DALLAS--(BUSINESS WIRE)--Tenet Healthcare Corporation (NYSE: THC) reported a net loss from continuing operations attributable to Tenet shareholders of $230 million in the fourth quarter of 2017 due to the items mentioned above, compared to a $79 million net loss from continuing operations in the fourth quarter of 2016. Adjusted EBITDA was $840 million in the fourth quarter of 2017 compared to $650 million in the fourth quarter of 2016.
“Our results for the fourth quarter were strong in each of our business segments,” said Ronald A. Rittenmeyer, executive chairman and CEO. “Volume growth returned in our hospital and Ambulatory segments, cost controls were tight, and our financial results at USPI and Conifer were very strong. Our cost control program is off to a great start and, when combined with improved financial performance in the fourth quarter, we are raising our Outlook for Adjusted EBITDA and Adjusted EPS for 2018.”
Hospital Operations and Other Segment
Net operating revenues in the Hospital Operations and other segment was $4.184 billion, up 3.4 percent from $4.046 billion in the fourth quarter of 2016; in order to improve comparability, these revenue figures exclude revenue generated by the Company’s health plans in both periods since the Company is exiting this business.
On a same-hospital basis, patient revenue was $4.126 billion, up 6.1 percent from $3.889 billion in the fourth quarter of 2016, with adjusted admissions up 1.3 percent and revenue per adjusted admission up 4.8 percent. The growth in revenue per adjusted admission was due to a $202 million increase in revenue from the California Provider Fee Program since the 2017 program was not approved until December 2017.
Adjusted EBITDA in Tenet’s hospital segment was $538 million, representing an increase of $143 million or 36.2 percent as compared to $395 million in the fourth quarter of 2016. The $143 million increase in Adjusted EBITDA in the hospital segment was primarily driven by: (i) $202 million increase in California Provider Fee revenue, with $267 million of revenue being under the program in the fourth quarter of 2017 compared to $65 million in the fourth quarter of 2016; (ii) $17 million unfavorable comparison due to the sale of the Company’s hospitals and related assets in Houston, effective August 1, 2017; (iii) $17 million of previously disclosed executive severance in the fourth quarter of 2017; and, (iv) an $8 million decline in electronic health record incentives.
Tenet’s health plan business was breakeven in the fourth quarter of 2017 versus a loss of $29 million on the EBITDA line in the fourth quarter of 2016. 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 segment, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 2.2 percent on a per adjusted admission basis in the fourth quarter of 2017.
Exchanges
Tenet’s same-hospital exchange admissions were 4,857 in the fourth quarter of 2017, up 0.2 percent from the fourth quarter of 2016. Same-hospital exchange outpatient visits were 51,451 in the fourth quarter of 2017, up 15.2 percent from the fourth quarter of 2016.
Uncompensated Care
Tenet’s provision for doubtful accounts was $325 million in the fourth quarter of 2017, representing a ratio of 6.1 percent of revenues before bad debt, as compared to $354 million in the fourth quarter of 2016, or 6.9 percent of revenues before bad debt (excluding health plan revenues from both periods). The decrease in the bad debt ratio was primarily attributable to a $15 million decrease in same-hospital self-pay revenues, revenue growth in our Ambulatory segment, the sale of our Houston hospitals in 2017, and a full year of the California Provider Fee revenue being recorded in the fourth quarter of 2017.
Tenet’s uncompensated care costs, defined as the sum of the provision for doubtful accounts, charity care write-offs and uninsured discounts, were $1.361 billion and $1.332 billion in the fourth quarters of 2017 and 2016, respectively, including $1.036 billion and $978 million, respectively, of charity care write-offs and uninsured discounts that were offered through Tenet’s Compact with Uninsured Patients. Uncompensated care in the fourth quarter of 2017 represented 21.5 percent of revenue before bad debts, uninsured discounts and charity care write-offs, flat versus the fourth quarter of 2016. Nearly all of Tenet’s uncompensated care is associated with the Hospital Operations and other segment.
Uninsured plus charity admissions increased by 317 admissions, or 3.3 percent on a same-hospital basis in the fourth quarter of 2017 compared to the fourth quarter of 2016. Uninsured plus charity outpatient visits increased by 6,237 visits, or 5.6 percent, on a same-hospital basis.
Ambulatory Care Segment
During the fourth quarter of 2017, the Ambulatory segment produced net operating revenues of $545 million, representing an increase of 14.0 percent as compared to $478 million in the fourth quarter of 2016. In addition, the Ambulatory segment generated Adjusted EBITDA of $223 million, up 21.9 percent from $183 million in the fourth quarter of 2016 and Adjusted EBITDA less facility-level noncontrolling interest was $145 million, up 26.1 percent from $115 million in the fourth quarter of 2016.
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 6.9 percent, with cases increasing 4.6 percent and revenue per case increasing 2.2 percent. The number of surgical days was the same in both periods and did not impact the year-over-year growth rates this quarter.
Conifer Segment
During the fourth quarter of 2017, Conifer’s revenue decreased 2.0 percent to $394 million, down from $402 million in the fourth quarter of 2016. Revenue from third party customers was flat at $239 million. Conifer generated $79 million of Adjusted EBITDA in the fourth quarter of 2017, up 9.7 percent from $72 million in the fourth quarter of 2016.
Net Income and Earnings Per Share
Tenet reported a net loss from continuing operations attributable to Tenet shareholders of $230 million, or a loss of $2.28 per diluted share, in the fourth quarter of 2017 compared to a net loss of $79 million, or a loss of $0.79 per diluted share, in the fourth quarter of 2016.
As shown on Table #2, the net loss from continuing operations attributable to Tenet shareholders of approximately $230 million included: (i) a $252 million non-cash partial write-down of the Company’s deferred tax assets due to the reduction in the corporate federal income tax rate from 35 percent to 21 percent; (ii) a $138 million pre-tax impairment and restructuring charge consisting of $73 million from the write-down of assets held for sale in the Chicago-area to their estimated fair value, $42 million of restructuring charges primarily related to employee severance associated with the Company’s cost reduction initiatives, and $23 million of other impairment and restructuring charges; and, (iii) $9 million of other items. These items collectively lowered pre-tax income by approximately $147 million and lowered after-tax income by approximately $350 million. In addition, there was a noncontrolling interest impact of $23 million substantially due to a non-cash reduction in the deferred tax liabilities of the Company’s Ambulatory segment. Collectively, these items lowered diluted earnings per share by approximately $3.68.
After adjusting for the items listed on Table #2, Tenet recorded Adjusted net income from continuing operations attributable to Tenet shareholders of $143 million, or $1.40 per diluted share, during the fourth quarter of 2017, as compared to Adjusted net income from continuing operations attributable to Tenet shareholders of $23 million, or $0.23 per diluted share, in the fourth quarter of 2016.
A reconciliation of GAAP net income (loss) attributable to Tenet shareholders to Adjusted net income (loss) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations attributable to Tenet shareholders is contained in Table #2 at the end of this release.
Cash Flow and Liquidity
Cash and cash equivalents were $611 million at December 31, 2017 compared to $429 million at September 30, 2017. The Company had no outstanding borrowings on its $1 billion credit line as of December 31, 2017. Accounts receivable days outstanding from continuing operations were 55.2 at December 31, 2017 compared to 55.6 at September 30, 2017 and 56.5 at December 31, 2016. The calculation of accounts receivable days outstanding from continuing operations: (i) includes the accounts receivable of the Company’s two hospitals in Philadelphia, the Company’s four hospitals in the Chicago-area, Des Peres Hospital in St. Louis, and the Aspen facilities in the United Kingdom, which have been classified in assets held for sale on the Condensed Consolidated Balance Sheet at December 31, 2017; (ii) excludes revenue from our former hospitals and related assets in Houston, which were divested on August 1, 2017, from the 2016 and 2017 periods; (iii) excludes health plan revenues from the 2016 and 2017 periods; and (iv) excludes California Provider Fee revenues from both 2016 and 2017.
Net cash provided by operating activities in 2017 was $1.200 billion, representing a $642 million increase compared to $558 million in 2016. After subtracting $707 million and $875 million of capital expenditures in 2017 and 2016, respectively, Free Cash Flow was $493 million in 2017, an $810 million improvement compared to an outflow of $317 million in 2016. Adjusted Free Cash Flow was $623 million in 2017, representing a $243 million increase from $380 million in 2016.
Net cash provided by investing activities was $21 million in 2017 compared to $430 million of net cash used in investing activities in 2016. The 2017 period included $827 million of proceeds from the sales of facilities and other assets, primarily from the sale of the Company’s Houston-area hospitals effective August 1, 2017 for net pre-tax proceeds of approximately $750 million; the 2016 period included $573 million of proceeds from the sale of the Company’s hospitals and related outpatient facilities in Georgia.
Net cash used in financing activities was $1.326 billion in 2017 compared to $232 million of net cash provided by financing activities in 2016. The 2017 period included: (i) $729 million related to purchases of noncontrolling interests, primarily the Company’s purchase of an additional 23.7 percent of USPI, which increased Tenet’s ownership interest in the USPI joint venture to 80.0 percent; (ii) the refinancing activities that were completed in the second and third quarters of 2017; and (iii) the redemption of $250 million aggregate principal amount of Tenet’s 8.0 percent senior unsecured notes due 2020 on September 11, 2017.
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:
- Revenue of $17.9 billion to $18.3 billion,
- Net income from continuing operations attributable to Tenet common shareholders of $95 million to $105 million,
- Adjusted EBITDA of $2.500 billion to $2.600 billion,
- Net cash provided by operating activities of $1.245 billion to $1.450 billion,
- Adjusted Free Cash Flow of $675 million to $875 million,
- Diluted earnings per share from continuing operations attributable to Tenet shareholders ranging from $0.92 to $1.02, and
- Adjusted diluted earnings per share from continuing operations attributable to Tenet shareholders of $0.73 to $1.07.
The Company raised the midpoint of its previous 2018 Adjusted EBITDA Outlook range $25 million to reflect: (i) higher expectations for Conifer; (ii) additional Medicaid DSH reimbursement since Medicaid DSH reimbursement cuts have been delayed in both federal fiscal years 2018 and 2019; (iii) greater than previously expected revenue from the California Provider Fee program in 2018; and (iv) a net reduction in estimated EBITDA from to-be-divested facilities in 2018.
The Outlook for 2018 assumes equity in earnings of unconsolidated affiliates of $160 million to $170 million, net income attributable to noncontrolling interests of $415 million to $435 million and an average diluted share count of 103 million.
The Company’s Outlook for the first quarter of 2018 includes:
- Revenue of $4.45 billion to $4.65 billion,
- Net income from continuing operations attributable to Tenet shareholders of $50 million to $70 million,
- Adjusted EBITDA of $580 million to $630 million,
- Earnings per diluted share from continuing operations attributable to Tenet shareholders of $0.49 to $0.69, and
- Adjusted earnings per diluted share from continuing operations attributable to Tenet shareholders ranging from a loss of $0.10 to earnings of $0.05.
The Outlook for the first quarter assumes equity in earnings of unconsolidated affiliates of approximately $30 million to $35 million, net income attributable to noncontrolling interests of $90 million to $100 million, and an average diluted share count of 102 million.
Additional details on Tenet’s Outlook for both the first quarter and calendar year 2018 are available in Tables #4 and #5 at the end of this press release and in an accompanying slide presentation that is accessible through the Company’s website at www.tenethealth.com/investors.
Management’s Webcast Discussion of Fourth Quarter Results
Tenet management will discuss the Company’s fourth quarter 2017 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 27, 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-K report for the twelve months ended December 31, 2017, which will be filed with the Securities and Exchange Commission and posted on the Company’s website before the webcast.
This press release includes certain non-GAAP measures, such as Adjusted EBITDA, Adjusted net income (loss) from continuing operations attributable to Tenet shareholders, Adjusted diluted earnings (loss) per share from continuing operations attributable to Tenet shareholders, Free Cash Flow and Adjusted Free Cash Flow. Reconciliations of these measures to the most comparable GAAP measure are contained in the tables at the end of this release.
Tenet Healthcare Corporation is a diversified healthcare services company with 120,000 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 in the United States and the United Kingdom. Tenet’s Conifer Health Solutions subsidiary provides technology-enabled performance improvement and health management solutions to hospitals, health systems, integrated delivery networks, physician groups, self-insured organizations and health plans. For more information, please visit www.tenethealth.com.
The terms "THC", "Tenet Healthcare Corporation", "the Company", "we", "us" or "our" refer to Tenet Healthcare Corporation or one or more of its subsidiaries or affiliates as applicable.
This release contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “assume,” “anticipate,” “estimate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, but are not limited to, the factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 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.
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TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
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| (Dollars in millions except per share amounts) | Three Months Ended December 31, | ||||||||||||||||
| 2017 | % | 2016 | % | Change | |||||||||||||
| Net operating revenues: | |||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 5,303 | $ | 5,214 | 1.7 | % | |||||||||||
| Less: Provision for doubtful accounts | 325 | 354 | (8.2 | )% | |||||||||||||
| Net operating revenues | 4,978 | 100.0 | % | 4,860 | 100.0 | % | 2.4 | % | |||||||||
| Equity in earnings of unconsolidated affiliates | 49 | 1.0 | % | 46 | 0.9 | % | 6.5 | % | |||||||||
| Operating expenses: | |||||||||||||||||
| Salaries, wages and benefits | 2,284 | 45.9 | % | 2,316 | 47.7 | % | (1.4 | )% | |||||||||
| Supplies | 800 | 16.0 | % | 773 | 15.9 | % | 3.5 | % | |||||||||
| Other operating expenses, net | 1,104 | 22.2 | % | 1,205 | 24.7 | % | (8.4 | )% | |||||||||
| Electronic health record incentives | (1 | ) | — | % | (9 | ) | (0.2 | )% | (88.9 | )% | |||||||
| Depreciation and amortization | 208 | 4.2 | % | 218 | 4.5 | % | |||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 138 | 2.8 | % | 121 | 2.5 | % | |||||||||||
| Litigation and investigation costs | 11 | 0.2 | % | 2 | — | % | |||||||||||
| Gains on sales, consolidation and deconsolidation of facilities | (2 | ) | — | % | 0 | — | % | ||||||||||
| Operating income | 485 | 9.7 | % | 280 | 5.8 | % | |||||||||||
| Interest expense | (253 | ) | (249 | ) | |||||||||||||
| Other non-operating expense, net | (8 | ) | (2 | ) | |||||||||||||
| Loss from early extinguishment of debt | — | — | |||||||||||||||
| Income from continuing operations, before income taxes | 224 | 29 | |||||||||||||||
| Income tax expense | (324 | ) | (6 | ) | |||||||||||||
| Income (loss) from continuing operations, before discontinued operations | (100 | ) | 23 | ||||||||||||||
| Discontinued operations: | |||||||||||||||||
| Income (loss) from operations | 1 | (1 | ) | ||||||||||||||
| Income tax benefit | — | 1 | |||||||||||||||
| Income (loss) from discontinued operations | 1 | — | |||||||||||||||
| Net income (loss) | (99 | ) | 23 | ||||||||||||||
| Less: Net income attributable to noncontrolling interests | 130 | 102 | |||||||||||||||
| Net loss attributable to Tenet Healthcare Corporation common shareholders | $ | (229 | ) | $ | (79 | ) | |||||||||||
| Amounts attributable to Tenet Healthcare Corporation common shareholders | |||||||||||||||||
| Loss from continuing operations, net of tax | $ | (230 | ) | $ | (79 | ) | |||||||||||
| Income (loss) from discontinued operations, net of tax | 1 | — | |||||||||||||||
| Net loss attributable to Tenet Healthcare Corporation common shareholders | $ | (229 | ) | $ | (79 | ) | |||||||||||
| Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders: | |||||||||||||||||
| Basic | |||||||||||||||||
| Continuing operations | $ | (2.28 | ) | $ | (0.79 | ) | |||||||||||
| Discontinued operations | 0.01 | 0.00 | |||||||||||||||
| $ | (2.27 | ) | $ | (0.79 | ) | ||||||||||||
| Diluted | |||||||||||||||||
| Continuing operations | $ | (2.28 | ) | $ | (0.79 | ) | |||||||||||
| Discontinued operations | 0.01 | 0.00 | |||||||||||||||
| $ | (2.27 | ) | $ | (0.79 | ) | ||||||||||||
| Weighted average shares and dilutive securities outstanding (in thousands): | |||||||||||||||||
| Basic | 100,945 | 99,651 | |||||||||||||||
| Diluted* | 100,945 | 99,651 | |||||||||||||||
| * | Had we generated income from continuing operations in the three months ended December 31, 2017 and 2016 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 908 thousand and 1,277 thousand shares, respectively. |
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TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
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| (Dollars in millions except per share amounts) | Years Ended December 31, | ||||||||||||||||
| 2017 | % | 2016 | % | Change | |||||||||||||
| Net operating revenues: | |||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 20,613 | $ | 21,070 | (2.2 | )% | |||||||||||
| Less: Provision for doubtful accounts | 1,434 | 1,449 | (1.0 | )% | |||||||||||||
| Net operating revenues | 19,179 | 100.0 | % | 19,621 | 100.0 | % | (2.3 | )% | |||||||||
| Equity in earnings of unconsolidated affiliates | 144 | 0.8 | % | 131 | 0.7 | % | 9.9 | % | |||||||||
| Operating expenses: | |||||||||||||||||
| Salaries, wages and benefits | 9,274 | 48.4 | % | 9,328 | 47.5 | % | (0.6 | )% | |||||||||
| Supplies | 3,085 | 16.1 | % | 3,124 | 15.9 | % | (1.2 | )% | |||||||||
| Other operating expenses, net | 4,570 | 23.8 | % | 4,891 | 25.0 | % | (6.6 | )% | |||||||||
| Electronic health record incentives | (9 | ) | 0.0 | % | (32 | ) | (0.2 | )% | (71.9 | )% | |||||||
| Depreciation and amortization | 870 | 4.5 | % | 850 | 4.3 | % | |||||||||||
| Impairment and restructuring charges, and acquisition related costs | 541 | 2.8 | % | 202 | 1.1 | % | |||||||||||
| Litigation and investigation costs | 23 | 0.1 | % | 293 | 1.5 | % | |||||||||||
| Gains on sales, consolidation and deconsolidation of facilities | (144 | ) | (0.7 | )% | (151 | ) | (0.8 | )% | |||||||||
| Operating income | 1,113 | 5.8 | % | 1,247 | 6.4 | % | |||||||||||
| Interest expense | (1,028 | ) | (979 | ) | |||||||||||||
| Other non-operating expense, net | (22 | ) | (20 | ) | |||||||||||||
| Loss from early extinguishment of debt | (164 | ) | — | ||||||||||||||
| Income (loss) from continuing operations, before income taxes | (101 | ) | 248 | ||||||||||||||
| Income tax expense | (219 | ) | (67 | ) | |||||||||||||
| Income (loss) from continuing operations, before discontinued operations | (320 | ) | 181 | ||||||||||||||
| Discontinued operations: | |||||||||||||||||
| Loss from operations | — | (6 | ) | ||||||||||||||
| Income tax benefit | — | 1 | |||||||||||||||
| Loss from discontinued operations | — | (5 | ) | ||||||||||||||
| Net income (loss) | (320 | ) | 176 | ||||||||||||||
| Less: Net income attributable to noncontrolling interests | 384 | 368 | |||||||||||||||
| Net loss attributable to Tenet Healthcare Corporation common shareholders | $ | (704 | ) | $ | (192 | ) | |||||||||||
| Amounts attributable to Tenet Healthcare Corporation common shareholders | |||||||||||||||||
| Loss from continuing operations, net of tax | $ | (704 | ) | $ | (187 | ) | |||||||||||
| Loss from discontinued operations, net of tax | — | (5 | ) | ||||||||||||||
| Net loss attributable to Tenet Healthcare Corporation common shareholders | $ | (704 | ) | $ | (192 | ) | |||||||||||
| Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders: | |||||||||||||||||
| Basic | |||||||||||||||||
| Continuing operations | $ | (7.00 | ) | $ | (1.88 | ) | |||||||||||
| Discontinued operations | — | (0.05 | ) | ||||||||||||||
| $ | (7.00 | ) | $ | (1.93 | ) | ||||||||||||
| Diluted | |||||||||||||||||
| Continuing operations | $ | (7.00 | ) | $ | (1.88 | ) | |||||||||||
| Discontinued operations | — | (0.05 | ) | ||||||||||||||
| $ | (7.00 | ) | $ | (1.93 | ) | ||||||||||||
| Weighted average shares and dilutive securities outstanding (in thousands): | |||||||||||||||||
| Basic | 100,592 | 99,321 | |||||||||||||||
| Diluted* | 100,592 | 99,321 | |||||||||||||||
| * | Had we generated income from continuing operations in the twelve months ended December 31, 2017 and 2016, the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 788 thousand and 1,421 thousand shares, respectively. |
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TENET HEALTHCARE CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) |
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| December 31, | December 31, | |||||||
| (Dollars in millions) | 2017 | 2016 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 611 | $ | 716 | ||||
| Accounts receivable, less allowance for doubtful accounts | 2,616 | 2,897 | ||||||
| Inventories of supplies, at cost | 289 | 326 | ||||||
| Income tax receivable | 5 | 4 | ||||||
| Assets held for sale | 1,017 | 29 | ||||||
| Other current assets | 1,035 | 1,285 | ||||||
| Total current assets | 5,573 | 5,257 | ||||||
| Investments and other assets | 1,543 | 1,250 | ||||||
| Deferred income taxes | 455 | 871 | ||||||
| Property and equipment, at cost, less accumulated depreciation and amortization | 7,030 | 8,053 | ||||||
| Goodwill | 7,018 | 7,425 | ||||||
| Other intangible assets, at cost, less accumulated amortization | 1,766 | 1,845 | ||||||
| Total assets | $ | 23,385 | $ | 24,701 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 146 | $ | 191 | ||||
| Accounts payable | 1,175 | 1,329 | ||||||
| Accrued compensation and benefits | 848 | 872 | ||||||
| Professional and general liability reserves | 200 | 181 | ||||||
| Accrued interest payable | 256 | 210 | ||||||
| Liabilities held for sale | 480 | 9 | ||||||
| Other current liabilities | 1,227 | 1,242 | ||||||
| Total current liabilities | 4,332 | 4,034 | ||||||
| Long-term debt, net of current portion | 14,791 | 15,064 | ||||||
| Professional and general liability reserves | 654 | 613 | ||||||
| Defined benefit plan obligations | 536 | 626 | ||||||
| Deferred income taxes | 36 | 279 | ||||||
| Other long-term liabilities | 631 | 610 | ||||||
| Total liabilities | 20,980 | 21,226 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interests in equity of consolidated subsidiaries | 1,866 | 2,393 | ||||||
| Equity: | ||||||||
| Shareholders’ equity: | ||||||||
| Common stock | 7 | 7 | ||||||
| Additional paid-in capital | 4,859 | 4,827 | ||||||
| Accumulated other comprehensive loss | (204 | ) | (258 | ) | ||||
| Accumulated deficit | (2,390 | ) | (1,742 | ) | ||||
| Common stock in treasury, at cost | (2,419 | ) | (2,417 | ) | ||||
| Total shareholders’ equity (deficit) | (147 | ) | 417 | |||||
| Noncontrolling interests | 686 | 665 | ||||||
| Total equity | 539 | 1,082 | ||||||
| Total liabilities and equity | $ | 23,385 | $ | 24,701 | ||||
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TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) |
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| Years Ended | ||||||||
| (Dollars in millions) | December 31, | |||||||
| 2017 | 2016 | |||||||
| Net income (loss) | $ | (320 | ) | $ | 176 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 870 | 850 | ||||||
| Provision for doubtful accounts | 1,434 | 1,449 | ||||||
| Deferred income tax expense | 200 | 41 | ||||||
| Stock-based compensation expense | 59 | 68 | ||||||
| Impairment and restructuring charges, and acquisition-related costs | 541 | 202 | ||||||
| Litigation and investigation costs | 23 | 293 | ||||||
| Gains on sales, consolidation and deconsolidation of facilities | (144 | ) | (151 | ) | ||||
| Loss from early extinguishment of debt | 164 | — | ||||||
| Equity in earnings of unconsolidated affiliates, net of distributions received | (18 | ) | (13 | ) | ||||
| Amortization of debt discount and debt issuance costs | 44 | 41 | ||||||
| Pre-tax loss from discontinued operations | — | 6 | ||||||
| Other items, net | (18 | ) | (1 | ) | ||||
| Changes in cash from operating assets and liabilities: | ||||||||
| Accounts receivable | (1,448 | ) | (1,604 | ) | ||||
| Inventories and other current assets | (35 | ) | (83 | ) | ||||
| Income taxes | (38 | ) | (8 | ) | ||||
| Accounts payable, accrued expenses and other current liabilities | (10 | ) | (51 | ) | ||||
| Other long-term liabilities | 26 | 40 | ||||||
| Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (125 | ) | (691 | ) | ||||
| Net cash used in operating activities from discontinued operations, excluding income taxes | (5 | ) | (6 | ) | ||||
| Net cash provided by operating activities | 1,200 | 558 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment — continuing operations | (707 | ) | (875 | ) | ||||
| Purchases of businesses or joint venture interests, net of cash acquired | (50 | ) | (117 | ) | ||||
| Proceeds from sales of facilities and other assets | 827 | 573 | ||||||
| Proceeds from sales of marketable securities, long-term investments and other assets | 36 | 62 | ||||||
| Purchases of equity investments | (68 | ) | (39 | ) | ||||
| Other long-term assets | (10 | ) | (31 | ) | ||||
| Other items, net | (7 | ) | (3 | ) | ||||
| Net cash provided by (used in) investing activities | 21 | (430 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Repayments of borrowings under credit facility | (970 | ) | (1,895 | ) | ||||
| Proceeds from borrowings under credit facility | 970 | 1,895 | ||||||
| Repayments of other borrowings | (4,139 | ) | (154 | ) | ||||
| Proceeds from other borrowings | 3,795 | 760 | ||||||
| Debt issuance costs | (62 | ) | (12 | ) | ||||
| Distributions paid to noncontrolling interests | (258 | ) | (218 | ) | ||||
| Proceeds from sale of noncontrolling interests | 31 | 22 | ||||||
| Purchases of noncontrolling interests | (729 | ) | (186 | ) | ||||
| Proceeds from exercise of stock options and employee stock purchase plan | 7 | 4 | ||||||
| Other items, net | 29 | 16 | ||||||
| Net cash provided by (used in) financing activities | (1,326 | ) | 232 | |||||
| Net increase (decrease) in cash and cash equivalents | (105 | ) | 360 | |||||
| Cash and cash equivalents at beginning of period | 716 | 356 | ||||||
| Cash and cash equivalents at end of period | $ | 611 | $ | 716 | ||||
| Supplemental disclosures: | ||||||||
| Interest paid, net of capitalized interest | $ | (939 | ) | $ | (932 | ) | ||
| Income tax payments, net | $ | (56 | ) | $ | (33 | ) | ||
|
TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) (Unaudited) |
||||||||||||||||||||||||
|
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts) |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||
| 2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||
| Admissions, Patient Days and Surgeries | ||||||||||||||||||||||||
| Number of hospitals (at end of period) | 72 | 75 | (3 | ) | * | 72 | 75 | (3 | ) | * | ||||||||||||||
| Total admissions | 186,185 | 192,104 | (3.1 | )% | 758,875 | 792,143 | (4.2 | )% | ||||||||||||||||
| Adjusted patient admissions | 332,642 | 338,929 | (1.9 | )% | 1,354,266 | 1,389,768 | (2.6 | )% | ||||||||||||||||
| Paying admissions (excludes charity and uninsured) | 176,158 | 181,617 | (3.0 | )% | 717,498 | 749,634 | (4.3 | )% | ||||||||||||||||
| Charity and uninsured admissions | 10,027 | 10,487 | (4.4 | )% | 41,377 | 42,509 | (2.7 | )% | ||||||||||||||||
| Admissions through emergency department | 123,887 | 120,549 | 2.8 | % | 492,660 | 499,335 | (1.3 | )% | ||||||||||||||||
| Paying admissions as a percentage of total admissions | 94.6 | % | 94.5 | % | 0.1 | % | * | 94.5 | % | 94.6 | % | (0.1 | )% | * | ||||||||||
| Charity and uninsured admissions as a percentage of total admissions | 5.4 | % | 5.5 | % | (0.1 | )% | * | 5.5 | % | 5.4 | % | 0.1 | % | * | ||||||||||
| Emergency department admissions as a percentage of total admissions | 66.5 | % | 62.8 | % | 3.7 | % | * | 64.9 | % | 63.0 | % | 1.9 | % | * | ||||||||||
| Surgeries — inpatient | 50,292 | 53,071 | (5.2 | )% | 205,114 | 217,906 | (5.9 | )% | ||||||||||||||||
| Surgeries — outpatient | 68,604 | 73,678 | (6.9 | )% | 276,895 | 298,974 | (7.4 | )% | ||||||||||||||||
| Total surgeries | 118,896 | 126,749 | (6.2 | )% | 482,009 | 516,880 | (6.7 | )% | ||||||||||||||||
| Patient days — total | 857,728 | 888,185 | (3.4 | )% | 3,509,056 | 3,690,335 | (4.9 | )% | ||||||||||||||||
| Adjusted patient days | 1,505,130 | 1,543,490 | (2.5 | )% | 6,163,961 | 6,395,025 | (3.6 | )% | ||||||||||||||||
| Average length of stay (days) | 4.61 | 4.62 | (0.2 | )% | 4.62 | 4.66 | (0.9 | )% | ||||||||||||||||
| Licensed beds (at end of period) | 19,141 | 20,354 | (6.0 | )% | 19,141 | 20,354 | (6.0 | )% | ||||||||||||||||
| Average licensed beds | 19,320 | 20,326 | (4.9 | )% | 19,995 | 20,651 | (3.2 | )% | ||||||||||||||||
| Utilization of licensed beds | 48.3 | % | 47.5 | % | 0.8 | % | * | 48.1 | % | 48.8 | % | (0.7 | )% | * | ||||||||||
| Outpatient Visits | ||||||||||||||||||||||||
| Total visits | 1,901,864 | 1,950,549 | (2.5 | )% | 7,791,125 | 8,144,473 | (4.3 | )% | ||||||||||||||||
| Paying visits (excludes charity and uninsured) | 1,777,790 | 1,834,844 | (3.1 | )% | 7,277,514 | 7,577,799 | (4.0 | )% | ||||||||||||||||
| Charity and uninsured visits | 124,074 | 115,705 | 7.2 | % | 513,611 | 566,674 | (9.4 | )% | ||||||||||||||||
| Emergency department visits | 711,268 | 701,100 | 1.5 | % | 2,854,200 | 2,914,421 | (2.1 | )% | ||||||||||||||||
| Paying visits as a percentage of total visits | 93.5 | % | 94.1 | % | (0.6 | )% | * | 93.4 | % | 93.0 | % | 0.4 | % | * | ||||||||||
| Charity and uninsured visits as a percentage of total visits | 6.5 | % | 5.9 | % | 0.6 | % | * | 6.6 | % | 7.0 | % | (0.4 | )% | * | ||||||||||
| Total emergency department admissions and visits | 835,155 | 821,649 | 1.6 | % | 3,346,860 | 3,413,756 | (2.0 | )% | ||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Net inpatient revenues | $ | 2,721 | $ | 2,606 | 4.4 | % | $ | 10,319 | $ | 10,619 | (2.8 | )% | ||||||||||||
| Net outpatient revenues | $ | 1,450 | $ | 1,457 | (0.5 | )% | $ | 5,869 | $ | 5,848 | 0.4 | % | ||||||||||||
| Total patient revenues | $ | 4,171 | $ | 4,063 | 2.7 | % | $ | 16,188 | $ | 16,467 | (1.7 | )% | ||||||||||||
| Revenues on a Per Admission, Per Patient Day and Per Visit Basis | ||||||||||||||||||||||||
| Net inpatient revenue per admission | $ | 14,614 | $ | 13,566 | 7.7 | % | $ | 13,598 | $ | 13,405 | 1.4 | % | ||||||||||||
| Net inpatient revenue per patient day | $ | 3,172 | $ | 2,934 | 8.1 | % | $ | 2,941 | $ | 2,878 | 2.2 | % | ||||||||||||
| Net outpatient revenue per visit | $ | 762 | $ | 747 | 2.0 | % | $ | 753 | $ | 718 | 4.9 | % | ||||||||||||
| Net patient revenue per adjusted patient admission | $ | 12,539 | $ | 11,988 | 4.6 | % | $ | 11,953 | $ | 11,849 | 0.9 | % | ||||||||||||
| Net patient revenue per adjusted patient day | $ | 2,771 | $ | 2,632 | 5.3 | % | $ | 2,626 | $ | 2,575 | 2.0 | % | ||||||||||||
| Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2) | $ | 10,492 | $ | 10,264 | 2.2 | % | $ | 10,384 | $ | 10,176 | 2.0 | % | ||||||||||||
| Net Patient Revenues from: | ||||||||||||||||||||||||
| Medicare | 18.9 | % | 20.4 | % | (1.5 | )% | * | 20.0 | % | 20.5 | % | (0.5 | )% | * | ||||||||||
| Medicaid | 11.9 | % | 8.2 | % | 3.7 | % | * | 8.1 | % | 8.2 | % | (0.1 | )% | * | ||||||||||
| Managed care | 59.6 | % | 61.4 | % | (1.8 | )% | * | 61.7 | % | 61.5 | % | 0.2 | % | * | ||||||||||
| Indemnity, self-pay and other | 9.6 | % | 10.0 | % | (0.4 | )% | * | 10.2 | % | 9.8 | % | 0.4 | % | * | ||||||||||
| (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. |
| * | This change is the difference between the 2017 and 2016 amounts shown. |
|
TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) (Unaudited) |
||||||||||||||||||||||||
|
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts) |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||
| 2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||
| Admissions, Patient Days and Surgeries | ||||||||||||||||||||||||
| Number of hospitals (at end of period) | 72 | 72 | — | * | 72 | 72 | — | * | ||||||||||||||||
| Total admissions | 184,877 | 184,561 | 0.2 | % | 738,528 | 753,673 | (2.0 | )% | ||||||||||||||||
| Adjusted patient admissions | 324,495 | 320,445 | 1.3 | % | 1,294,913 | 1,310,962 | (1.2 | )% | ||||||||||||||||
| Paying admissions (excludes charity and uninsured) | 175,025 | 175,026 | — | % | 699,613 | 715,198 | (2.2 | )% | ||||||||||||||||
| Charity and uninsured admissions | 9,852 | 9,535 | 3.3 | % | 38,915 | 38,475 | 1.1 | % | ||||||||||||||||
| Admissions through emergency department | 123,102 | 116,374 | 5.8 | % | 480,180 | 476,068 | 0.9 | % | ||||||||||||||||
| Paying admissions as a percentage of total admissions | 94.7 | % | 94.8 | % | (0.1 | )% | * | 94.7 | % | 94.9 | % | (0.2 | )% | * | ||||||||||
| Charity and uninsured admissions as a percentage of total admissions | 5.3 | % | 5.2 | % | 0.1 | % | * | 5.3 | % | 5.1 | % | 0.2 | % | * | ||||||||||
| Emergency department admissions as a percentage of total admissions | 66.6 | % | 63.1 | % | 3.5 | % | * | 65.0 | % | 63.2 | % | 1.8 | % | * | ||||||||||
| Surgeries — inpatient | 50,070 | 50,971 | (1.8 | )% | 199,871 | 207,609 | (3.7 | )% | ||||||||||||||||
| Surgeries — outpatient | 68,432 | 71,129 | (3.8 | )% | 271,228 | 286,761 | (5.4 | )% | ||||||||||||||||
| Total surgeries | 118,502 | 122,100 | (2.9 | )% | 471,099 | 494,370 | (4.7 | )% | ||||||||||||||||
| Patient days — total | 853,217 | 857,118 | (0.5 | )% | 3,423,934 | 3,515,087 | (2.6 | )% | ||||||||||||||||
| Adjusted patient days | 1,485,209 | 1,481,787 | 0.2 | % | 5,964,002 | 6,080,456 | (1.9 | )% | ||||||||||||||||
| Average length of stay (days) | 4.62 | 4.64 | (0.4 | )% | 4.64 | 4.66 | (0.4 | )% | ||||||||||||||||
| Licensed beds (at end of period) | 19,035 | 19,306 | (1.4 | )% | 19,035 | 19,306 | (1.4 | )% | ||||||||||||||||
| Average licensed beds | 19,214 | 19,278 | (0.3 | )% | 19,277 | 19,315 | (0.2 | )% | ||||||||||||||||
| Utilization of licensed beds | 48.3 | % | 48.3 | % | — | % | * | 48.7 | % | 49.9 | % | (1.2 | )% | * | ||||||||||
| Outpatient Visits | ||||||||||||||||||||||||
| Total visits | 1,865,781 | 1,869,272 | (0.2 | )% | 7,495,754 | 7,697,302 | (2.6 | )% | ||||||||||||||||
| Paying visits (excludes charity and uninsured) | 1,747,285 | 1,757,013 | (0.6 | )% | 7,028,688 | 7,200,453 | (2.4 | )% | ||||||||||||||||
| Charity and uninsured visits | 118,496 | 112,259 | 5.6 | % | 467,066 | 496,849 | (6.0 | )% | ||||||||||||||||
| Emergency department visits | 676,705 | 650,573 | 4.0 | % | 2,664,448 | 2,689,519 | (0.9 | )% | ||||||||||||||||
| Paying visits as a percentage of total visits | 93.6 | % | 94.0 | % | (0.4 | )% | * | 93.8 | % | 93.5 | % | 0.3 | % | * | ||||||||||
| Charity and uninsured visits as a percentage of total visits | 6.4 | % | 6.0 | % | 0.4 | % | * | 6.2 | % | 6.5 | % | (0.3 | )% | * | ||||||||||
| Total emergency department admissions and visits | 799,807 | 766,947 | 4.3 | % | 3,144,628 | 3,165,587 | (0.7 | )% | ||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Net inpatient revenues | $ | 2,695 | $ | 2,518 | 7.0 | % | $ | 10,037 | $ | 10,089 | (0.5 | )% | ||||||||||||
| Net outpatient revenues | $ | 1,431 | $ | 1,371 | 4.4 | % | $ | 5,626 | $ | 5,452 | 3.2 | % | ||||||||||||
| Total patient revenues | $ | 4,126 | $ | 3,889 | 6.1 | % | $ | 15,663 | $ | 15,541 | 0.8 | % | ||||||||||||
| Revenues on a Per Admission, Per Patient Day and Per Visit Basis | ||||||||||||||||||||||||
| Net inpatient revenue per admission | $ | 14,577 | $ | 13,643 | 6.8 | % | $ | 13,591 | $ | 13,386 | 1.5 | % | ||||||||||||
| Net inpatient revenue per patient day | $ | 3,159 | $ | 2,938 | 7.5 | % | $ | 2,931 | $ | 2,870 | 2.1 | % | ||||||||||||
| Net outpatient revenue per visit | $ | 767 | $ | 733 | 4.6 | % | $ | 751 | $ | 708 | 6.1 | % | ||||||||||||
| Net patient revenue per adjusted patient admission | $ | 12,715 | $ | 12,136 | 4.8 | % | $ | 12,096 | $ | 11,855 | 2.0 | % | ||||||||||||
| Net patient revenue per adjusted patient day | $ | 2,778 | $ | 2,625 | 5.8 | % | $ | 2,626 | $ | 2,556 | 2.7 | % | ||||||||||||
| Net Patient Revenues from: | ||||||||||||||||||||||||
| Medicare | 18.9 | % | 20.8 | % | (1.9 | )% | * | 20.3 | % | 21.0 | % | (0.7 | )% | * | ||||||||||
| Medicaid | 12.1 | % | 8.2 | % | 3.9 | % | * | 8.1 | % | 8.2 | % | (0.1 | )% | * | ||||||||||
| Managed care | 59.3 | % | 61.2 | % | (1.9 | )% | * | 61.6 | % | 61.6 | % | — | % | * | ||||||||||
| Indemnity, self-pay and other | 9.7 | % | 9.8 | % | (0.1 | )% | * | 10.0 | % | 9.2 | % | 0.8 | % | * | ||||||||||
| (1) | Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 72 hospitals operated throughout the twelve months ended December 31, 2017 and 2016, and associated outpatient facilities but excludes the results of hospitals that Tenet began operating, as well as hospitals Tenet divested, since January 1, 2016. |
| * | This change is the difference between the 2017 and 2016 amounts shown. |
|
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 | |||||||||||||||
| 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 attributable to noncontrolling interests | 89 | 87 | 78 | 130 | 384 | |||||||||||||||
| Net loss attributable to Tenet Healthcare Corporation common shareholders | $ | (53 | ) | $ | (55 | ) | $ | (367 | ) | $ | (229 | ) | $ | (704 | ) | |||||
| Amounts 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 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 patient day, per admission, per adjusted admission and per visit 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 inpatient revenues | $ | 2,609 | $ | 2,555 | $ | 2,434 | $ | 2,721 | $ | 10,319 | ||||||||||
| Net outpatient revenues | $ | 1,482 | $ | 1,511 | $ | 1,426 | $ | 1,450 | $ | 5,869 | ||||||||||
| Total patient revenues | $ | 4,091 | $ | 4,066 | $ | 3,860 | $ | 4,171 | $ | 16,188 | ||||||||||
| Revenues on a Per Admission, Per Patient Day and Per Visit Basis | ||||||||||||||||||||
| Net inpatient revenue per admission | $ | 13,250 | $ | 13,420 | $ | 13,129 | $ | 14,614 | $ | 13,598 | ||||||||||
| Net inpatient revenue per patient day | $ | 2,826 | $ | 2,920 | $ | 2,853 | $ | 3,172 | $ | 2,941 | ||||||||||
| Net outpatient revenue per visit | $ | 726 | $ | 762 | $ | 764 | $ | 762 | $ | 753 | ||||||||||
| Net patient revenue per adjusted patient admission | $ | 11,785 | $ | 11,874 | $ | 11,625 | $ | 12,539 | $ | 11,953 | ||||||||||
| Net patient revenue per adjusted patient day | $ | 2,551 | $ | 2,619 | $ | 2,568 | $ | 2,771 | $ | 2,626 | ||||||||||
| Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2) | $ | 10,290 | $ | 10,394 | $ | 10,367 | $ | 10,492 | $ | 10,384 | ||||||||||
| Net Patient Revenues from: | ||||||||||||||||||||
| Medicare | 21.0 | % | 20.1 | % | 20.0 | % | 18.9 | % | 20.0 | % | ||||||||||
| Medicaid | 6.7 | % | 6.9 | % | 6.5 | % | 11.9 | % | 8.1 | % | ||||||||||
| Managed care | 62.3 | % | 62.5 | % | 62.5 | % | 59.6 | % | 61.7 | % | ||||||||||
| Indemnity, self-pay and other | 10.0 | % | 10.5 | % | 11.0 | % | 9.6 | % | 10.2 | % | ||||||||||
| (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. |
|
TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) (Unaudited) |
||||||||||||||||||||
|
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit 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) | 72 | 72 | 72 | 72 | 72 | |||||||||||||||
| Total admissions | 189,071 | 182,610 | 181,970 | 184,877 | 738,528 | |||||||||||||||
| Adjusted patient admissions | 326,533 | 323,064 | 320,821 | 324,495 | 1,294,913 | |||||||||||||||
| Paying admissions (excludes charity and uninsured) | 179,763 | 173,034 | 171,791 | 175,025 | 699,613 | |||||||||||||||
| Charity and uninsured admissions | 9,308 | 9,576 | 10,179 | 9,852 | 38,915 | |||||||||||||||
| Admissions through emergency department | 121,749 | 116,968 | 118,361 | 123,102 | 480,180 | |||||||||||||||
| Paying admissions as a percentage of total admissions | 95.1 | % | 94.8 | % | 94.4 | % | 94.7 | % | 94.7 | % | ||||||||||
| Charity and uninsured admissions as a percentage of total admissions | 4.9 | % | 5.2 | % | 5.6 | % | 5.3 | % | 5.3 | % | ||||||||||
| Emergency department admissions as a percentage of total admissions | 64.4 | % | 64.1 | % | 65.0 | % | 66.6 | % | 65.0 | % | ||||||||||
| Surgeries — inpatient | 49,735 | 49,992 | 50,074 | 50,070 | 199,871 | |||||||||||||||
| Surgeries — outpatient | 67,375 | 68,939 | 66,482 | 68,432 | 271,228 | |||||||||||||||
| Total surgeries | 117,110 | 118,931 | 116,556 | 118,502 | 471,099 | |||||||||||||||
| Patient days — total | 889,667 | 842,835 | 838,215 | 853,217 | 3,423,934 | |||||||||||||||
| Adjusted patient days | 1,527,316 | 1,485,211 | 1,466,266 | 1,485,209 | 5,964,002 | |||||||||||||||
| Average length of stay (days) | 4.71 | 4.62 | 4.61 | 4.62 | 4.64 | |||||||||||||||
| Licensed beds (at end of period) | 19,285 | 19,281 | 19,327 | 19,035 | 19,035 | |||||||||||||||
| Average licensed beds | 19,286 | 19,281 | 19,328 | 19,214 | 19,277 | |||||||||||||||
| Utilization of licensed beds | 51.3 | % | 48.0 | % | 47.1 | % | 48.3 | % | 48.7 | % | ||||||||||
| Outpatient Visits | ||||||||||||||||||||
| Total visits | 1,937,168 | 1,879,210 | 1,813,595 | 1,865,781 | 7,495,754 | |||||||||||||||
| Paying visits (excludes charity and uninsured) | 1,821,837 | 1,763,098 | 1,696,468 | 1,747,285 | 7,028,688 | |||||||||||||||
| Charity and uninsured visits | 115,331 | 116,112 | 117,127 | 118,496 | 467,066 | |||||||||||||||
| Emergency department visits | 674,547 | 666,865 | 646,331 | 676,705 | 2,664,448 | |||||||||||||||
| Paying visits as a percentage of total visits | 94.0 | % | 93.8 | % | 93.5 | % | 93.6 | % | 93.8 | % | ||||||||||
| Charity and uninsured visits as a percentage of total visits | 6.0 | % | 6.2 | % | 6.5 | % | 6.4 | % | 6.2 | % | ||||||||||
| Total emergency department admissions and visits | 796,296 | 783,833 | 764,692 | 799,807 | 3,144,628 | |||||||||||||||
| Revenues | ||||||||||||||||||||
| Net inpatient revenues | $ | 2,505 | $ | 2,446 | $ | 2,391 | $ | 2,695 | $ | 10,037 | ||||||||||
| Net outpatient revenues | $ | 1,390 | $ | 1,419 | $ | 1,386 | $ | 1,431 | $ | 5,626 | ||||||||||
| Total patient revenues | $ | 3,895 | $ | 3,865 | $ | 3,777 | $ | 4,126 | $ | 15,663 | ||||||||||
| Revenues on a Per Admission, Per Patient Day and Per Visit Basis | ||||||||||||||||||||
| Net inpatient revenue per admission | $ | 13,249 | $ | 13,395 | $ | 13,140 | $ | 14,577 | $ | 13,591 | ||||||||||
| Net inpatient revenue per patient day | $ | 2,816 | $ | 2,902 | $ | 2,852 | $ | 3,159 | $ | 2,931 | ||||||||||
| Net outpatient revenue per visit | $ | 718 | $ | 755 | $ | 764 | $ | 767 | $ | 751 | ||||||||||
| Net patient revenue per adjusted patient admission | $ | 11,928 | $ | 11,964 | $ | 11,773 | $ | 12,715 | $ | 12,096 | ||||||||||
| Net patient revenue per adjusted patient day | $ | 2,550 | $ | 2,602 | $ | 2,576 | $ | 2,778 | $ | 2,626 | ||||||||||
| Net Patient Revenues from: | ||||||||||||||||||||
| Medicare | 21.6 | % | 20.6 | % | 20.1 | % | 18.9 | % | 20.3 | % | ||||||||||
| Medicaid | 6.8 | % | 6.8 | % | 6.6 | % | 12.1 | % | 8.1 | % | ||||||||||
| Managed care | 62.2 | % | 62.6 | % | 62.3 | % | 59.3 | % | 61.6 | % | ||||||||||
| Indemnity, self-pay and other | 9.4 | % | 10.0 | % | 11.0 | % | 9.7 | % | 10.0 | % | ||||||||||
| (1) | Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 72 hospitals operated throughout the twelve months ended December 31, 2017 and 2016, and associated outpatient facilities but excludes the results of hospitals that Tenet began operating, as well as hospitals Tenet divested, since January 1, 2016. |
|
TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) (Unaudited) |
||||||||||||||||||||
|
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts) |
Three Months Ended | Year Ended | ||||||||||||||||||
| 3/31/2016 | 6/30/2016 | 9/30/2016 | 12/31/2016 | 12/31/2016 | ||||||||||||||||
| Admissions, Patient Days and Surgeries | ||||||||||||||||||||
| Number of hospitals (at end of period) | 72 | 72 | 72 | 72 | 72 | |||||||||||||||
| Total admissions | 195,679 | 186,668 | 186,765 | 184,561 | 753,673 | |||||||||||||||
| Adjusted patient admissions | 335,006 | 327,551 | 327,960 | 320,445 | 1,310,962 | |||||||||||||||
| Paying admissions (excludes charity and uninsured) | 186,706 | 177,090 | 176,376 | 175,026 | 715,198 | |||||||||||||||
| Charity and uninsured admissions | 8,973 | 9,578 | 10,389 | 9,535 | 38,475 | |||||||||||||||
| Admissions through emergency department | 125,406 | 118,054 | 116,234 | 116,374 | 476,068 | |||||||||||||||
| Paying admissions as a percentage of total admissions | 95.4 | % | 94.9 | % | 94.4 | % | 94.8 | % | 94.9 | % | ||||||||||
| Charity and uninsured admissions as a percentage of total admissions | 4.6 | % | 5.1 | % | 5.6 | % | 5.2 | % | 5.1 | % | ||||||||||
| Emergency department admissions as a percentage of total admissions | 64.1 | % | 63.2 | % | 62.2 | % | 63.1 | % | 63.2 | % | ||||||||||
| Surgeries - inpatient | 51,719 | 52,363 | 52,556 | 50,971 | 207,609 | |||||||||||||||
| Surgeries - outpatient | 72,054 | 73,372 | 70,206 | 71,129 | 286,761 | |||||||||||||||
| Total surgeries | 123,773 | 125,735 | 122,762 | 122,100 | 494,370 | |||||||||||||||
| Patient days - total | 929,061 | 865,808 | 863,100 | 857,118 | 3,515,087 | |||||||||||||||
| Adjusted patient days | 1,579,483 | 1,510,969 | 1,508,217 | 1,481,787 | 6,080,456 | |||||||||||||||
| Average length of stay (days) | 4.75 | 4.64 | 4.62 | 4.64 | 4.66 | |||||||||||||||
| Licensed beds (at end of period) | 19,332 | 19,332 | 19,292 | 19,306 | 19,306 | |||||||||||||||
| Average licensed beds | 19,327 | 19,332 | 19,319 | 19,278 | 19,315 | |||||||||||||||
| Utilization of licensed beds | 53.4 | % | 49.2 | % | 48.6 | % | 48.3 | % | 49.9 | % | ||||||||||
| Outpatient Visits | ||||||||||||||||||||
| Total visits | 1,969,133 | 1,945,124 | 1,913,773 | 1,869,272 | 7,697,302 | |||||||||||||||
| Paying visits (excludes charity and uninsured) | 1,841,053 | 1,819,407 | 1,782,980 | 1,757,013 | 7,200,453 | |||||||||||||||
| Charity and uninsured visits | 128,080 | 125,717 | 130,793 | 112,259 | 496,849 | |||||||||||||||
| Emergency department visits | 702,777 | 673,544 | 662,625 | 650,573 | 2,689,519 | |||||||||||||||
| Paying visits as a percentage of total visits | 93.5 | % | 93.5 | % | 93.2 | % | 94.0 | % | 93.5 | % | ||||||||||
| Charity and uninsured visits as a percentage of total visits | 6.5 | % | 6.5 | % | 6.8 | % | 6.0 | % | 6.5 | % | ||||||||||
| Total emergency department admissions and visits | 828,183 | 791,598 | 778,859 | 766,947 | 3,165,587 | |||||||||||||||
| Revenues | ||||||||||||||||||||
| Net inpatient revenues | $ | 2,568 | $ | 2,470 | $ | 2,533 | $ | 2,518 | $ | 10,089 | ||||||||||
| Net outpatient revenues | $ | 1,370 | $ | 1,377 | $ | 1,334 | $ | 1,371 | $ | 5,452 | ||||||||||
| Total patient revenues | $ | 3,938 | $ | 3,847 | $ | 3,867 | $ | 3,889 | $ | 15,541 | ||||||||||
| Revenues on a Per Admission, Per Patient Day and Per Visit Basis | ||||||||||||||||||||
| Net inpatient revenue per admission | $ | 13,124 | $ | 13,232 | $ | 13,562 | $ | 13,643 | $ | 13,386 | ||||||||||
| Net inpatient revenue per patient day | $ | 2,764 | $ | 2,853 | $ | 2,935 | $ | 2,938 | $ | 2,870 | ||||||||||
| Net outpatient revenue per visit | $ | 696 | $ | 708 | $ | 697 | $ | 733 | $ | 708 | ||||||||||
| Net patient revenue per adjusted patient admission | $ | 11,755 | $ | 11,745 | $ | 11,791 | $ | 12,136 | $ | 11,855 | ||||||||||
| Net patient revenue per adjusted patient day | $ | 2,493 | $ | 2,546 | $ | 2,564 | $ | 2,625 | $ | 2,556 | ||||||||||
| Net Patient Revenues from: | ||||||||||||||||||||
| Medicare | 20.4 | % | 22.3 | % | 20.5 | % | 20.8 | % | 21.0 | % | ||||||||||
| Medicaid | 8.7 | % | 7.6 | % | 8.4 | % | 8.2 | % | 8.2 | % | ||||||||||
| Managed care | 61.7 | % | 59.5 | % | 64.3 | % | 61.2 | % | 61.6 | % | ||||||||||
| Indemnity, self-pay and other | 9.2 | % | 10.6 | % | 6.8 | % | 9.8 | % | 9.2 | % | ||||||||||
| (1) | Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 72 hospitals operated throughout the twelve months ended December 31, 2017 and 2016, and associated outpatient facilities but excludes the results of hospitals that Tenet began operating, as well as hospitals Tenet divested, since January 1, 2016. |
|
TENET HEALTHCARE CORPORATION SEGMENT REPORTING (Unaudited) |
||||||||||||||||
| (Dollars in millions) | December 31, | December 31, | ||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Assets | ||||||||||||||||
| Hospital Operations and other | $ | 16,466 | $ | 17,871 | ||||||||||||
| Ambulatory Care | 5,822 | 5,722 | ||||||||||||||
| Conifer | 1,097 | 1,108 | ||||||||||||||
| Total | $ | 23,385 | $ | 24,701 | ||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Capital expenditures: | ||||||||||||||||
| Hospital Operations and other | $ | 184 | $ | 242 | $ | 625 | $ | 799 | ||||||||
| Ambulatory Care | 23 | 9 | 60 | 51 | ||||||||||||
| Conifer | 8 | 10 | 22 | 25 | ||||||||||||
| Total | $ | 215 | $ | 261 | $ | 707 | $ | 875 | ||||||||
| Net operating revenues: | ||||||||||||||||
| Hospital Operations and other total prior to inter-segment eliminations(1) | $ | 4,194 | $ | 4,143 | $ | 16,260 | $ | 16,904 | ||||||||
| Ambulatory Care | 545 | 478 | 1,940 | 1,797 | ||||||||||||
| Conifer | ||||||||||||||||
| Tenet | 155 | 163 | 618 | 651 | ||||||||||||
| Other clients | 239 | 239 | 979 | 920 | ||||||||||||
| Total Conifer revenues | 394 | 402 | 1,597 | 1,571 | ||||||||||||
| Inter-segment eliminations | (155 | ) | (163 | ) | (618 | ) | (651 | ) | ||||||||
| Total | $ | 4,978 | $ | 4,860 | $ | 19,179 | $ | 19,621 | ||||||||
| Equity in earnings of unconsolidated affiliates: | ||||||||||||||||
| Hospital Operations and other | $ | — | $ | 3 | $ | 4 | $ | 9 | ||||||||
| Ambulatory Care | 49 | 43 | 140 | 122 | ||||||||||||
| Total | $ | 49 | $ | 46 | $ | 144 | $ | 131 | ||||||||
| Adjusted EBITDA: | ||||||||||||||||
| Hospital Operations and other(2) | $ | 538 | $ | 395 | $ | 1,462 | $ | 1,586 | ||||||||
| Ambulatory Care | 223 | 183 | 699 | 615 | ||||||||||||
| Conifer | 79 | 72 | 283 | 277 | ||||||||||||
| Total | $ | 840 | $ | 650 | $ | 2,444 | $ | 2,478 | ||||||||
| Depreciation and amortization: | ||||||||||||||||
| Hospital Operations and other | $ | 176 | $ | 184 | $ | 736 | $ | 709 | ||||||||
| Ambulatory Care | 18 | 22 | 84 | 91 | ||||||||||||
| Conifer | 14 | 12 | 50 | 50 | ||||||||||||
| Total | $ | 208 | $ | 218 | $ | 870 | $ | 850 | ||||||||
| (1) | Hospital Operations and other revenues includes health plan revenues of $10 million and $110 million for the three and twelve months ended December 31, 2017, respectively and $97 million and $482 million for the three and twelve months ended December 31, 2016, respectively. |
| (2) | Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of less than one million and $(41) million for the three and twelve months ended December 31, 2017, respectively and $(29) million and $(37) million for the three and twelve months ended December 31, 2016, respectively. |
|
TENET HEALTHCARE CORPORATION STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited) |
||||||||||||||||
| (Dollars in millions) | Three Months Ended December 31, | |||||||||||||||
| 2017 | 2016 | |||||||||||||||
|
Ambulatory |
Unconsolidated |
Ambulatory |
Unconsolidated |
|||||||||||||
| Net operating revenues: | ||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 556 | $ | 625 | $ | 487 | $ | 582 | ||||||||
| Less: Provision for doubtful accounts | (11 | ) | (10 | ) | (9 | ) | (12 | ) | ||||||||
| Net operating revenues(1) | 545 | 615 | 478 | 570 | ||||||||||||
| Equity in earnings of unconsolidated affiliates(2) | 49 | — | 43 | — | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries, wages and benefits | 165 | 131 | 157 | 124 | ||||||||||||
| Supplies | 113 | 157 | 99 | 145 | ||||||||||||
| Other operating expenses, net | 93 | 104 | 83 | 101 | ||||||||||||
| Electronic health record incentives | — | — | (1 | ) | — | |||||||||||
| Depreciation and amortization | 18 | 16 | 22 | 17 | ||||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 4 | — | 17 | — | ||||||||||||
| (Gains) losses on sales, consolidation and deconsolidation of facilities | (2 | ) | — | — | 4 | |||||||||||
| Operating income | 203 | 207 | 144 | 179 | ||||||||||||
| Interest expense | (36 | ) | (5 | ) | (35 | ) | (6 | ) | ||||||||
| Other non-operating income (expense), net | 1 | (1 | ) | 2 | — | |||||||||||
| Income from continuing operations, before income taxes | 168 | 201 | 111 | 173 | ||||||||||||
| Income tax benefit (expense) | 73 | (3 | ) | (17 | ) | (3 | ) | |||||||||
| Net income | 241 | $ | 198 | 94 | $ | 170 | ||||||||||
| Less: Net income attributable to noncontrolling interests(3) | 111 | 81 | ||||||||||||||
| Net income attributable to Tenet Healthcare Corporation common shareholders | $ | 130 | $ | 13 | ||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | 49 | $ | 43 | ||||||||||||
| (1) | On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 6.9% during the three months ended December 31, 2017, with cases increasing 4.6% and revenue per case increasing 2.2%. |
| (2) | At December 31, 2017, 106 of the 333 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 227 facilities and account for these investments as consolidated subsidiaries |
| (3) | During the three months ended December 31, 2017, the Company recorded $22 million of noncontrolling interests expense on a tax benefit of $109 million, as a result of the reduction in the corporate income tax rate from 35% to 21%. |
|
TENET HEALTHCARE CORPORATION STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited) |
||||||||||||||||
| (Dollars in millions) | Years Ended December 31, | |||||||||||||||
| 2017 | 2016 | |||||||||||||||
|
Ambulatory |
Unconsolidated |
Ambulatory |
Unconsolidated |
|||||||||||||
| Net operating revenues: | ||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 1,978 | $ | 2,117 | $ | 1,833 | $ | 2,073 | ||||||||
| Less: Provision for doubtful accounts | (38 | ) | (41 | ) | (36 | ) | (53 | ) | ||||||||
| Net operating revenues(1) | 1,940 | 2,076 | 1,797 | 2,020 | ||||||||||||
| Equity in earnings of unconsolidated affiliates(2) | 140 | — | 122 | — | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries, wages and benefits | 623 | 483 | 594 | 477 | ||||||||||||
| Supplies | 398 | 540 | 365 | 520 | ||||||||||||
| Other operating expenses, net | 360 | 394 | 346 | 404 | ||||||||||||
| Electronic health record incentives | — | — | (1 | ) | — | |||||||||||
| Depreciation and amortization | 84 | 65 | 91 | 68 | ||||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 74 | 1 | 26 | 1 | ||||||||||||
| (Gains) losses on sales, consolidation and deconsolidation of facilities | (9 | ) | — | (33 | ) | 7 | ||||||||||
| Operating income | 550 | 593 | 531 | 543 | ||||||||||||
| Interest expense | (145 | ) | (22 | ) | (140 | ) | (24 | ) | ||||||||
| Other non-operating income (expense), net | 6 | (1 | ) | 2 | 6 | |||||||||||
| Income from continuing operations, before income taxes | 411 | 570 | 393 | 525 | ||||||||||||
| Income tax benefit (expense) | 15 | (9 | ) | (54 | ) | (8 | ) | |||||||||
| Net Income | 426 | $ | 561 | 339 | $ | 517 | ||||||||||
| Less: Net income attributable to noncontrolling interests(3) | 304 | 285 | ||||||||||||||
| Net income attributable to Tenet Healthcare Corporation common shareholders | $ | 122 | $ | 54 | ||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | 140 | $ | 122 | ||||||||||||
| (1) | On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 4.6% during the twelve months ended December 31, 2017, with cases increasing 0.6% and revenue per case increasing 3.9%. |
| (2) | At December 31, 2017, 106 of the 333 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 227 facilities and account for these investments as consolidated subsidiaries. |
| (3) | During the twelve months ended December 31, 2017, the Company recorded $22 million of noncontrolling interests expense on a tax benefit of $109 million, as a result of the reduction in the corporate income tax rate from 35% to 21%. During the twelve months ended December 31, 2016, the Company recorded $14 million of noncontrolling interests expense related to a $33 million gain on the consolidation of facilities (the gain is not included in Adjusted EBITDA) and an associated $7 million income tax benefit, net of $26 million of impairment and restructuring charges, and acquisition-related costs not included in Adjusted EBITDA. |
Non-GAAP Financial Measures
Adjusted EBITDA, a non-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) the cumulative effect of changes in accounting principle, (2) net loss (income) attributable to noncontrolling interests, (3) income (loss) from discontinued operations, (4) income tax benefit (expense), (5) other non-operating income (expense), net, (6) gain (loss) from early extinguishment of debt, (7) interest expense, (8) litigation and investigation (costs) benefit, net of insurance recoveries, (9) net gains (losses) on sales, consolidation and deconsolidation of facilities, (10) impairment and restructuring charges and acquisition-related costs, (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 (loss) from continuing operations attributable to Tenet Healthcare Corporation common shareholders, a non-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) impairment and restructuring charges, and acquisition-related costs, (2) litigation and investigation costs, (3) gains on sales, consolidation and deconsolidation of facilities, (4) gain (loss) from early extinguishment of debt, (5) income (loss) from divested operations and closed businesses, (6) the associated impact of these five items on taxes and noncontrolling interests, and (7) income (loss) from discontinued operations. Adjusted diluted earnings (loss) per share from continuing operations, a non-GAAP term, is defined by the Company as Adjusted net income (loss) from continuing operations attributable 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 Adjusted EBITDA to net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, is set forth in Table #1 below for the three and twelve months ended December 31, 2017 and 2016. A reconciliation of Adjusted net income from continuing operations attributable to Tenet Healthcare Corporation common shareholders to net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, is set forth in Table #2 below for the three and twelve months ended December 31, 2017 and 2016. A reconciliation of Free Cash Flow and Adjusted Free Cash Flow to net cash provided by (used in) operating activities, the most comparable GAAP measure, is set forth in Table #3 below for the three and twelve months ended December 31, 2017 and 2016.
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TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #1 – Reconciliation of Adjusted EBITDA to Net Loss Attributable to Tenet Healthcare Corporation Common Shareholders (Unaudited) |
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| (Dollars in millions) | Three Months Ended | Years Ended | ||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net loss attributable to Tenet Healthcare Corporation common shareholders | $ | (229 | ) | $ | (79 | ) | $ | (704 | ) | $ | (192 | ) | ||||
| Less: Net income attributable to noncontrolling interests | (130 | ) | (102 | ) | (384 | ) | (368 | ) | ||||||||
| Income (loss) from discontinued operations, net of tax | 1 | — | — | (5 | ) | |||||||||||
| Income (loss) from continuing operations | (100 | ) | 23 | (320 | ) | 181 | ||||||||||
| Income tax expense | (324 | ) | (6 | ) | (219 | ) | (67 | ) | ||||||||
| Loss from early extinguishment of debt | — | — | (164 | ) | — | |||||||||||
| Other non-operating expense, net | (8 | ) | (2 | ) | (22 | ) | (20 | ) | ||||||||
| Interest expense | (253 | ) | (249 | ) | (1,028 | ) | (979 | ) | ||||||||
| Operating income | 485 | 280 | 1,113 | 1,247 | ||||||||||||
| Litigation and investigation costs | (11 | ) | (2 | ) | (23 | ) | (293 | ) | ||||||||
| Gains on sales, consolidation and deconsolidation of facilities | 2 | — | 144 | 151 | ||||||||||||
| Impairment and restructuring charges, and acquisition-related costs | (138 | ) | (121 | ) | (541 | ) | (202 | ) | ||||||||
| Depreciation and amortization | (208 | ) | (218 | ) | (870 | ) | (850 | ) | ||||||||
| Loss from divested and closed businesses | — | (29 | ) | (41 | ) | (37 | ) | |||||||||
| Adjusted EBITDA | $ | 840 | $ | 650 | $ | 2,444 | $ | 2,478 | ||||||||
| Net operating revenues | $ | 4,978 | $ | 4,860 | $ | 19,179 | $ | 19,621 | ||||||||
| Less: Net operating revenues from health plans | 10 | 97 | 110 | 482 | ||||||||||||
| Adjusted net operating revenues | $ | 4,968 | $ | 4,763 | $ | 19,069 | $ | 19,139 | ||||||||
| Net loss attributable to Tenet Healthcare Corporation common shareholders as a % of net operating revenues | (4.6 | )% | (1.6 | )% | (3.7 | )% | (1.0 | )% | ||||||||
| Adjusted EBITDA as % of adjusted net operating revenues (Adjusted EBITDA margin) | 16.9 | % | 13.6 | % | 12.8 | % | 12.9 | % | ||||||||
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TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #2 – Pre-Tax, After-Tax and Earnings (Loss) Per Share Impact of Certain Items on Continuing Operations (Unaudited) |
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| Three Months Ended | Years Ended | |||||||||||||||
| (Dollars in millions except per share amounts) | December 31, | December 31, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Adjustments to calculate Adjusted Diluted EPS | ||||||||||||||||
| Impairment and restructuring charges, and acquisition-related costs(1) | $ | (138 | ) | $ | (121 | ) | $ | (541 | ) | $ | (202 | ) | ||||
| Litigation and investigation costs | (11 | ) | (2 | ) | (23 | ) | (293 | ) | ||||||||
| Gain on sales, consolidation and deconsolidation of facilities(2) | 2 | — | 144 | 151 | ||||||||||||
| Loss from early extinguishment of debt(3) | — | — | (164 | ) | — | |||||||||||
| Loss from divested and closed businesses | — | (28 | ) | (41 | ) | (39 | ) | |||||||||
| Pre-tax impact | (147 | ) | (151 | ) | (625 | ) | (383 | ) | ||||||||
| Tax impact of above items | 49 | 44 | 114 | 81 | ||||||||||||
| Tax reform adjustment | (252 | ) | — | (252 | ) | — | ||||||||||
| Total after-tax impact | (350 | ) | (107 | ) | (763 | ) | (302 | ) | ||||||||
| Noncontrolling interests impact(4) | (23 | ) | 5 | (23 | ) | (14 | ) | |||||||||
| Total loss from items above | $ | (373 | ) | $ | (102 | ) | $ | (786 | ) | $ | (316 | ) | ||||
| Net loss attributable to common shareholders | $ | (229 | ) | $ | (79 | ) | $ | (704 | ) | $ | (192 | ) | ||||
| Less income (loss) from discontinued operations, net of tax | 1 | — | — | (5 | ) | |||||||||||
| Loss from continuing operations, net of tax | (230 | ) | (79 | ) | (704 | ) | (187 | ) | ||||||||
| Loss from adjustments above | 373 | 102 | 786 | 316 | ||||||||||||
| Adjusted net income from continuing operations attributable to common shareholders | $ | 143 | $ | 23 | $ | 82 | $ | 129 | ||||||||
| Weighted average dilutive shares outstanding (in thousands) | 101,853 | 100,928 | 101,380 | 100,742 | ||||||||||||
| Diluted loss per share from continuing operations | $ | (2.28 | ) | $ | (0.79 | ) | $ | (7.00 | ) | $ | (1.88 | ) | ||||
| Adjusted diluted earnings per share from continuing operations | $ | 1.40 | $ | 0.23 | $ | 0.81 | $ | 1.28 | ||||||||
| (1) | Impairment and restructuring charges, and acquisition-related costs of $541 million in the year ended December 31, 2017 were primarily related to the write-down of assets held for sale in Chicago, Philadelphia and the United Kingdom to their estimated fair value less the estimated costs to sell. |
| (2) | Gain on sales, consolidation and deconsolidation of facilities of $144 million in the year ended December 31, 2017 was primarily related to a gain on sale of the Company’s former hospitals, physician practices and related assets in Houston, Texas. |
| (3) | Loss from early extinguishment of debt of $164 million in the year ended December 31, 2017 was related to the Company’s refinancing transactions and debt redemptions. |
| (4) | During the three months ended December 31, 2017, the Company recorded $22 million of noncontrolling interests expense on a tax benefit of $109 million, as a result of the reduction in the corporate income tax rate from 35% to 21%. |
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TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #3 – Reconciliations of Free Cash Flow and Adjusted Free Cash Flow (Unaudited) |
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| Three Months Ended | Years Ended | |||||||||||||||
| (Dollars in millions) | December 31, | December 31, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net cash provided by (used in) operating activities | $ | 491 | $ | (293 | ) | $ | 1,200 | $ | 558 | |||||||
| Purchases of property and equipment | (215 | ) | (261 | ) | (707 | ) | (875 | ) | ||||||||
| Free cash flow | $ | 276 | $ | (554 | ) | $ | 493 | $ | (317 | ) | ||||||
| Net cash provided by (used in) investing activities | $ | (206 | ) | $ | (280 | ) | $ | 21 | $ | (430 | ) | |||||
| Net cash provided by (used in) financing activities | $ | (103 | ) | $ | 640 | $ | (1,326 | ) | $ | 232 | ||||||
| Net cash provided by (used in) operating activities | $ | 491 | $ | (293 | ) | $ | 1,200 | $ | 558 | |||||||
| Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (37 | ) | (559 | ) | (125 | ) | (691 | ) | ||||||||
| Net cash used in operating activities from discontinued operations | (2 | ) | (7 | ) | (5 | ) | (6 | ) | ||||||||
| Adjusted net cash provided by operating activities – continuing operations | 530 | 273 | 1,330 | 1,255 | ||||||||||||
| Purchases of property and equipment – continuing operations | (215 | ) | (261 | ) | (707 | ) | (875 | ) | ||||||||
| Adjusted free cash flow – continuing operations | $ | 315 | $ | 12 | $ | 623 | $ | 380 | ||||||||
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TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #4 – Reconciliation of Outlook Adjusted EBITDA to Outlook Net Income (Loss) Attributable to Tenet Healthcare Corporation Common Shareholders (Unaudited) |
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| (Dollars in millions, except per share amounts) | Q1 2018 | 2018 | ||||||||||||||
| Low | High | Low | High | |||||||||||||
| Net income (loss) attributable to Tenet Healthcare Corporation common shareholders | $ | 45 | $ | 70 | $ | 90 | $ | 105 | ||||||||
| Less: Net income attributable to noncontrolling interests | (90 | ) | (100 | ) | (415 | ) | (435 | ) | ||||||||
| Loss from discontinued operations, net of tax | (5 | ) | — | (5 | ) | — | ||||||||||
| Income from continuing operations | 140 | 170 | 510 | 540 | ||||||||||||
| Income tax expense | (75 | ) | (80 | ) | (215 | ) | (220 | ) | ||||||||
| Income from continuing operations, before income taxes | 215 | 250 | 725 | 760 | ||||||||||||
| Interest expense | (250 | ) | (260 | ) | (1,000 | ) | (1,010 | ) | ||||||||
| Loss on early extinguishment of debt | — | — | (5 | ) | — | |||||||||||
| Other non-operating expense, net | (5 | ) | (5 | ) | (20 | ) | (25 | ) | ||||||||
| Operating income | 470 | 515 | 1,750 | 1,795 | ||||||||||||
| Gains on sales, consolidation and deconsolidation of facilities(1) | 100 | 120 | 100 | 120 | ||||||||||||
| Impairment and restructuring charges, acquisition-related costs and litigation costs and settlements(1) | (15 | ) | (25 | ) | (50 | ) | (100 | ) | ||||||||
| Depreciation and amortization | (195 | ) | (205 | ) | (790 | ) | (810 | ) | ||||||||
| Loss from divested and closed businesses | — | (5 | ) | (10 | ) | (15 | ) | |||||||||
| Adjusted EBITDA | $ | 580 | $ | 630 | $ | 2,500 | $ | 2,600 | ||||||||
| Income from continuing operations | $ | 50 | $ | 70 | $ | 95 | $ | 105 | ||||||||
| Income from continuing operations as a % of operating revenues | 1.1 | % | 1.5 | % | 0.5 | % | 0.6 | % | ||||||||
| Net operating revenues | $ | 4,450 | $ | 4,650 | $ | 17,900 | $ | 18,300 | ||||||||
| Adjusted EBITDA as % of adjusted net operating revenues (Adjusted EBITDA margin) | 13.0 | % | 13.5 | % | 14.0 | % | 14.2 | % | ||||||||
| Adjusted EBITDA | $ | 580 | $ | 630 | $ | 2,500 | $ | 2,600 | ||||||||
| Depreciation and amortization | (195 | ) | (205 | ) | (790 | ) | (810 | ) | ||||||||
| Interest expense | (250 | ) | (260 | ) | (1,000 | ) | (1,010 | ) | ||||||||
| Other non-operating expense, net | (5 | ) | (5 | ) | (20 | ) | (25 | ) | ||||||||
| Adjusted income from continuing operations before income taxes | 130 | 160 | 690 | 755 | ||||||||||||
| Income tax benefit (expense) | (50 | ) | (55 | ) | (200 | ) | (210 | ) | ||||||||
| Adjusted income from continuing operations | 80 | 105 | 490 | 545 | ||||||||||||
| Net income attributable to noncontrolling interests | (90 | ) | (100 | ) | (415 | ) | (435 | ) | ||||||||
| Adjusted net income (loss) from continuing operations attributable to common shareholders | $ | (10 | ) | $ | 5 | $ | 75 | $ | 110 | |||||||
| Basic weighted average shares outstanding (in millions) | 101 | 101 | 102 | 102 | ||||||||||||
| Fully diluted weighted average shares outstanding (in millions) | 102 | 102 | 103 | 103 | ||||||||||||
| Diluted earnings per share from continuing operations | $ | 0.49 | $ | 0.69 | $ | 0.92 | $ | 1.02 | ||||||||
| Adjusted diluted earnings (loss) per share from continuing operations | $ | (0.10 | ) | $ | 0.05 | $ | 0.73 | $ | 1.07 | |||||||
| (1) | The Company has provided an estimate of restructuring charges that it anticipates in 2018. The Company does not forecast impairment charges, acquisition-related costs and litigation costs and settlements, because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. Gains on sales, consolidation and deconsolidation of facilities includes only an estimate for the MacNeal and Baylor joint venture restructuring transactions, which are currently expected to close in the first quarter of 2018. |
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TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow for the Year Ending December 31, 2018 |
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| (Dollars in millions) | 2018 | |||||||||||||
| Low | High | |||||||||||||
| Net cash provided by operating activities | $ | 1,245 | $ | 1,450 | ||||||||||
| Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1) | (50 | ) | (100 | ) | ||||||||||
|
Net cash used in operating activities from discontinued operations |
(5 | ) | — | |||||||||||
| Adjusted net cash provided by operating activities – continuing operations | 1,300 | 1,550 | ||||||||||||
| Purchases of property and equipment – continuing operations | (625 | ) | (675 | ) | ||||||||||
| Adjusted free cash flow – continuing operations(2) | $ | 675 | $ | 875 | ||||||||||
| (1) | The Company has provided an estimate of payments that it anticipates in 2018 related to restructuring charges. The Company does not 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. |
