Tenet Reports Results for the Third Quarter Ended September 30, 2019

  • Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $233 million, or $2.25 per diluted share, in the third quarter of 2019, primarily due to a $180 million pre-tax loss, or $1.70 per diluted share, associated with the Company’s debt refinancing transaction in the third quarter of 2019 that reduces future annual cash interest payments and retired all significant debt maturities until April 2022.
  • Adjusted diluted earnings per share from continuing operations were $0.58 in the third quarter of 2019, above the high end of the Company’s Outlook.
  • Adjusted EBITDA for the third quarter of 2019 was $631 million, which was above the midpoint of the Company’s Outlook. Adjusted EBITDA consisted of $334 million in the Hospital Operations and other segment, $207 million in the Ambulatory Care segment and $90 million in the Conifer segment.
  • Hospital segment same-hospital net patient service revenues grew 5.8 percent in the third quarter of 2019: admissions increased 3.6 percent, adjusted admissions increased 2.8 percent and net revenue per adjusted admission increased 2.9 percent. Adjusted EBITDA in the hospital segment grew 7.1 percent.
  • Ambulatory Care segment same-facility system-wide surgical revenue grew 6.9 percent in the third quarter of 2019, with surgical cases up 4.4 percent and surgical revenue per case up 2.5 percent. Adjusted EBITDA less facility-level noncontrolling interest increased 17.5 percent.
  • Conifer’s Adjusted EBITDA grew 11.1 percent and margins increased 500 basis points to 26.8 percent.
  • Updating 2019 Outlook for net operating revenue, net income, earnings per share and Adjusted earnings per share; reiterating previously provided 2019 Outlook for Adjusted EBITDA and Adjusted Free Cash Flow.

DALLAS--()--Tenet Healthcare Corporation (NYSE: THC) today announced its results for the third quarter ended September 30, 2019.

Ronald A. Rittenmeyer, Executive Chairman and CEO, said, “We had a very positive third quarter with performance improvement in each of our operating segments. For the third consecutive quarter, our hospitals delivered accelerating volume growth and we generated strong results at both USPI and Conifer. In addition to driving improvements in our financial results, we made continued steady progress on many of the core initiatives we established for 2019 and discussed at the beginning of the year, including cost savings, physician recruitment, ambulatory acquisitions, marketing and board refreshment. We exceeded the midpoint of our Adjusted EBITDA Outlook in seven of the last eight quarters and exceeded the midpoint of our Adjusted EPS Outlook for eight consecutive quarters. While we have more to accomplish, we have established a solid foundation for growth and performance.”

Rittenmeyer continued, “We also completed a $4.2 billion debt refinancing and increased our line of credit borrowing capacity to $1.5 billion. These actions enhance our financial flexibility, reduce future interest payments and eliminate all significant debt maturities until April 2022.”

Results for the Quarter Ended September 30, 2019

Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $233 million, or $2.25 per diluted share, in the third quarter of 2019, primarily due to the debt refinancing mentioned above, compared to a net loss of $9 million, or $0.09 per diluted share, in the third quarter of 2018.

Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $61 million, or $0.58 per diluted share, in the third quarter of 2019, compared to $30 million, or $0.29 per diluted share, in the third quarter of 2018.

Adjusted EBITDA was $631 million in the third quarter of 2019 compared to $577 million in the third quarter of 2018, an increase of 9.4 percent. Results in the third quarter of 2019 included $8 million of additional expense in the Hospital Operations and other segment due to a decline in the treasury rate utilized to discount our actuarial liabilities compared to a $6 million benefit in the third quarter of 2018. The results for the quarter also included decreased revenue and additional expenses related to Hurricane Dorian as well as a one-time increase in contract labor due to a one-day strike by union nurses at 12 of our hospitals.

Reconciliations of GAAP net income available (loss attributable) to Tenet common shareholders to Adjusted net income available (loss attributable) from continuing operations, Adjusted diluted earnings (loss) per share from continuing operations and Adjusted EBITDA are contained in Tables #1 and #2 at the end of this release.

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $3.850 billion in the third quarter of 2019, up 2.3 percent from the third quarter of 2018. The increase in revenue was primarily due to revenue growth on a same-hospital basis, partially offset by hospital divestitures. Revenues included $58 million from the California Provider Fee program in the third quarter of 2019 compared to $71 million in the third quarter of 2018.

On a same-hospital basis, net patient service revenues were $3.562 billion in the third quarter of 2019, up 5.8 percent from the third quarter of 2018. Admissions increased 3.6 percent on a same-hospital basis, adjusted admissions increased 2.8 percent and revenue per adjusted admission increased 2.9 percent. Surgeries grew 0.8 percent and increased 3.2 percent including surgeries performed at a USPI facility located in one of Tenet’s hospital markets.

Adjusted EBITDA in Tenet’s hospital segment was $334 million in the third quarter of 2019, an increase of 7.1 percent compared to $312 million in the third quarter of 2018.

Selected operating expenses in the Hospital Operations and other segment increased just 2.3 percent on a per adjusted admission basis in the third quarter of 2019. Selected operating expenses include salaries, wages and benefits, supplies and other operating expenses and exclude the costs of the Company’s health plan businesses.

Ambulatory Care Segment

The Ambulatory Care segment produced net operating revenues of $522 million in the third quarter of 2019, an increase of 4.0 percent compared to $502 million in the third quarter of 2018.

After normalizing for the divestiture of Aspen Healthcare, the Company’s former business in the U.K. which was sold in the third quarter of 2018, the Ambulatory Care segment generated Adjusted EBITDA of $207 million in the third quarter of 2019, up 13.7 percent from $182 million in the third quarter of 2018, and Adjusted EBITDA less facility-level noncontrolling interest was $134 million, up 17.5 percent from $114 million in the third quarter of 2018. Aspen generated $21 million of revenue and $2 million of Adjusted EBITDA and Adjusted EBITDA less facility-level noncontrolling interest in the third quarter of 2018.

The results of many of the facilities in which the Ambulatory Care segment has an investment are not consolidated by Tenet (of the 348 facilities at September 30, 2019, the results of 111 were accounted for under the equity method for unconsolidated affiliates). To help analyze the segment’s results of operations, management uses system-wide measures, which include revenues and cases of both consolidated and unconsolidated facilities. On a same-facility system-wide basis, revenue in the Ambulatory Care segment increased 6.9 percent in the third quarter of 2019, with cases increasing 5.1 percent and revenue per case increasing 1.7 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 6.9 percent in the third quarter of 2019, with cases up 4.4 percent and revenue per case up 2.5 percent.

Conifer Segment

Conifer generated $90 million of Adjusted EBITDA in the third quarter of 2019, up 11.1 percent from $81 million in the third quarter of 2018. Adjusted EBITDA margins increased 500 basis points to 26.8 percent primarily due to our continuing cost reduction initiatives.

During the third quarter of 2019, Conifer’s revenue declined 9.4 percent to $336 million, from $371 million in the third quarter of 2018, primarily due to client attrition as a result of hospital divestitures by Tenet and other customers. Revenue from third-party customers declined 12.9 percent to $196 million in the third quarter of 2019.

Results for the Nine Months Ended September 30, 2019

Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $245 million, or $2.37 per diluted share, in the first nine months of 2019 compared to net income of $113 million, or $1.09 per diluted share, in the first nine months of 2018. The 2019 period includes a $227 million pre-tax loss from the extinguishment of debt, or $2.14 per diluted share, including the aforementioned $180 million pre-tax loss, or $1.70 per diluted share, recorded during the third quarter of 2019. The 2018 period included a $111 million pre-tax gain, or $0.84 per diluted share, from the sales, consolidation and deconsolidation of facilities.

Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $176 million, or $1.68 per diluted share, in the first nine months of 2019, compared to $140 million, or $1.35 per diluted share, in the first nine months of 2018.

Adjusted EBITDA was $1.901 billion in the first nine months of 2019 compared to $1.876 billion in the first nine months of 2018, an increase of $25 million or 1.3 percent. Items that lowered the year-over-year growth in Adjusted EBITDA included: (i) a $51 million year-over-year increase in expense due to a decline in the treasury rate used to discount the Company’s actuarial liabilities; and, (ii) the divestiture of Aspen Healthcare, which generated $16 million of Adjusted EBITDA in the first nine months of 2018.

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $11.539 billion in the first nine months of 2019, up 0.8 percent from the first nine months of 2018. Revenues included $187 million from the California Provider Fee program in the first nine months of 2019 compared to $198 million in the first nine months of 2018.

On a same-hospital basis, net patient service revenues were $10.666 billion in the first nine months of 2019, up 4.4 percent from the first nine months of 2018. Admissions increased 2.2 percent on a same-hospital basis in the first nine months of 2019, adjusted admissions increased 1.8 percent and revenue per adjusted admission increased 2.5 percent. Surgeries declined 1.0 percent and increased 1.2 percent including surgeries performed at a USPI facility located in one of Tenet’s hospital markets.

Adjusted EBITDA in Tenet’s hospital segment was $1.018 billion in the first nine months of 2019 compared to $1.059 billion in the first nine months of 2018. The $41 million decline was primarily due to a $51 million year-over-year increase in expense due to a decline in the treasury rate used to discount the Company’s actuarial liabilities.

Selected operating expenses in the Hospital Operations and other segment increased 3.3 percent on a per adjusted admission basis in the first nine months of 2019. Selected operating expenses include salaries, wages and benefits, supplies and other operating expenses and exclude the costs of the Company’s health plan businesses.

Ambulatory Care Segment

The Ambulatory Care segment produced net operating revenues of $1.526 billion in the first nine months of 2019, a decrease of 0.3 percent compared to $1.531 billion in the first nine months of 2018. The decline in revenue was due to the divestiture of Aspen Healthcare, which was completed in the third quarter of 2018. Aspen generated $117 million of revenue and $16 million of Adjusted EBITDA and Adjusted EBITDA less facility-level noncontrolling interest in the first nine months of 2018. After normalizing for the divestiture of Aspen, the Ambulatory Care segment generated Adjusted EBITDA of $591 million in the first nine months of 2019, up 11.3 percent from $531 million in the first nine months of 2018 and Adjusted EBITDA less facility-level noncontrolling interest was $378 million, up 12.2 percent from $337 million in the first nine months of 2018.

On a same-facility system-wide basis, revenue in the Ambulatory Care segment increased 5.5 percent in the first nine months of 2019, with cases increasing 3.1 percent and revenue per case increasing 2.3 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 5.5 percent in the first nine months of 2019, with cases up 3.3 percent and revenue per case up 2.1 percent.

Conifer Segment

Conifer generated $292 million of Adjusted EBITDA in the first nine months of 2019, up 8.1 percent from $270 million in the first nine months of 2018. Adjusted EBITDA margins increased 480 basis points to 28.1 percent.

During the first nine months of 2019, Conifer’s revenue declined 10.4 percent to $1.040 billion, from $1.161 billion in the first nine months of 2018 primarily due to client attrition as a result of hospital divestitures by Tenet and other customers. Revenue from third-party customers declined 15.7 percent to $608 million in the first nine months of 2019.

Cash Flow and Liquidity

Cash and cash equivalents were $314 million at September 30, 2019 compared to $249 million at June 30, 2019. The Company had $275 million of outstanding borrowings on its $1.5 billion credit line as of September 30, 2019. Accounts receivable days outstanding from continuing operations were 59.6 at September 30, 2019 compared to 58.4 at June 30, 2019; the increase was primarily due to a short-term disruption in collections in two markets following the consolidation of two local business offices, which is expected to reverse in future periods.

Net cash provided by operating activities was $713 million in the first nine months of 2019, representing an $86 million decrease compared to $799 million in the first nine months of 2018. This decline is due in part to $81 million of interest payments being accelerated into the three months ended September 30, 2019 from the fourth quarter of 2019 ($72 million) and the first quarter of 2020 ($9 million) as a result of our recent debt refinancing transaction. After subtracting $492 million and $404 million of capital expenditures in the first nine months of 2019 and 2018, respectively, Free Cash Flow was $221 million in the first nine months of 2019, a decrease of $174 million compared to Free Cash Flow of $395 million in the first nine months of 2018. Adjusted Free Cash Flow was $361 million in the first nine months of 2019, representing a $151 million decrease from $512 million of Adjusted Free Cash Flow in the first nine months of 2018.

Net cash used in investing activities was $426 million in the first nine months of 2019 compared to $120 million of net cash provided by investing activities in the first nine months of 2018. Results in the first nine months of 2019 included $113 million of proceeds from the sales of facilities, marketable securities, long-term investments and other assets compared to $663 million in the first nine months of 2018.

Net cash used in financing activities was $384 million in the first nine months of 2019 compared to $1.030 billion used in the first nine months of 2018 when the Company invested $630 million in cash to increase its ownership in USPI from 80 percent to 95 percent.

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

Outlook

The Company’s Outlook for 2019 includes:

  • Revenue of $18.350 billion to $18.550 billion,
  • Net loss from continuing operations attributable to Tenet common shareholders of $135 million to $230 million,
  • Adjusted EBITDA of $2.650 billion to $2.750 billion,
  • Net cash provided by operating activities of $1.045 billion to $1.325 billion,
  • Adjusted Free Cash Flow of $600 million to $800 million,
  • Diluted loss per share from continuing operations of $1.31 to $2.23, and
  • Adjusted diluted earnings per share from continuing operations of $2.25 to $2.91.

The Outlook for 2019 assumes California Provider Fee revenues of approximately $246 million, equity in earnings of unconsolidated affiliates of $170 million to $180 million, depreciation and amortization expense of $830 million to $840 million, interest expense of $985 million to $995 million, net income available to noncontrolling interests of $390 million to $410 million and an average diluted share count of 105 million.

The Company’s Outlook for the fourth quarter of 2019 includes:

  • Revenue of $4.678 billion to $4.878 billion,
  • Net income from continuing operations available to Tenet common shareholders of $15 million to $110 million,
  • Adjusted EBITDA of $749 million to $849 million,
  • Diluted earnings per share from continuing operations of $0.14 to $1.04, and
  • Adjusted diluted earnings per share from continuing operations of $0.57 to $1.23.

The Outlook for the fourth quarter assumes California Provider Fee revenues of approximately $59 million, equity in earnings of unconsolidated affiliates of $56 million to $66 million, depreciation and amortization expense of $203 million to $213 million, interest expense of $243 million to $253 million, net income available to noncontrolling interests of $131 million to $151 million, and an average diluted share count of 106 million.

Additional details on Tenet’s Outlook for both the fourth quarter and calendar year 2019 are available in Tables #4, #5 and #6 at the end of this press release and in an accompanying slide presentation that will be accessible through the Company’s website at www.tenethealth.com/investors.

Management’s Webcast Discussion of Third Quarter Results

Tenet management will discuss the Company’s third quarter 2019 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on November 5, 2019. Investors can access the webcast through the Company’s website at www.tenethealth.com/investors. A set of slides, which will be referred to on the conference call, will be available on the Company’s website.

Additional information regarding Tenet’s quarterly results of operations is contained in its Form 10-Q report for the period ended September 30, 2019, which will be filed with the Securities and Exchange Commission and posted on the Company’s website.

This press release includes certain non-GAAP measures, such as Adjusted EBITDA, Adjusted net income available (loss attributable) from continuing operations to Tenet common shareholders, Adjusted diluted earnings per share from continuing operations, Free Cash Flow and Adjusted Free Cash Flow. Reconciliations of these measures to the most comparable GAAP measures are contained in the tables at the end of this release.

About Tenet Healthcare

Tenet Healthcare Corporation (NYSE: THC) is a diversified healthcare services company headquartered in Dallas with 110,000 employees. Through an expansive care network that includes United Surgical Partners International, we operate 65 hospitals and approximately 500 other healthcare facilities, including surgical hospitals, ambulatory surgery centers, urgent care and imaging centers and other care sites and clinics. We also operate Conifer Health Solutions, which provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other customers. Across the Tenet enterprise, we are united by our mission to deliver quality, compassionate care in the communities we serve. For more information, please visit www.tenethealth.com.

This release contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “assume,” “believe,” “budget,” “estimate,” “forecast,” “intend,” “plan,” “predict,” “project,” “seek,” “see,” “target,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, but are not limited to, the factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2018, and subsequent Form 10-Q filings and other filings with the Securities and Exchange Commission.

 

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions except per share amounts)

 

Three Months Ended September 30,

 

 

2019

 

%

 

2018

 

%

 

Change

Net operating revenues

 

$

4,568

 

 

100.0

%

 

$

4,489

 

 

100.0

%

 

1.8

%

Equity in earnings of unconsolidated affiliates

 

38

 

 

0.8

%

 

33

 

 

0.7

%

 

15.2

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

2,174

 

 

47.7

%

 

2,116

 

 

47.1

%

 

2.7

%

Supplies

 

760

 

 

16.6

%

 

726

 

 

16.2

%

 

4.7

%

Other operating expenses, net

 

1,042

 

 

22.8

%

 

1,094

 

 

24.4

%

 

(4.8

)%

Electronic health record incentives

 

 

 

%

 

 

 

%

 

%

Depreciation and amortization

 

205

 

 

4.5

%

 

204

 

 

4.5

%

 

 

Impairment and restructuring charges, and acquisition-related costs

 

46

 

 

1.0

%

 

46

 

 

1.0

%

 

 

Litigation and investigation costs

 

84

 

 

1.8

%

 

9

 

 

0.2

%

 

 

Net losses on sales, consolidation and deconsolidation of facilities

 

1

 

 

%

 

7

 

 

0.2

%

 

 

Operating income

 

294

 

 

6.4

%

 

320

 

 

7.1

%

 

 

Interest expense

 

(244

)

 

 

 

(249

)

 

 

 

 

Other non-operating expense, net

 

(3

)

 

 

 

 

 

 

 

 

Loss from early extinguishment of debt

 

(180

)

 

 

 

 

 

 

 

 

Income (loss) from continuing operations, before income taxes

 

(133

)

 

 

 

71

 

 

 

 

 

Income tax expense

 

(20

)

 

 

 

(6

)

 

 

 

 

Income (loss) from continuing operations, before discontinued operations

 

(153

)

 

 

 

65

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

Income from operations

 

1

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations

 

1

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(152

)

 

 

 

65

 

 

 

 

 

Less: Net income available to noncontrolling interests

 

80

 

 

 

 

74

 

 

 

 

 

Net loss attributable to Tenet Healthcare Corporation common

shareholders

 

$

(232

)

 

 

 

$

(9

)

 

 

 

 

Amounts attributable to Tenet Healthcare Corporation common

shareholders

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations, net of tax

 

$

(233

)

 

 

 

$

(9

)

 

 

 

 

Income from discontinued operations, net of tax

 

1

 

 

 

 

 

 

 

 

 

Net loss attributable to Tenet Healthcare Corporation common shareholders

 

$

(232

)

 

 

 

$

(9

)

 

 

 

 

Earnings (loss) per share available to Tenet Healthcare Corporation common shareholders:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.25

)

 

 

 

$

(0.09

)

 

 

 

 

Discontinued operations

 

0.01

 

 

 

 

 

 

 

 

 

 

 

$

(2.24

)

 

 

 

$

(0.09

)

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.25

)

 

 

 

$

(0.09

)

 

 

 

 

Discontinued operations

 

0.01

 

 

 

 

 

 

 

 

 

 

 

$

(2.24

)

 

 

 

$

(0.09

)

 

 

 

 

Weighted average shares and dilutive securities outstanding

(in thousands):

 

 

 

 

 

 

 

 

 

 

Basic

 

103,558

 

 

 

 

102,402

 

 

 

 

Diluted*

 

103,558

 

 

 

 

102,402

 

 

 

 

 *

Had we generated income from continuing operations available to common shareholders in the three months ended September 30, 2019 and 2018 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,024 thousand and 2,173 thousand shares, respectively.

 

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions except per share amounts)

 

Nine Months Ended September 30,

 

 

2019

 

%

 

2018

 

%

 

Change

Net operating revenues

 

$

13,673

 

 

100.0

%

 

$

13,694

 

 

100.0

%

 

(0.2

)%

Equity in earnings of unconsolidated affiliates

 

114

 

 

0.8

%

 

97

 

 

0.7

%

 

17.5

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

6,475

 

 

47.4

%

 

6,478

 

 

47.3

%

 

0.0

%

Supplies

 

2,254

 

 

16.5

%

 

2,248

 

 

16.4

%

 

0.3

%

Other operating expenses, net

 

3,160

 

 

23.1

%

 

3,181

 

 

23.2

%

 

(0.7

)%

Electronic health record incentives

 

(1

)

 

%

 

(1

)

 

%

 

%

Depreciation and amortization

 

627

 

 

4.6

%

 

602

 

 

4.4

%

 

 

Impairment and restructuring charges, and acquisition-related costs

 

101

 

 

0.7

%

 

123

 

 

0.9

%

 

 

Litigation and investigation costs

 

115

 

 

0.8

%

 

28

 

 

0.2

%

 

 

Net losses (gains) on sales, consolidation and deconsolidation of facilities

 

3

 

 

%

 

(111

)

 

(0.8

)%

 

 

Operating income

 

1,053

 

 

7.7

%

 

1,243

 

 

9.1

%

 

 

Interest expense

 

(742

)

 

 

 

(758

)

 

 

 

 

Other non-operating expense, net

 

(3

)

 

 

 

(2

)

 

 

 

 

Loss from early extinguishment of debt

 

(227

)

 

 

 

(2

)

 

 

 

 

Income from continuing operations, before income taxes

 

81

 

 

 

 

481

 

 

 

 

 

Income tax expense

 

(67

)

 

 

 

(120

)

 

 

 

 

Income from continuing operations, before discontinued operations

 

14

 

 

 

 

361

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

Income from operations

 

13

 

 

 

 

3

 

 

 

 

 

Income tax expense

 

(2

)

 

 

 

 

 

 

 

 

Income from discontinued operations

 

11

 

 

 

 

3

 

 

 

 

 

Net income

 

25

 

 

 

 

364

 

 

 

 

 

Less: Net income available to noncontrolling interests

 

259

 

 

 

 

248

 

 

 

 

 

Net income available (loss attributable) to Tenet Healthcare Corporation

common shareholders

 

$

(234

)

 

 

 

$

116

 

 

 

 

 

Amounts available (attributable) to Tenet Healthcare Corporation

common shareholders

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations, net of tax

 

$

(245

)

 

 

 

$

113

 

 

 

 

 

Income from discontinued operations, net of tax

 

11

 

 

 

 

3

 

 

 

 

 

Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders

 

$

(234

)

 

 

 

$

116

 

 

 

 

 

Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.37

)

 

 

 

$

1.11

 

 

 

 

 

Discontinued operations

 

0.11

 

 

 

 

0.03

 

 

 

 

 

 

 

$

(2.26

)

 

 

 

$

1.14

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.37

)

 

 

 

$

1.09

 

 

 

 

 

Discontinued operations

 

0.11

 

 

 

 

0.03

 

 

 

 

 

 

 

$

(2.26

)

 

 

 

$

1.12

 

 

 

 

 

Weighted average shares and dilutive securities outstanding

(in thousands):

 

 

 

 

 

 

 

 

 

 

Basic

 

103,181

 

 

 

 

101,980

 

 

 

 

Diluted*

 

103,181

 

 

 

 

103,802

 

 

 

 

 *

Had we generated income from continuing operations available to common shareholders in the nine months ended September 30, 2019 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,403 thousand shares.

 

TENET HEALTHCARE CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

 

 

 

September 30,

 

December 31,

(Dollars in millions)

 

2019

 

2018

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

314

 

 

$

411

 

Accounts receivable

 

2,768

 

 

2,595

 

Inventories of supplies, at cost

 

311

 

 

305

 

Income tax receivable

 

18

 

 

21

 

Assets held for sale

 

 

 

107

 

Other current assets

 

1,378

 

 

1,197

 

Total current assets

 

4,789

 

 

4,636

 

Investments and other assets

 

2,380

 

 

1,456

 

Deferred income taxes

 

252

 

 

312

 

Property and equipment, at cost, less accumulated depreciation and amortization

 

7,001

 

 

6,993

 

Goodwill

 

7,315

 

 

7,281

 

Other intangible assets, at cost, less accumulated amortization

 

1,620

 

 

1,731

 

Total assets

 

$

23,357

 

 

$

22,409

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of long-term debt

 

$

165

 

 

$

182

 

Accounts payable

 

1,125

 

 

1,207

 

Accrued compensation and benefits

 

842

 

 

838

 

Professional and general liability reserves

 

230

 

 

216

 

Accrued interest payable

 

252

 

 

240

 

Liabilities held for sale

 

 

 

43

 

Other current liabilities

 

1,314

 

 

1,131

 

Total current liabilities

 

3,928

 

 

3,857

 

Long-term debt, net of current portion

 

14,858

 

 

14,644

 

Professional and general liability reserves

 

671

 

 

666

 

Defined benefit plan obligations

 

495

 

 

521

 

Deferred income taxes

 

36

 

 

36

 

Other long-term liabilities

 

1,405

 

 

578

 

Total liabilities

 

21,393

 

 

20,302

 

Commitments and contingencies

 

 

 

 

Redeemable noncontrolling interests in equity of consolidated subsidiaries

 

1,475

 

 

1,420

 

Equity:

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock

 

7

 

 

7

 

Additional paid-in capital

 

4,751

 

 

4,747

 

Accumulated other comprehensive loss

 

(216

)

 

(223

)

Accumulated deficit

 

(2,469

)

 

(2,236

)

Common stock in treasury, at cost

 

(2,414

)

 

(2,414

)

Total shareholders’ deficit

 

(341

)

 

(119

)

Noncontrolling interests

 

830

 

 

806

 

Total equity

 

489

 

 

687

 

Total liabilities and equity

 

$

23,357

 

 

$

22,409

 

 

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

Nine Months Ended

(Dollars in millions)

 

September 30,

 

 

2019

 

2018

Net income

 

$

25

 

 

$

364

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

627

 

 

602

 

Deferred income tax expense

 

57

 

 

110

 

Stock-based compensation expense

 

34

 

 

34

 

Impairment and restructuring charges, and acquisition-related costs

 

101

 

 

123

 

Litigation and investigation costs

 

115

 

 

28

 

Net losses (gains) on sales, consolidation and deconsolidation of facilities

 

3

 

 

(111

)

Loss from early extinguishment of debt

 

227

 

 

2

 

Equity in earnings of unconsolidated affiliates, net of distributions received

 

(6

)

 

9

 

Amortization of debt discount and debt issuance costs

 

25

 

 

33

 

Pre-tax income from discontinued operations

 

(13

)

 

(3

)

Other items, net

 

(14

)

 

(22

)

Changes in cash from operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(174

)

 

(36

)

Inventories and other current assets

 

(98

)

 

73

 

Income taxes

 

(4

)

 

(14

)

Accounts payable, accrued expenses and other current liabilities

 

(37

)

 

(194

)

Other long-term liabilities

 

(15

)

 

(82

)

Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements

 

(136

)

 

(113

)

Net cash used in operating activities from discontinued operations, excluding income taxes

 

(4

)

 

(4

)

Net cash provided by operating activities

 

713

 

 

799

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment — continuing operations

 

(492

)

 

(404

)

Purchases of businesses or joint venture interests, net of cash acquired

 

(23

)

 

(97

)

Proceeds from sales of facilities and other assets — continuing operations

 

44

 

 

498

 

Proceeds from sales of facilities and other assets — discontinued operations

 

17

 

 

 

Proceeds from sales of marketable securities, long-term investments and other assets

 

52

 

 

165

 

Purchases of equity investments

 

(14

)

 

(43

)

Other long-term assets

 

1

 

 

5

 

Other items, net

 

(11

)

 

(4

)

Net cash provided by (used in) investing activities

 

(426

)

 

120

 

Cash flows from financing activities:

 

 

 

 

Repayments of borrowings under credit facility

 

(1,880

)

 

(505

)

Proceeds from borrowings under credit facility

 

2,155

 

 

505

 

Repayments of other borrowings

 

(6,084

)

 

(238

)

Proceeds from other borrowings

 

5,718

 

 

15

 

Debt issuance costs

 

(63

)

 

 

Distributions paid to noncontrolling interests

 

(223

)

 

(217

)

Proceeds from sales of noncontrolling interests

 

15

 

 

14

 

Purchases of noncontrolling interests

 

(8

)

 

(643

)

Proceeds from exercise of stock options and employee stock purchase plan

 

4

 

 

15

 

Other items, net

 

(18

)

 

24

 

Net cash used in financing activities

 

(384

)

 

(1,030

)

Net decrease in cash and cash equivalents

 

(97

)

 

(111

)

Cash and cash equivalents at beginning of period

 

411

 

 

611

 

Cash and cash equivalents at end of period

 

$

314

 

 

$

500

 

Supplemental disclosures:

 

 

 

 

Interest paid, net of capitalized interest

 

$

(705

)

 

$

(652

)

Income tax payments, net

 

$

(18

)

 

$

(24

)

 

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions except per adjusted patient day

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

and per adjusted patient admission amounts)

 

2019

 

2018

 

Change

 

2019

 

2018

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Admissions, Patient Days and Surgeries

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of hospitals (at end of period)

 

65

 

 

68

 

 

(3

)

*

65

 

 

68

 

 

(3

)

*

Total admissions

 

170,004

 

 

168,201

 

 

1.1

%

 

514,082

 

 

518,960

 

 

(0.9

)%

 

Adjusted patient admissions

 

306,535

 

 

306,197

 

 

0.1

%

 

918,734

 

 

933,128

 

 

(1.5

)%

 

Paying admissions (excludes charity and uninsured)

 

159,299

 

 

157,193

 

 

1.3

%

 

483,220

 

 

487,899

 

 

(1.0

)%

 

Charity and uninsured admissions

 

10,705

 

 

11,008

 

 

(2.8

)%

 

30,862

 

 

31,061

 

 

(0.6

)%

 

Admissions through emergency department

 

120,915

 

 

116,727

 

 

3.6

%

 

368,082

 

 

356,839

 

 

3.2

%

 

Paying admissions as a percentage of total admissions

 

93.7

%

 

93.5

%

 

0.2

%

*

94.0

%

 

94.0

%

 

%

*

Charity and uninsured admissions as a percentage of total admissions

 

6.3

%

 

6.5

%

 

(0.2

)%

*

6.0

%

 

6.0

%

 

%

*

Emergency department admissions as a percentage of total admissions

 

71.1

%

 

69.4

%

 

1.7

%

*

71.6

%

 

68.8

%

 

2.8

%

*

Surgeries — inpatient

 

45,637

 

 

45,626

 

 

%

 

135,073

 

 

139,123

 

 

(2.9

)%

 

Surgeries — outpatient

 

60,099

 

 

61,468

 

 

(2.2

)%

 

179,253

 

 

188,281

 

 

(4.8

)%

 

Total surgeries

 

105,736

 

 

107,094

 

 

(1.3

)%

 

314,326

 

 

327,404

 

 

(4.0

)%

 

Patient days — total

 

782,643

 

 

761,920

 

 

2.7

%

 

2,392,304

 

 

2,387,087

 

 

0.2

%

 

Adjusted patient days

 

1,381,862

 

 

1,365,662

 

 

1.2

%

 

4,189,961

 

 

4,225,281

 

 

(0.8

)%

 

Average length of stay (days)

 

4.60

 

 

4.53

 

 

1.5

%

 

4.65

 

 

4.60

 

 

1.1

%

 

Licensed beds (at end of period)

 

17,206

 

 

18,302

 

 

(6.0

)%

 

17,206

 

 

18,302

 

 

(6.0

)%

 

Average licensed beds

 

17,208

 

 

18,302

 

 

(6.0

)%

 

17,295

 

 

18,450

 

 

(6.3

)%

 

Utilization of licensed beds

 

49.4

%

 

45.3

%

 

4.1

%

*

50.7

%

 

47.4

%

 

3.3

%

*

Outpatient Visits

 

 

 

 

 

 

 

 

 

 

 

 

 

Total visits

 

1,673,801

 

 

1,722,292

 

 

(2.8

)%

 

5,081,998

 

 

5,314,678

 

 

(4.4

)%

 

Paying visits (excludes charity and uninsured)

 

1,562,007

 

 

1,607,184

 

 

(2.8

)%

 

4,747,249

 

 

4,966,532

 

 

(4.4

)%

 

Charity and uninsured visits

 

111,794

 

 

115,108

 

 

(2.9

)%

 

334,749

 

 

348,146

 

 

(3.8

)%

 

Emergency department visits

 

627,055

 

 

638,248

 

 

(1.8

)%

 

1,921,611

 

 

1,978,285

 

 

(2.9

)%

 

Paying visits as a percentage of total visits

 

93.3

%

 

93.3

%

 

%

*

93.4

%

 

93.4

%

 

%

*

Charity and uninsured visits as a percentage of total visits

 

6.7

%

 

6.7

%

 

%

*

6.6

%

 

6.6

%

 

%

*

Total emergency department admissions and visits

 

747,970

 

 

754,975

 

 

(0.9

)%

 

2,289,693

 

 

2,335,124

 

 

(1.9

)%

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Net patient service revenues(3)

 

$

3,566

 

 

$

3,434

 

 

3.8

%

 

$

10,695

 

 

$

10,520

 

 

1.7

%

 

Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis

 

 

 

 

 

 

 

 

 

 

 

 

 

Net patient service revenue(3) per adjusted patient admission

 

$

11,633

 

 

$

11,215

 

 

3.7

%

 

$

11,641

 

 

$

11,274

 

 

3.3

%

 

Net patient service revenue(3) per adjusted patient day

 

$

2,581

 

 

$

2,515

 

 

2.6

%

 

$

2,553

 

 

$

2,490

 

 

2.5

%

 

Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)

 

$

11,021

 

 

$

10,771

 

 

2.3

%

 

$

10,996

 

 

$

10,648

 

 

3.3

%

 

Net patient service revenues(3) from:

 

 

 

 

 

 

 

 

 

 

 

 

 

Medicare

 

19.6

%

 

19.8

%

 

(0.2

)%

*

20.4

%

 

20.6

%

 

(0.2

)%

*

Medicaid

 

8.0

%

 

9.8

%

 

(1.8

)%

*

8.6

%

 

9.2

%

 

(0.6

)%

*

Managed care

 

66.1

%

 

64.9

%

 

1.2

%

*

65.8

%

 

65.3

%

 

0.5

%

*

Uninsured

 

1.2

%

 

0.9

%

 

0.3

%

*

0.5

%

 

0.7

%

 

(0.2

)%

*

Indemnity and other

 

5.1

%

 

4.6

%

 

0.5

%

*

4.7

%

 

4.2

%

 

0.5

%

*

 (1)

Represents the consolidated results of Tenet’s acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.

 (2)

Excludes operating expenses from Tenet’s health plans.

 (3)

Less implicit price concessions.
* This change is the difference between the 2019 and 2018 amounts shown.

 

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions except per adjusted patient day

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

and per adjusted patient admission amounts)

 

2019

 

2018

 

Change

 

2019

 

2018

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Admissions, Patient Days and Surgeries

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of hospitals (at end of period)

 

65

 

 

65

 

 

 

 

65

 

 

65

 

 

 

*

Total admissions

 

170,004

 

 

164,075

 

 

3.6

%

 

512,826

 

 

501,662

 

 

2.2

%

 

Adjusted patient admissions

 

306,535

 

 

298,221

 

 

2.8

%

 

916,472

 

 

899,826

 

 

1.8

%

 

Paying admissions (excludes charity and uninsured)

 

159,300

 

 

153,227

 

 

4.0

%

 

482,061

 

 

471,282

 

 

2.3

%

 

Charity and uninsured admissions

 

10,704

 

 

10,848

 

 

(1.3

)%

 

30,765

 

 

30,380

 

 

1.3

%

 

Admissions through emergency department

 

120,915

 

 

113,833

 

 

6.2

%

 

367,231

 

 

345,692

 

 

6.2

%

 

Paying admissions as a percentage of total admissions

 

93.7

%

 

93.4

%

 

0.3

%

 

94.0

%

 

93.9

%

 

0.1

%

*

Charity and uninsured admissions as a percentage of total admissions

 

6.3

%

 

6.6

%

 

(0.3

)%

 

6.0

%

 

6.1

%

 

(0.1

)%

*

Emergency department admissions as a percentage of total admissions

 

71.1

%

 

69.4

%

 

1.7

%

 

71.6

%

 

68.9

%

 

2.7

%

*

Surgeries — inpatient

 

45,637

 

 

44,783

 

 

1.9

%

 

134,831

 

 

135,026

 

 

(0.1

)%

 

Surgeries — outpatient

 

60,099

 

 

60,080

 

 

%

 

178,931

 

 

182,005

 

 

(1.7

)%

 

Total surgeries

 

105,736

 

 

104,863

 

 

0.8

%

 

313,762

 

 

317,031

 

 

(1.0

)%

 

Patient days — total

 

782,643

 

 

740,870

 

 

5.6

%

 

2,385,554

 

 

2,301,312

 

 

3.7

%

 

Adjusted patient days

 

1,381,862

 

 

1,325,229

 

 

4.3

%

 

4,177,844

 

 

4,060,712

 

 

2.9

%

 

Average length of stay (days)

 

4.60

 

 

4.52

 

 

1.8

%

 

4.65

 

 

4.59

 

 

1.3

%

 

Licensed beds (at end of period)

 

17,206

 

 

17,234

 

 

(0.2

)%

 

17,206

 

 

17,234

 

 

(0.2

)%

 

Average licensed beds

 

17,208

 

 

17,234

 

 

(0.2

)%

 

17,217

 

 

17,242

 

 

(0.1

)%

 

Utilization of licensed beds

 

49.4

%

 

46.7

%

 

2.7

%

 

50.8

%

 

48.9

%

 

1.9

%

*

Outpatient Visits

 

 

 

 

 

 

 

 

 

 

 

 

 

Total visits

 

1,673,801

 

 

1,647,013

 

 

1.6

%

 

5,054,470

 

 

5,036,965

 

 

0.3

%

 

Paying visits (excludes charity and uninsured)

 

1,562,010

 

 

1,536,247

 

 

1.7

%

 

4,721,200

 

 

4,704,391

 

 

0.4

%

 

Charity and uninsured visits

 

111,791

 

 

110,766

 

 

0.9

%

 

333,270

 

 

332,574

 

 

0.2

%

 

Emergency department visits

 

627,055

 

 

617,925

 

 

1.5

%

 

1,916,014

 

 

1,904,545

 

 

0.6

%

 

Paying visits as a percentage of total visits

 

93.3

%

 

93.3

%

 

%

 

93.4

%

 

93.4

%

 

%

*

Charity and uninsured visits as a percentage of total visits

 

6.7

%

 

6.7

%

 

%

 

6.6

%

 

6.6

%

 

%

*

Total emergency department admissions and visits

 

747,970

 

 

731,758

 

 

2.2

%

 

2,283,245

 

 

2,250,237

 

 

1.5

%

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Net patient service revenues(2)

 

$

3,562

 

 

$

3,367

 

 

5.8

%

 

$

10,666

 

 

$

10,217

 

 

4.4

%

 

Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis

 

 

 

 

 

 

 

 

 

 

 

 

 

Net patient service revenue(2) per adjusted patient admission

 

$

11,620

 

 

$

11,290

 

 

2.9

%

 

$

11,638

 

 

$

11,354

 

 

2.5

%

 

Net patient service revenue(2) per adjusted patient day

 

$

2,578

 

 

$

2,541

 

 

1.5

%

 

$

2,553

 

 

$

2,516

 

 

1.5

%

 

Net patient service revenues(2) from:

 

 

 

 

 

 

 

 

 

 

 

 

 

Medicare

 

19.5

%

 

19.5

%

 

%

 

20.2

%

 

20.2

%

 

%

*

Medicaid

 

8.0

%

 

9.8

%

 

(1.8

)%

 

8.6

%

 

9.1

%

 

(0.5

)%

*

Managed care

 

66.2

%

 

65.2

%

 

1.0

%

 

65.9

%

 

65.6

%

 

0.3

%

*

Uninsured

 

1.2

%

 

0.9

%

 

0.3

%

 

0.5

%

 

0.8

%

 

(0.3

)%

*

Indemnity and other

 

5.1

%

 

4.6

%

 

0.5

%

 

4.8

%

 

4.3

%

 

0.5

%

*

 (1)

Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the nine months ended September 30, 2019 and 2018 and associated outpatient facilities, but excludes the results of hospitals Tenet divested since January 1, 2018.

 (2)

Less implicit price concessions.

 * This change is the difference between the 2019 and 2018 amounts shown.
 

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

(Dollars in millions except per share amounts)

 

Three Months Ended

 

Nine Months Ended

 

 

3/31/2019

 

6/30/2019

 

9/30/2019

 

9/30/2019

Net operating revenues

 

$

4,545

 

 

$

4,560

 

 

$

4,568

 

 

$

13,673

 

Equity in earnings of unconsolidated affiliates

 

34

 

 

42

 

 

38

 

 

114

 

Operating expenses:

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

2,153

 

 

2,148

 

 

2,174

 

 

6,475

 

Supplies

 

741

 

 

753

 

 

760

 

 

2,254

 

Other operating expenses, net

 

1,074

 

 

1,044

 

 

1,042

 

 

3,160

 

Electronic health record incentives

 

(1

)

 

 

 

 

 

(1

)

Depreciation and amortization

 

208

 

 

214

 

 

205

 

 

627

 

Impairment and restructuring charges, and acquisition-related costs

 

19

 

 

36

 

 

46

 

 

101

 

Litigation and investigation costs

 

13

 

 

18

 

 

84

 

 

115

 

Net losses on sales, consolidation and deconsolidation of facilities

 

1

 

 

1

 

 

1

 

 

3

 

Operating income

 

371

 

 

388

 

 

294

 

 

1,053

 

Interest expense

 

(251

)

 

(247

)

 

(244

)

 

(742

)

Other non-operating income (expense), net

 

1

 

 

(1

)

 

(3

)

 

(3

)

Loss from early extinguishment of debt

 

(47

)

 

 

 

(180

)

 

(227

)

Income (loss) from continuing operations, before income taxes

 

74

 

 

140

 

 

(133

)

 

81

 

Income tax expense

 

(17

)

 

(30

)

 

(20

)

 

(67

)

Income (loss) from continuing operations, before discontinued

operations

 

57

 

 

110

 

 

(153

)

 

14

 

Discontinued operations:

 

 

 

 

 

 

 

 

Income from operations

 

10

 

 

2

 

 

1

 

 

13

 

Income tax expense

 

(2

)

 

 

 

 

 

(2

)

Income from discontinued operations

 

8

 

 

2

 

 

1

 

 

11

 

Net income (loss)

 

65

 

 

112

 

 

(152

)

 

25

 

Less: Net income available to noncontrolling interests

 

84

 

 

95

 

 

80

 

 

259

 

Net income available (loss attributable) to Tenet Healthcare Corporation

common shareholders

 

$

(19

)

 

$

17

 

 

$

(232

)

 

$

(234

)

Amounts available (attributable) to Tenet Healthcare Corporation

common shareholders

 

 

 

 

 

 

 

 

Income (loss) from continuing operations, net of tax

 

$

(27

)

 

$

15

 

 

$

(233

)

 

$

(245

)

Income from discontinued operations, net of tax

 

8

 

 

2

 

 

1

 

 

11

 

Net income available (loss attributable) to Tenet Healthcare

Corporation common shareholders

 

$

(19

)

 

$

17

 

 

$

(232

)

 

$

(234

)

Earnings (loss) per share available (attributable) to Tenet Healthcare

Corporation common shareholders:

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.26

)

 

$

0.15

 

 

$

(2.25

)

 

$

(2.37

)

Discontinued operations

 

0.08

 

 

0.02

 

 

0.01

 

 

0.11

 

 

 

$

(0.18

)

 

$

0.17

 

 

$

(2.24

)

 

$

(2.26

)

Diluted

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.26

)

 

$

0.14

 

 

$

(2.25

)

 

$

(2.37

)

Discontinued operations

 

0.08

 

 

0.02

 

 

0.01

 

 

0.11

 

 

 

$

(0.18

)

 

$

0.16

 

 

$

(2.24

)

 

$

(2.26

)

Weighted average shares and dilutive securities outstanding

(in thousands):

 

 

 

 

 

 

 

 

Basic

 

102,788

 

 

103,198

 

 

103,558

 

 

103,181

 

Diluted

 

102,788

 

 

104,629

 

 

103,558

 

 

103,181

 

 

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions except per share amounts)

 

Three Months Ended

 

Year Ended

 

 

3/31/2018

 

6/30/2018

 

9/30/2018

 

12/31/2018

 

12/31/2018

Net operating revenues

 

$

4,699

 

 

$

4,506

 

 

$

4,489

 

 

$

4,619

 

 

$

18,313

 

Equity in earnings of unconsolidated affiliates

 

25

 

 

39

 

 

33

 

 

53

 

 

150

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

2,227

 

 

2,135

 

 

2,116

 

 

2,156

 

 

8,634

 

Supplies

 

774

 

 

748

 

 

726

 

 

756

 

 

3,004

 

Other operating expenses, net

 

1,060

 

 

1,027

 

 

1,094

 

 

1,078

 

 

4,259

 

Electronic health record incentives

 

(1

)

 

 

 

 

 

(2

)

 

(3

)

Depreciation and amortization

 

204

 

 

194

 

 

204

 

 

200

 

 

802

 

Impairment and restructuring charges, and acquisition-related costs

 

47

 

 

30

 

 

46

 

 

86

 

 

209

 

Litigation and investigation costs

 

6

 

 

13

 

 

9

 

 

10

 

 

38

 

Net losses (gains) on sales, consolidation and deconsolidation of

facilities

 

(110

)

 

(8

)

 

7

 

 

(16

)

 

(127

)

Operating income

 

517

 

 

406

 

 

320

 

 

404

 

 

1,647

 

Interest expense

 

(255

)

 

(254

)

 

(249

)

 

(246

)

 

(1,004

)

Other non-operating expense, net

 

(1

)

 

(1

)

 

 

 

(3

)

 

(5

)

Gain (loss) from early extinguishment of debt

 

(1

)

 

(1

)

 

 

 

3

 

 

1

 

Income from continuing operations, before income taxes

 

260

 

 

150

 

 

71

 

 

158

 

 

639

 

Income tax expense

 

(70

)

 

(44

)

 

(6

)

 

(56

)

 

(176

)

Income from continuing operations, before discontinued

operations

 

190

 

 

106

 

 

65

 

 

102

 

 

463

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

Income from operations

 

1

 

 

2

 

 

 

 

1

 

 

4

 

Income tax expense

 

 

 

 

 

 

 

(1

)

 

(1

)

Income from discontinued operations

 

1

 

 

2

 

 

 

 

 

 

3

 

Net income

 

191

 

 

108

 

 

65

 

 

102

 

 

466

 

Less: Net income available to noncontrolling interests

 

92

 

 

82

 

 

74

 

 

107

 

 

355

 

Net income available (loss attributable) to Tenet Healthcare

Corporation common shareholders

 

$

99

 

 

$

26

 

 

$

(9

)

 

$

(5

)

 

$

111

 

Amounts available (attributable) to Tenet Healthcare

Corporation common shareholders

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations, net of tax

 

$

98

 

 

$

24

 

 

$

(9

)

 

$

(5

)

 

$

108

 

Income from discontinued operations, net of tax

 

1

 

 

2

 

 

 

 

 

 

3

 

Net income available (loss attributable) to Tenet Healthcare

Corporation common shareholders

 

$

99

 

 

$

26

 

 

$

(9

)

 

$

(5

)

 

$

111

 

Earnings (loss) per share available (attributable) to Tenet

Healthcare Corporation common shareholders:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.97

 

 

$

0.23

 

 

$

(0.09

)

 

$

(0.05

)

 

$

1.06

 

Discontinued operations

 

0.01

 

 

0.02

 

 

 

 

 

 

0.03

 

 

 

$

0.98

 

 

$

0.25

 

 

$

(0.09

)

 

$

(0.05

)

 

$

1.09

 

Diluted

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.95

 

 

$

0.23

 

 

$

(0.09

)

 

$

(0.05

)

 

$

1.04

 

Discontinued operations

 

0.01

 

 

0.02

 

 

 

 

 

 

0.03

 

 

 

$

0.96

 

 

$

0.25

 

 

$

(0.09

)

 

$

(0.05

)

 

$

1.07

 

Weighted average shares and dilutive securities outstanding

(in thousands):

 

 

 

 

 

 

 

 

 

 

Basic

 

101,392

 

 

102,147

 

 

102,402

 

 

102,501

 

 

102,110

 

Diluted

 

102,656

 

 

104,177

 

 

102,402

 

 

102,501

 

 

103,881

 

 

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1)

(Unaudited)

(Dollars in millions except per adjusted patient day

and per adjusted patient admission amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

3/31/2019

 

6/30/2019

 

9/30/2019

 

09/30/2019

 

 

 

 

 

 

 

 

 

Admissions, Patient Days and Surgeries

 

 

 

 

 

 

 

 

Number of hospitals (at end of period)

 

65

 

 

65

 

 

65

 

 

65

 

Total admissions

 

174,726

 

 

169,352

 

 

170,004

 

 

514,082

 

Adjusted patient admissions

 

308,133

 

 

304,066

 

 

306,535

 

 

918,734

 

Paying admissions (excludes charity and uninsured)

 

164,793

 

 

159,128

 

 

159,299

 

 

483,220

 

Charity and uninsured admissions

 

9,933

 

 

10,224

 

 

10,705

 

 

30,862

 

Admissions through emergency department

 

126,079

 

 

121,088

 

 

120,915

 

 

368,082

 

Paying admissions as a percentage of total admissions

 

94.3

%

 

94.0

%

 

93.7

%

 

94.0

%

Charity and uninsured admissions as a percentage of total admissions

 

5.7

%

 

6.0

%

 

6.3

%

 

6.0

%

Emergency department admissions as a percentage of total admissions

 

72.2

%

 

71.5

%

 

71.1

%

 

71.6

%

Surgeries — inpatient

 

44,795

 

 

44,641

 

 

45,637

 

 

135,073

 

Surgeries — outpatient

 

58,218

 

 

60,936

 

 

60,099

 

 

179,253

 

Total surgeries

 

103,013

 

 

105,577

 

 

105,736

 

 

314,326

 

Patient days — total

 

822,079

 

 

787,582

 

 

782,643

 

 

2,392,304

 

Adjusted patient days

 

1,420,170

 

 

1,387,929

 

 

1,381,862

 

 

4,189,961

 

Average length of stay (days)

 

4.70

 

 

4.65

 

 

4.60

 

 

4.65

 

Licensed beds (at end of period)

 

17,221

 

 

17,221

 

 

17,206

 

 

17,206

 

Average licensed beds

 

17,455

 

 

17,221

 

 

17,208

 

 

17,295

 

Utilization of licensed beds

 

52.3

%

 

50.3

%

 

49.4

%

 

50.7

%

Outpatient Visits

 

 

 

 

 

 

 

 

Total visits

 

1,714,392

 

 

1,693,805

 

 

1,673,801

 

 

5,081,998

 

Paying visits (excludes charity and uninsured)

 

1,603,712

 

 

1,581,530

 

 

1,562,007

 

 

4,747,249

 

Charity and uninsured visits

 

110,680

 

 

112,275

 

 

111,794

 

 

334,749

 

Emergency department visits

 

657,449

 

 

637,107

 

 

627,055

 

 

1,921,611

 

Paying visits as a percentage of total visits

 

93.5

%

 

93.4

%

 

93.3

%

 

93.4

%

Charity and uninsured visits as a percentage of total visits

 

6.5

%

 

6.6

%

 

6.7

%

 

6.6

%

Total emergency department admissions and visits

 

783,528

 

 

758,195

 

 

747,970

 

 

2,289,693

 

Revenues

 

 

 

 

 

 

 

 

Net patient service revenues(3)

 

$

3,582

 

 

$

3,547

 

 

$

3,566

 

 

$

10,695

 

Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis

 

 

 

 

 

 

 

 

Net patient service revenue(3) per adjusted patient admission

 

$

11,625

 

 

$

11,665

 

 

$

11,633

 

 

$

11,641

 

Net patient service revenue(3) per adjusted patient day

 

$

2,522

 

 

$

2,556

 

 

$

2,581

 

 

$

2,553

 

Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)

 

$

10,979

 

 

$

10,988

 

 

$

11,021

 

 

$

10,996

 

Net patient service revenues(3) from:

 

 

 

 

 

 

 

 

Medicare

 

21.2

%

 

20.3

%

 

19.6

%

 

20.4

%

Medicaid

 

8.8

%

 

8.9

%

 

8.0

%

 

8.6

%

Managed care

 

65.7

%

 

65.7

%

 

66.1

%

 

65.8

%

Uninsured

 

%

 

0.3

%

 

1.2

%

 

0.5

%

Indemnity and other

 

4.3

%

 

4.8

%

 

5.1

%

 

4.7

%

 (1)

Represents the consolidated results of Tenet’s acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.

 (2)

Excludes operating expenses from Tenet’s health plans.

 (3)

Less implicit price concessions.

 

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1)

(Unaudited)

 

(Dollars in millions except per adjusted patient day

and per adjusted patient admission amounts)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

3/31/2018

 

6/30/2018

 

9/30/2018

 

12/31/2018

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

 

Admissions, Patient Days and Surgeries

 

 

 

 

 

 

 

 

 

 

Number of hospitals (at end of period)

 

69

 

 

68

 

 

68

 

 

68

 

 

68

 

Total admissions

 

182,306

 

 

168,453

 

 

168,201

 

 

170,407

 

 

689,367

 

Adjusted patient admissions

 

320,868

 

 

306,063

 

 

306,197

 

 

308,113

 

 

1,241,241

 

Paying admissions (excludes charity and uninsured)

 

172,490

 

 

158,216

 

 

157,193

 

 

160,172

 

 

648,071

 

Charity and uninsured admissions

 

9,816

 

 

10,237

 

 

11,008

 

 

10,235

 

 

41,296

 

Admissions through emergency department

 

125,076

 

 

115,036

 

 

116,727

 

 

120,012

 

 

476,851

 

Paying admissions as a percentage of total admissions

 

94.6

%

 

93.9

%

 

93.5

%

 

94.0

%

 

94.0

%

Charity and uninsured admissions as a percentage of total admissions

 

5.4

%

 

6.1

%

 

6.5

%

 

6.0

%

 

6.0

%

Emergency department admissions as a percentage of total admissions

 

68.6

%

 

68.3

%

 

69.4

%

 

70.4

%

 

69.2

%

Surgeries — inpatient

 

47,223

 

 

46,274

 

 

45,626

 

 

45,897

 

 

185,020

 

Surgeries — outpatient

 

63,008

 

 

63,805

 

 

61,468

 

 

62,638

 

 

250,919

 

Total surgeries

 

110,231

 

 

110,079

 

 

107,094

 

 

108,535

 

 

435,939

 

Patient days — total

 

858,648

 

 

766,519

 

 

761,920

 

 

779,728

 

 

3,166,815

 

Adjusted patient days

 

1,486,139

 

 

1,373,480

 

 

1,365,662

 

 

1,383,372

 

 

5,608,653

 

Average length of stay (days)

 

4.71

 

 

4.55

 

 

4.53

 

 

4.58

 

 

4.59

 

Licensed beds (at end of period)

 

18,457

 

 

18,314

 

 

18,302

 

 

17,937

 

 

17,937

 

Average licensed beds

 

18,685

 

 

18,362

 

 

18,302

 

 

17,935

 

 

18,321

 

Utilization of licensed beds

 

51.1

%

 

45.9

%

 

45.3

%

 

47.3

%

 

47.4

%

Outpatient Visits

 

 

 

 

 

 

 

 

 

 

Total visits

 

1,842,539

 

 

1,749,847

 

 

1,722,292

 

 

1,734,523

 

 

7,049,201

 

Paying visits (excludes charity and uninsured)

 

1,725,976

 

 

1,633,372

 

 

1,607,184

 

 

1,617,970

 

 

6,584,502

 

Charity and uninsured visits

 

116,563

 

 

116,475

 

 

115,108

 

 

116,553

 

 

464,699

 

Emergency department visits

 

697,001

 

 

643,036

 

 

638,248

 

 

649,544

 

 

2,627,829

 

Paying visits as a percentage of total visits

 

93.7

%

 

93.3

%

 

93.3

%

 

93.3

%

 

93.4

%

Charity and uninsured visits as a percentage of total visits

 

6.3

%

 

6.7

%

 

6.7

%

 

6.7

%

 

6.6

%

Total emergency department admissions and visits

 

822,077

 

 

758,072

 

 

754,975

 

 

769,556

 

 

3,104,680

 

Revenues

 

 

 

 

 

 

 

 

 

 

Net patient service revenues(3)

 

$

3,643

 

 

$

3,443

 

 

$

3,434

 

 

$

3,561

 

 

$

14,081

 

Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis

 

 

 

 

 

 

 

 

 

 

Net patient service revenue(3) per adjusted patient admission

 

$

11,354

 

 

$

11,249

 

 

$

11,215

 

 

$

11,557

 

 

$

11,344

 

Net patient service revenue(3) per adjusted patient day

 

$

2,451

 

 

$

2,507

 

 

$

2,515

 

 

$

2,574

 

 

$

2,511

 

Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)

 

$

10,561

 

 

$

10,619

 

 

$

10,771

 

 

$

10,861

 

 

$

10,701

 

Net patient service revenues(3) from:

 

 

 

 

 

 

 

 

 

 

Medicare

 

21.5

%

 

20.4

%

 

19.8

%

 

20.1

%

 

20.5

%

Medicaid

 

8.8

%

 

9.1

%

 

9.8

%

 

9.1

%

 

9.2

%

Managed care

 

65.0

%

 

66.0

%

 

64.9

%

 

65.8

%

 

65.4

%

Uninsured

 

1.0

%

 

0.2

%

 

0.9

%

 

0.5

%

 

0.7

%

Indemnity and other

 

3.7

%

 

4.3

%

 

4.6

%

 

4.5

%

 

4.2

%

 (1)

Represents the consolidated results of Tenet’s acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.

 (2)

Excludes operating expenses from Tenet’s health plans.

 (3)

Less implicit price concessions.

 

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)

(Unaudited)

(Dollars in millions except per adjusted patient day

and per adjusted patient admission amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended

Nine Months Ended

 

3/31/2019

 

6/30/2019

 

9/30/2019

 

9/30/2019

 

 

 

 

 

 

 

 

 

Admissions, Patient Days and Surgeries

 

 

 

 

 

 

 

 

Number of hospitals (at end of period)

 

65

 

 

65

 

 

65

 

 

65

 

Total admissions

 

173,470

 

 

169,352

 

 

170,004

 

 

512,826

 

Adjusted patient admissions

 

305,871

 

 

304,066

 

 

306,535

 

 

916,472

 

Paying admissions (excludes charity and uninsured)

 

163,632

 

 

159,129

 

 

159,300

 

 

482,061

 

Charity and uninsured admissions

 

9,838

 

 

10,223

 

 

10,704

 

 

30,765

 

Admissions through emergency department

 

125,228

 

 

121,088

 

 

120,915

 

 

367,231

 

Paying admissions as a percentage of total admissions

 

94.3

%

 

94.0

%

 

93.7

%

 

94.0

%

Charity and uninsured admissions as a percentage of total admissions

 

5.7

%

 

6.0

%

 

6.3

%

 

6.0

%

Emergency department admissions as a percentage of total admissions

 

72.2

%

 

71.5

%

 

71.1

%

 

71.6

%

Surgeries — inpatient

 

44,553

 

 

44,641

 

 

45,637

 

 

134,831

 

Surgeries — outpatient

 

57,896

 

 

60,936

 

 

60,099

 

 

178,931

 

Total surgeries

 

102,449

 

 

105,577

 

 

105,736

 

 

313,762

 

Patient days — total

 

815,329

 

 

787,582

 

 

782,643

 

 

2,385,554

 

Adjusted patient days

 

1,408,053

 

 

1,387,929

 

 

1,381,862

 

 

4,177,844

 

Average length of stay (days)

 

4.70

 

 

4.65

 

 

4.60

 

 

4.65

 

Licensed beds (at end of period)

 

17,221

 

 

17,221

 

 

17,206

 

 

17,206

 

Average licensed beds

 

17,221

 

 

17,221

 

 

17,208

 

 

17,217

 

Utilization of licensed beds

 

52.6

%

 

50.3

%

 

49.4

%

 

50.8

%

Outpatient Visits

 

 

 

 

 

 

 

 

Total visits

 

1,686,864

 

 

1,693,805

 

 

1,673,801

 

 

5,054,470

 

Paying visits (excludes charity and uninsured)

 

1,577,635

 

 

1,581,555

 

 

1,562,010

 

 

4,721,200

 

Charity and uninsured visits

 

109,229

 

 

112,250

 

 

111,791

 

 

333,270

 

Emergency department visits

 

651,852

 

 

637,107

 

 

627,055

 

 

1,916,014

 

Paying visits as a percentage of total visits

 

93.5

%

 

93.4

%

 

93.3

%

 

93.4

%

Charity and uninsured visits as a percentage of total visits

 

6.5

%

 

6.6

%

 

6.7

%

 

6.6

%

Total emergency department admissions and visits

 

777,080

 

 

758,195

 

 

747,970

 

 

2,283,245

 

Revenues

 

 

 

 

 

 

 

 

Net patient service revenues(2)

 

$

3,557

 

 

$

3,547

 

 

$

3,562

 

 

$

10,666

 

Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis

 

 

 

 

 

 

 

 

Net patient service revenue(2) per adjusted patient admission

 

$

11,629

 

 

$

11,665

 

 

$

11,620

 

 

$

11,638

 

Net patient service revenue(2) per adjusted patient day

 

$

2,526

 

 

$

2,556

 

 

$

2,578

 

 

$

2,553

 

Net patient service revenues(2) from:

 

 

 

 

 

 

 

 

Medicare

 

21.0

%

 

20.3

%

 

19.5

%

 

20.2

%

Medicaid

 

8.8

%

 

8.9

%

 

8.0

%

 

8.6

%

Managed care

 

65.9

%

 

65.7

%

 

66.2

%

 

65.9

%

Uninsured

 

%

 

0.3

%

 

1.2

%

 

0.5

%

Indemnity and other

 

4.3

%

 

4.8

%

 

5.1

%

 

4.8

%

 (1)

Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the nine months ended September 30, 2019 and 2018 and associated outpatient facilities, but excludes the results of hospitals Tenet divested since January 1, 2018.

 (2)

Less implicit price concessions.

 

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)

(Unaudited)

(Dollars in millions except per adjusted patient day

and per adjusted patient admission amounts)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

3/31/2018

 

6/30/2018

 

9/30/2018

 

12/31/2018

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

 

Admissions, Patient Days and Surgeries

 

 

 

 

 

 

 

 

 

 

Number of hospitals (at end of period)

 

65

 

 

65

 

 

65

 

 

65

 

 

65

 

Total admissions

 

173,684

 

 

163,903

 

 

164,075

 

 

166,458

 

 

668,120

 

Adjusted patient admissions

 

304,145

 

 

297,460

 

 

298,221

 

 

300,562

 

 

1,200,388

 

Paying admissions (excludes charity and uninsured)

 

164,239

 

 

153,816

 

 

153,227

 

 

156,392

 

 

627,674

 

Charity and uninsured admissions

 

9,445

 

 

10,087

 

 

10,848

 

 

10,066

 

 

40,446

 

Admissions through emergency department

 

119,957

 

 

111,902

 

 

113,833

 

 

117,229

 

 

462,921

 

Paying admissions as a percentage of total admissions

 

94.6

%

 

93.8

%

 

93.4

%

 

94.0

%

 

93.9

%

Charity and uninsured admissions as a percentage of total admissions

 

5.4

%

 

6.2

%

 

6.6

%

 

6.0

%

 

6.1

%

Emergency department admissions as a percentage of total admissions

 

69.1

%

 

68.3

%

 

69.4

%

 

70.4

%

 

69.3

%

Surgeries — inpatient

 

45,052

 

 

45,191

 

 

44,783

 

 

45,012

 

 

180,038

 

Surgeries — outpatient

 

59,720

 

 

62,205

 

 

60,080

 

 

61,151

 

 

243,156

 

Total surgeries

 

104,772

 

 

107,396

 

 

104,863

 

 

106,163

 

 

423,194

 

Patient days — total

 

817,000

 

 

743,442

 

 

740,870

 

 

758,359

 

 

3,059,671

 

Adjusted patient days

 

1,405,568

 

 

1,329,915

 

 

1,325,229

 

 

1,342,745

 

 

5,403,457

 

Average length of stay (days)

 

4.70

 

 

4.54

 

 

4.52

 

 

4.56

 

 

4.58

 

Licensed beds (at end of period)

 

17,246

 

 

17,246

 

 

17,234

 

 

17,237

 

 

17,237

 

Average licensed beds

 

17,246

 

 

17,246

 

 

17,234

 

 

17,235

 

 

17,240

 

Utilization of licensed beds

 

52.6

%

 

47.4

%

 

46.7

%

 

47.8

%

 

48.6

%

Outpatient Visits

 

 

 

 

 

 

 

 

 

 

Total visits

 

1,716,896

 

 

1,673,056

 

 

1,647,013

 

 

1,658,541

 

 

6,695,506

 

Paying visits (excludes charity and uninsured)

 

1,607,194

 

 

1,560,950

 

 

1,536,247

 

 

1,547,018

 

 

6,251,409

 

Charity and uninsured visits

 

109,702

 

 

112,106

 

 

110,766

 

 

111,523

 

 

444,097

 

Emergency department visits

 

663,722

 

 

622,898

 

 

617,925

 

 

630,557

 

 

2,535,102

 

Paying visits as a percentage of total visits

 

93.6

%

 

93.3

%

 

93.3

%

 

93.3

%

 

93.4

%

Charity and uninsured visits as a percentage of total visits

 

6.4

%

 

6.7

%

 

6.7

%

 

6.7

%

 

6.6

%

Total emergency department admissions and visits

 

783,679

 

 

734,800

 

 

731,758

 

 

747,786

 

 

2,998,023

 

Revenues

 

 

 

 

 

 

 

 

 

 

Net patient service revenues(2)

 

$

3,493

 

 

$

3,357

 

 

$

3,367

 

 

$

3,490

 

 

$

13,707

 

Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis

 

 

 

 

 

 

 

 

 

 

Net patient service revenue(2) per adjusted patient admission

 

$

11,485

 

 

$

11,286

 

 

$

11,290

 

 

$

11,612

 

 

$

11,419

 

Net patient service revenue(2) per adjusted patient day

 

$

2,485

 

 

$

2,524

 

 

$

2,541

 

 

$

2,599

 

 

$

2,537

 

Net patient service revenues(2) from:

 

 

 

 

 

 

 

 

 

 

Medicare

 

20.9

%

 

20.1

%

 

19.5

%

 

19.8

%

 

20.1

%

Medicaid

 

8.7

%

 

8.9

%

 

9.8

%

 

9.1

%

 

9.1

%

Managed care

 

65.3

%

 

66.4

%

 

65.2

%

 

66.1

%

 

65.8

%

Uninsured

 

1.3

%

 

0.2

%

 

0.9

%

 

0.5

%

 

0.7

%

Indemnity and other

 

3.8

%

 

4.4

%

 

4.6

%

 

4.5

%

 

4.3

%

 (1)

Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the nine months ended September 30, 2019 and 2018 and associated outpatient facilities, but excludes the results of hospitals Tenet divested since January 1, 2018.

 (2)

Less implicit price concessions.

 

TENET HEALTHCARE CORPORATION

SEGMENT REPORTING

(Unaudited)

 

(Dollars in millions)

 

 

 

 

 

September 30,

 

December 31,

 

 

 

 

 

 

2019

 

2018

Assets

 

 

 

 

 

 

 

 

Hospital Operations and other

 

 

 

 

 

$

16,202

 

 

$

15,684

 

Ambulatory Care

 

 

 

 

 

6,100

 

 

5,711

 

Conifer

 

 

 

 

 

1,055

 

 

1,014

 

Total

 

 

 

 

 

$

23,357

 

 

$

22,409

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Capital expenditures:

 

 

 

 

 

 

 

 

Hospital Operations and other

 

$

135

 

 

$

115

 

 

$

423

 

 

$

343

 

Ambulatory Care

 

16

 

 

18

 

 

57

 

 

46

 

Conifer

 

5

 

 

3

 

 

12

 

 

15

 

Total

 

$

156

 

 

$

136

 

 

$

492

 

 

$

404

 

 

 

 

 

 

 

 

 

 

Net operating revenues:

 

 

 

 

 

 

 

 

Hospital Operations and other total prior to inter-segment eliminations(1)

 

$

3,850

 

 

$

3,762

 

 

$

11,539

 

 

$

11,442

 

Ambulatory Care

 

522

 

 

502

 

 

1,526

 

 

1,531

 

Conifer

 

 

 

 

 

 

 

 

Tenet

 

140

 

 

146

 

 

432

 

 

440

 

Other customers

 

196

 

 

225

 

 

608

 

 

721

 

Total Conifer revenues

 

336

 

 

371

 

 

1,040

 

 

1,161

 

Inter-segment eliminations

 

(140

)

 

(146

)

 

(432

)

 

(440

)

Total

 

$

4,568

 

 

$

4,489

 

 

$

13,673

 

 

$

13,694

 

 

 

 

 

 

 

 

 

 

Equity in earnings of unconsolidated affiliates:

 

 

 

 

 

 

 

 

Hospital Operations and other

 

$

1

 

 

$

2

 

 

$

12

 

 

$

6

 

Ambulatory Care

 

37

 

 

31

 

 

102

 

 

91

 

Total

 

$

38

 

 

$

33

 

 

$

114

 

 

$

97

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

Hospital Operations and other(2)

 

$

334

 

 

$

312

 

 

$

1,018

 

 

$

1,059

 

Ambulatory Care

 

207

 

 

184

 

 

591

 

 

547

 

Conifer

 

90

 

 

81

 

 

292

 

 

270

 

Total

 

$

631

 

 

$

577

 

 

$

1,901

 

 

$

1,876

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

Hospital Operations and other

 

$

175

 

 

$

175

 

 

$

539

 

 

$

514

 

Ambulatory Care

 

19

 

 

17

 

 

55

 

 

51

 

Conifer

 

11

 

 

12

 

 

33

 

 

37

 

Total

 

$

205

 

 

$

204

 

 

$

627

 

 

$

602

 

(1)

Hospital Operations and other revenues includes health plan revenues of less than $1 million and approximately $1 million for the three and nine months ended September 30, 2019, respectively, and $8 million and $14 million for the three and nine months ended September 30, 2018, respectively.

(2)

Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of $(1) million and $(2) million for the three and nine months ended September 30, 2019, respectively, and $9 million for both of the three and nine months ended September 30, 2018.

 

TENET HEALTHCARE CORPORATION

STATEMENTS OF OPERATIONS – AMBULATORY CARE SEGMENT

(Unaudited)

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

Three Months Ended September 30,

 

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

Ambulatory Care as Reported Under GAAP

 

Unconsolidated Affiliates

 

Ambulatory Care as Reported Under GAAP

 

Unconsolidated Affiliates

Net operating revenues(1)

 

$

522

 

 

$

622

 

 

$

502

 

 

$

546

 

Equity in earnings of unconsolidated affiliates(2)

 

37

 

 

 

 

31

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

157

 

 

159

 

 

157

 

 

137

 

Supplies

 

109

 

 

160

 

 

104

 

 

143

 

Other operating expenses, net

 

86

 

 

120

 

 

88

 

 

114

 

Depreciation and amortization

 

19

 

 

20

 

 

17

 

 

18

 

Litigation and investigation costs

 

68

 

 

 

 

 

 

 

Impairment and restructuring charges, and acquisition-related costs

 

7

 

 

(2

)

 

13

 

 

 

Net losses on sales, consolidation and deconsolidation of facilities

 

1

 

 

1

 

 

 

 

 

Operating income

 

112

 

 

164

 

 

154

 

 

134

 

Interest expense

 

(31

)

 

(6

)

 

(33

)

 

(7

)

Other

 

3

 

 

 

 

3

 

 

 

Net income from continuing operations, before income taxes

 

84

 

 

158

 

 

124

 

 

127

 

Income tax expense

 

(13

)

 

(2

)

 

(14

)

 

(2

)

Net income

 

71

 

 

$

156

 

 

110

 

 

$

125

 

Less: Net income available to noncontrolling interests

 

73

 

 

 

 

70

 

 

 

Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders

 

$

(2

)

 

 

 

$

40

 

 

 

Equity in earnings of unconsolidated affiliates

 

 

 

$

37

 

 

 

 

$

31

 

(1)

On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 6.9% during the three months ended September 30, 2019, with cases increasing 5.1% and revenue per case increasing 1.7%.

(2)

At September 30, 2019, 111 of the 348 facilities in the Company’s Ambulatory segment were not consolidated based on the nature of the segment’s joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment’s unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company’s overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. We control our remaining 237 facilities and account for these investments as consolidated subsidiaries.

 

TENET HEALTHCARE CORPORATION

STATEMENTS OF OPERATIONS – AMBULATORY CARE SEGMENT

(Unaudited)

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

Ambulatory Care as Reported Under GAAP

 

Unconsolidated Affiliates

 

Ambulatory Care as Reported Under GAAP

 

Unconsolidated Affiliates

Net operating revenues(1)

 

$

1,526

 

 

$

1,809

 

 

$

1,531

 

 

$

1,586

 

Equity in earnings of unconsolidated affiliates(2)

 

102

 

 

 

 

91

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

467

 

 

462

 

 

484

 

 

391

 

Supplies

 

316

 

 

470

 

 

316

 

 

417

 

Other operating expenses, net

 

254

 

 

377

 

 

275

 

 

333

 

Depreciation and amortization

 

55

 

 

62

 

 

51

 

 

51

 

Litigation and investigation costs

 

68

 

 

 

 

 

 

 

Impairment and restructuring charges, and acquisition-related costs

 

12

 

 

(2

)

 

20

 

 

 

Net gains on sales, consolidation and deconsolidation of facilities

 

(2

)

 

(25

)

 

(1

)

 

 

Operating income

 

458

 

 

465

 

 

477

 

 

394

 

Interest expense

 

(94

)

 

(19

)

 

(106

)

 

(17

)

Other

 

9

 

 

6

 

 

6

 

 

1

 

Net income from continuing operations, before income taxes

 

373

 

 

452

 

 

377

 

 

378

 

Income tax expense

 

(48

)

 

(6

)

 

(47

)

 

(6

)

Net income

 

325

 

 

$

446

 

 

330

 

 

$

372

 

Less: Net income available to noncontrolling interests

 

219

 

 

 

 

209

 

 

 

Net income available to Tenet Healthcare Corporation common shareholders

 

$

106

 

 

 

 

$

121

 

 

 

Equity in earnings of unconsolidated affiliates

 

 

 

$

102

 

 

 

 

$

91

 

(1)

On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 5.5% during the nine months ended September 30, 2019, with cases increasing 3.1% and revenue per case increasing 2.3%.

(2)

At September 30, 2019, 111 of the 348 facilities in the Company’s Ambulatory segment were not consolidated based on the nature of the segment’s joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment’s unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company’s overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. We control our remaining 237 facilities and account for these investments as consolidated subsidiaries.

Non-GAAP Financial Measures

Adjusted EBITDA, a non-GAAP measure, is defined by the Company as net income available (loss attributable) to Tenet Healthcare Corporation common shareholders before (1) the cumulative effect of changes in accounting principle, (2) net loss attributable (income available) to noncontrolling interests, (3) income (loss) from discontinued operations, (4) income tax benefit (expense), (5) gain (loss) from early extinguishment of debt, (6) other non-operating income (expense), net, (7) interest expense, (8) litigation and investigation (costs) benefit, net of insurance recoveries, (9) net gains (losses) on sales, consolidation and deconsolidation of facilities, (10) impairment and restructuring charges and acquisition-related costs, (11) depreciation and amortization and (12) income (loss) from divested operations and closed businesses (i.e., the Company’s health plan businesses). Litigation and investigation costs do not include ordinary course of business malpractice and other litigation and related expense.

Adjusted net income available (loss attributable) from continuing operations to Tenet Healthcare Corporation common shareholders, a non-GAAP measure, is defined by the Company as net income available (loss attributable) to Tenet Healthcare Corporation common shareholders before (1) net income (loss) from discontinued operations, (2) impairment and restructuring charges, and acquisition-related costs, (3) litigation and investigation costs, (4) net gains (losses) on sales, consolidation and deconsolidation of facilities, (5) gain (loss) from early extinguishment of debt, (6) income (loss) from divested operations and closed businesses, and (7) the associated impact of these items on taxes and noncontrolling interests. Adjusted diluted earnings (loss) per share from continuing operations, a non-GAAP term, is defined by the Company as Adjusted net income available (loss attributable) from continuing operations to Tenet Healthcare Corporation common shareholders divided by the weighted average primary or diluted shares outstanding in the reporting period.

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

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

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

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

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

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

A reconciliation of net income available (loss attributable) to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, to Adjusted EBITDA is set forth in Table #1 below for each quarter in 2018 and 2019. A reconciliation of net income available (loss attributable) to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, to Adjusted net income available (loss attributable) from continuing operations to Tenet Healthcare Corporation common shareholders is set forth in Table #2 below for each quarter in 2018 and 2019. A reconciliation of net cash provided by operating activities, the most comparable GAAP measure, to Free Cash Flow and Adjusted Free Cash Flow is set forth in Table #3 below for each quarter in 2018 and 2019.

 

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #1 – Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA for 2019

(Unaudited)

 

(Dollars in millions)

 

2019

 

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

YTD

Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders

 

$

(19

)

 

$

17

 

 

$

(232

)

 

$

(234

)

Less: Net income available to noncontrolling interests

 

(84

)

 

(95

)

 

(80

)

 

(259

)

Income from discontinued operations, net of tax

 

8

 

 

2

 

 

1

 

 

11

 

Income (loss) from continuing operations

 

57

 

 

110

 

 

(153

)

 

14

 

Income tax expense

 

(17

)

 

(30

)

 

(20

)

 

(67

)

Loss from early extinguishment of debt

 

(47

)

 

 

 

(180

)

 

(227

)

Other non-operating income (expense), net

 

1

 

 

(1

)

 

(3

)

 

(3

)

Interest expense

 

(251

)

 

(247

)

 

(244

)

 

(742

)

Operating income

 

371

 

 

388

 

 

294

 

 

1,053

 

Litigation and investigation costs

 

(13

)

 

(18

)

 

(84

)

 

(115

)

Net losses on sales, consolidation and deconsolidation of facilities

 

(1

)

 

(1

)

 

(1

)

 

(3

)

Impairment and restructuring charges, and acquisition-related costs

 

(19

)

 

(36

)

 

(46

)

 

(101

)

Depreciation and amortization

 

(208

)

 

(214

)

 

(205

)

 

(627

)

Loss from divested and closed businesses

 

(1

)

 

 

 

(1

)

 

(2

)

Adjusted EBITDA

 

$

613

 

 

$

657

 

 

$

631

 

 

$

1,901

 

 

 

 

 

 

 

 

 

 

Net operating revenues

 

$

4,545

 

 

$

4,560

 

 

$

4,568

 

 

$

13,673

 

Less: Net operating revenues from health plans

 

 

 

1

 

 

 

 

1

 

Adjusted net operating revenues

 

$

4,545

 

 

$

4,559

 

 

$

4,568

 

 

$

13,672

 

 

 

 

 

 

 

 

 

 

Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders as a % of net operating revenues

 

(0.4

)%

 

0.4

%

 

(5.1

)%

 

(1.7

)%

Adjusted EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA margin)

 

13.5