%
20.6
%
Medicaid
8.8
%
8.9
%
8.9
%
Managed care
65.9
%
65.7
%
65.8
%
Uninsured
—
%
0.3
%
0.2
%
Indemnity and other
4.3
%
4.8
%
4.5
%
(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 six months ended June 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 on a Per Adjusted Patient
Admission and Per Adjusted Patient Day
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 six months ended June 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)
June 30,
December 31,
2019
2018
Assets
Hospital Operations and other
$
16,072
$
15,684
Ambulatory Care
6,057
5,711
Conifer
1,078
1,014
Total
$
23,207
$
22,409
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Capital expenditures:
Hospital Operations and other
$
118
$
108
$
288
$
228
Ambulatory Care
21
13
41
28
Conifer
5
4
7
12
Total
$
144
$
125
$
336
$
268
Net operating revenues:
Hospital Operations and other total prior
to inter-segment eliminations(1)
$
3,827
$
3,733
$
7,689
$
7,680
Ambulatory Care
524
531
1,004
1,029
Conifer
Tenet
146
144
292
294
Other customers
209
242
412
496
Total Conifer revenues
355
386
704
790
Inter-segment eliminations
(146
)
(144
)
(292
)
(294
)
Total
$
4,560
$
4,506
$
9,105
$
9,205
Equity in earnings of unconsolidated
affiliates:
Hospital Operations and other
$
8
$
6
$
11
$
4
Ambulatory Care
34
33
65
60
Total
$
42
$
39
$
76
$
64
Adjusted EBITDA:
Hospital Operations and other(2)
$
347
$
345
$
684
$
747
Ambulatory Care
207
198
384
363
Conifer
103
91
202
189
Total
$
657
$
634
$
1,270
$
1,299
Depreciation and amortization:
Hospital Operations and other
$
185
$
164
$
364
$
339
Ambulatory Care
18
17
36
34
Conifer
11
13
22
25
Total
$
214
$
194
$
422
$
398
(1)
Hospital Operations and other revenues
includes health plan revenues of approximately $1 million for both
the three and six months ended June 30, 2019, and less than $1
million and $6 million for the three and six months ended June 30,
2018, respectively.
(2)
Hospital Operations and other Adjusted
EBITDA excludes health plan EBITDA of less than $1 million and $(1)
million for the three and six months ended June 30, 2019,
respectively, and $1 million and less than $1 million for the three
and six months ended June 30, 2018, respectively.
TENET HEALTHCARE CORPORATION
STATEMENTS OF OPERATIONS –
AMBULATORY CARE SEGMENT
(Unaudited)
(Dollars in millions)
Three Months Ended June
30,
2019
2018
Ambulatory Care as Reported
Under GAAP
Unconsolidated
Affiliates
Ambulatory Care as Reported
Under GAAP
Unconsolidated
Affiliates
Net operating revenues(1)
$
524
$
619
$
531
$
547
Equity in earnings of unconsolidated
affiliates(2)
34
—
33
—
Operating expenses:
Salaries, wages and benefits
157
156
165
134
Supplies
108
161
106
144
Other operating expenses, net
86
131
95
114
Depreciation and amortization
18
22
17
17
Impairment and restructuring charges, and
acquisition-related costs
2
—
6
—
Net losses on sales, consolidation and
deconsolidation of facilities
2
—
—
—
Operating income
185
149
175
138
Interest expense
(32
)
(6
)
(37
)
(5
)
Other
3
—
1
1
Net income from continuing operations,
before income taxes
156
143
139
134
Income tax expense
(20
)
(2
)
(18
)
(2
)
Net income
136
$
141
121
$
132
Less: Net income available to
noncontrolling interests
78
75
Net income available to Tenet
Healthcare Corporation common shareholders
$
58
$
46
Equity in earnings of unconsolidated
affiliates
$
34
$
33
(1)
On a same-facility system-wide basis, net
revenue in Tenet’s Ambulatory Care segment increased 5.3% during
the three months ended June 30, 2019, with cases increasing 3.2%
and revenue per case increasing 2.0%.
(2)
At June 30, 2019, 112 of the 344
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 232 facilities and account for these investments as
consolidated subsidiaries.
TENET HEALTHCARE CORPORATION
STATEMENTS OF OPERATIONS –
AMBULATORY CARE SEGMENT
(Unaudited)
(Dollars in millions)
Six Months Ended June
30,
2019
2018
Ambulatory Care as Reported
Under GAAP
Unconsolidated
Affiliates
Ambulatory Care as Reported
Under GAAP
Unconsolidated
Affiliates
Net operating revenues(1)
$
1,004
$
1,187
$
1,029
$
1,040
Equity in earnings of unconsolidated
affiliates(2)
65
—
60
—
Operating expenses:
Salaries, wages and benefits
310
303
327
254
Supplies
207
310
212
274
Other operating expenses, net
168
257
187
219
Depreciation and amortization
36
42
34
33
Impairment and restructuring charges, and
acquisition-related costs
5
—
7
—
Net gains on sales, consolidation and
deconsolidation of facilities
(3
)
(26
)
(1
)
—
Operating income
346
301
323
260
Interest expense
(63
)
(13
)
(73
)
(10
)
Other
6
6
3
1
Net income from continuing operations,
before income taxes
289
294
253
251
Income tax expense
(35
)
(4
)
(33
)
(4
)
Net income
254
$
290
220
$
247
Less: Net income available to
noncontrolling interests
146
139
Net income available to Tenet
Healthcare Corporation common shareholders
$
108
$
81
Equity in earnings of unconsolidated
affiliates
$
65
$
60
(1)
On a same-facility system-wide basis, net
revenue in Tenet’s Ambulatory Care segment increased 4.8% during
the six months ended June 30, 2019, with cases increasing 2.1% and
revenue per case increasing 2.7%.
(2)
At June 30, 2019, 112 of the 344
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 232 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
YTD
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(19
)
$
17
$
(2
)
Less: Net income available to
noncontrolling interests
(84
)
(95
)
(179
)
Income from discontinued operations, net
of tax
8
2
10
Income from continuing operations
57
110
167
Income tax expense
(17
)
(30
)
(47
)
Loss from early extinguishment of debt
(47
)
—
(47
)
Other non-operating income (expense),
net
1
(1
)
—
Interest expense
(251
)
(247
)
(498
)
Operating income
371
388
759
Litigation and investigation costs
(13
)
(18
)
(31
)
Net losses on sales, consolidation and
deconsolidation of facilities
(1
)
(1
)
(2
)
Impairment and restructuring charges, and
acquisition-related costs
(19
)
(36
)
(55
)
Depreciation and amortization
(208
)
(214
)
(422
)
Income (loss) from divested and closed
businesses
(1
)
—
(1
)
Adjusted EBITDA
$
613
$
657
$
1,270
Net operating revenues
$
4,545
$
4,560
$
9,105
Less: Net operating revenues from health
plans
—
1
1
Adjusted net operating revenues
$
4,545
$
4,559
$
9,104
Net income available (loss
attributable) to Tenet Healthcare Corporation common shareholders
as a % of net operating revenues
(0.4
)%
0.4
%
—
%
Adjusted EBITDA as a % of adjusted net
operating revenues (Adjusted EBITDA margin)
13.5
%
14.4
%
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
YTD
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(19
)
$
17
$
(2
)
Net income from discontinued
operations
8
$
2
10
Net income (loss) from continuing
operations
(27
)
15
(12
)
Less: Impairment and restructuring
charges, and acquisition-related costs
(19
)
(36
)
(55
)
Litigation and investigation costs
(13
)
(18
)
(31
)
Net losses on sales, consolidation and
deconsolidation of facilities
(1
)
(1
)
(2
)
Loss from early extinguishment of debt
(47
)
—
(47
)
Income (loss) from divested and closed
businesses
(1
)
—
(1
)
Tax impact of above items
(2
)
11
9
Adjusted net income available from
continuing operations to common shareholders
$
56
$
59
$
115
Diluted earnings (loss) per share from
continuing operations
$
(0.26
)
$
0.14
$
(0.12
)
Less: Impairment and restructuring
charges, and acquisition-related costs
(0.18
)
(0.35
)
(0.53
)
Litigation and investigation costs
(0.12
)
(0.17
)
(0.30
)
Net losses on sales, consolidation and
deconsolidation of facilities
(0.01
)
(0.01
)
(0.02
)
Loss from early extinguishment of debt
(0.45
)
—
(0.45
)
Income (loss) from divested and closed
businesses
(0.01
)
—
(0.01
)
Tax impact of above items
(0.02
)
0.11
0.09
Adjusted diluted earnings per share
from continuing operations
$
0.54
$
0.56
$
1.10
Weighted average basic shares
outstanding (in thousands)
102,788
103,198
102,993
Weighted average dilutive shares
outstanding (in thousands)
104,541
104,629
104,585
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
YTD
Net cash provided by operating
activities
$
10
$
284
$
294
Purchases of property and equipment
(192
)
(144
)
(336
)
Free cash flow
$
(182
)
$
140
$
(42
)
Net cash used in investing
activities
$
(139
)
$
(164
)
$
(303
)
Net cash used in financing
activities
$
(30
)
$
(123
)
$
(153
)
Net cash provided by operating
activities
$
10
$
284
$
294
Less: Payments for restructuring charges,
acquisition-related costs, and litigation costs and settlements
(32
)
(48
)
(80
)
Net cash used in operating activities from
discontinued operations
(2
)
(3
)
(5
)
Adjusted net cash provided by operating
activities from continuing operations
44
335
379
Purchases of property and equipment
(192
)
(144
)
(336
)
Adjusted free cash flow – continuing
operations
$
(148
)
$
191
$
43
(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)
Q3 2019
2019
Low
High
Low
High
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(21
)
$
21
$
16
$
121
Less: Net income available to
noncontrolling interests
(95
)
(105
)
(410
)
(430
)
Net income (loss) from discontinued
operations, net of tax
(5
)
—
—
5
Income tax expense
(21
)
(34
)
(165
)
(185
)
Interest expense
(250
)
(240
)
(995
)
(985
)
Loss from early extinguishment of
debt(1)
—
—
(47
)
(47
)
Other non-operating expense, net
—
(5
)
(10
)
(15
)
Net losses on sales, consolidation and
deconsolidation of facilities(1)
—
—
(2
)
(2
)
Impairment and restructuring charges,
acquisition-related costs, and litigation costs and
settlements(2)
(45
)
(35
)
(175
)
(125
)
Depreciation and amortization
(200
)
(210
)
(820
)
(840
)
Loss from divested and closed
businesses
(5
)
—
(10
)
(5
)
Adjusted EBITDA
$
600
$
650
$
2,650
$
2,750
Income (loss) from continuing
operations
$
(16
)
$
21
$
16
$
116
Net operating revenues
$
4,300
$
4,600
$
18,000
$
18,400
Income (loss) from continuing
operations as a % of operating revenues
(0.4
)%
0.5
%
0.1
%
0.6
%
Adjusted EBITDA as a % of net operating
revenues (Adjusted EBITDA margin)
14.0
%
14.1
%
14.7
%
14.9
%
(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)
Q3 2019
2019
Low
High
Low
High
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(21
)
$
21
$
16
$
121
Net income (loss) from discontinued
operations, net of tax
(5
)
—
—
5
Net income (loss) from continuing
operations
(16
)
21
16
116
Less: Impairment and restructuring
charges, acquisition-related costs, and litigation costs and
settlements
(45
)
(35
)
(175
)
(125
)
Net losses on sales, consolidation and
deconsolidation of facilities
—
—
(2
)
(2
)
Loss from early extinguishment of debt
—
—
(47
)
(47
)
Loss from divested and closed
businesses
(5
)
—
(10
)
(5
)
Tax impact of above items
10
5
30
20
Adjusted net income available from
continuing operations to common shareholders
$
24
$
51
$
220
$
275
Diluted earnings (loss) per share from
continuing operations
$
(0.15
)
$
0.20
$
0.15
$
1.09
Less: Impairment and restructuring
charges, acquisition-related costs, and litigation costs and
settlements
(0.42
)
(0.33
)
(1.65
)
(1.18
)
Net losses on sales, consolidation and
deconsolidation of facilities
—
—
(0.02
)
(0.02
)
Loss from early extinguishment of debt
—
—
(0.44
)
(0.44
)
Loss from divested and closed
businesses
(0.05
)
—
(0.09
)
(0.05
)
Tax impact of above items
0.09
0.05
0.27
0.19
Adjusted diluted earnings per share
from continuing operations
$
0.23
$
0.48
$
2.08
$
2.59
Weighted average basic shares
outstanding (in thousands)
104,000
104,000
104,000
104,000
Weighted average dilutive shares
outstanding (in thousands)
106,000
106,000
106,000
106,000
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
$
1,070
$
1,375
Less: Payments for restructuring charges,
acquisition-related costs and litigation costs and
settlements(1)
(175
)
(125
)
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/20190805005598/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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