Tenet Reports Results for the First Quarter Ended March 31, 2019
- Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $27 million or
$0.26 per diluted share in the first quarter of 2019 due in part to a$47 million pre-tax loss from the extinguishment of debt or$0.45 per diluted share. - Adjusted diluted earnings per share from continuing operations were
$0.54 in the first quarter of 2019, above the high end of the Company’s Outlook. - Adjusted EBITDA was
$613 million in the first quarter of 2019, above the midpoint of the Company’s Outlook. Adjusted EBITDA consisted of$337 million in the Hospital Operations and other segment,$177 million in the Ambulatory Care segment and$99 million in the Conifer segment. - Hospital segment same-hospital net patient service revenues grew 1.9 percent in the first quarter of 2019: net revenue per adjusted admission increased 1.3 percent; adjusted admissions increased 0.6 percent; and admissions decreased 0.1 percent.
- Ambulatory Care segment same-facility system-wide surgical revenue grew 4.2 percent in the first quarter of 2019, with surgical cases up 2.8 percent and surgical revenue per case up 1.4 percent. Adjusted EBITDA less facility-level noncontrolling interest increased 9.8 percent.
- Conifer segment revenues decreased 13.6 percent in the first quarter of 2019 primarily as a result of divestitures by Tenet and other customers; Adjusted EBITDA margins increased 410 basis points to 28.4 percent reflecting the ongoing improvement in Conifer’s cost structure.
- Updating 2019 Outlook for net income and earnings per share; reiterating previously provided 2019 Outlook for revenue, Adjusted EBITDA, Adjusted EPS and Adjusted Free Cash Flow.
Results for the Quarter Ended
Adjusted EBITDA was
Hospital Operations and Other Segment
Net operating revenues in the Hospital Operations and other segment were
On a same-hospital basis, net patient service revenues were
Adjusted EBITDA in Tenet’s hospital segment was
Selected operating expenses in the Hospital Operations and other segment increased 4.0 percent on a per adjusted admission basis in the first quarter of 2019 and increased 2.5 percent excluding the
Ambulatory Care Segment
The Ambulatory Care segment produced net operating revenues of
The results of many of the facilities in which the Ambulatory Care segment has an investment are not consolidated by Tenet (of the 334 facilities at
Conifer Segment
During the first quarter of 2019, Conifer’s revenue declined 13.6 percent to
Conifer generated
Net Income and Earnings Per Share
Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of
After adjusting for the items listed on Table #2, Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of
A reconciliation of GAAP net income available (loss attributable) to Tenet common shareholders to Adjusted net income available (loss attributable) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations is contained in Table #2 at the end of this release.
Cash Flow and Liquidity
Cash and cash equivalents were
Net cash provided by operating activities was
Net cash used in investing activities was
Net cash used in financing activities was
Reconciliations of net cash provided by operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.
Outlook
The Company’s Outlook for 2019 includes:
- Revenue of
$18.0 billion to$18.4 billion , - Net income from continuing operations available to Tenet common shareholders of
$17 million to$117 million , - Adjusted EBITDA of
$2.650 billion to$2.750 billion , - Net cash provided by operating activities of
$1.070 billion to$1.375 billion , - Adjusted Free Cash Flow of
$600 million to$800 million , - Diluted earnings per share from continuing operations of
$0.16 to$1.10 , and - Adjusted diluted earnings per share from continuing operations of
$2.08 to$2.59 .
The Outlook for 2019 assumes equity in earnings of unconsolidated affiliates of
The Company’s Outlook for the second quarter of 2019 includes:
- Revenue of
$4.400 billion to$4.700 billion , - Net income available (loss attributable) from continuing operations to Tenet common shareholders ranging from a loss of
$5 million to income of$40 million , - Adjusted EBITDA of
$625 million to$675 million , - Diluted earnings (loss) per share from continuing operations ranging from a loss of
$0.05 per share to earnings of$0.38 per share, and - Adjusted diluted earnings per share from continuing operations ranging from
$0.29 to$0.63 .
The Outlook for the second quarter assumes equity in earnings of unconsolidated affiliates of
Additional details on Tenet’s Outlook for both the second 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 First Quarter Results
Tenet management will discuss the Company’s first quarter 2019 results on a webcast scheduled for
Additional information regarding Tenet’s quarterly results of operations is contained in its Form 10-Q report for the period ended
This press release includes certain non-GAAP measures, such as Adjusted EBITDA, Adjusted net income available (loss attributable) from continuing operations to Tenet common shareholders, Adjusted diluted earnings (loss) per share from continuing operations, Free Cash Flow and Adjusted Free Cash Flow. Reconciliations of these measures to the most comparable GAAP measures are contained in the tables at the end of this release.
The terms “THC,” “Tenet Healthcare Corporation,” “the company,” “we,” “us” or “our” refer to
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
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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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
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| (Dollars in millions except per share amounts) | Three Months Ended |
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| 2019 | % | 2018 | % | Change | |||||||||||||
| Net operating revenues | $ | 4,545 | 100.0 | % | 4,699 | 100.0 | % | (3.3 | )% | ||||||||
| Equity in earnings of unconsolidated affiliates | 34 | 0.7 | % | 25 | 0.5 | % | 36.0 | % | |||||||||
| Operating expenses: | |||||||||||||||||
| Salaries, wages and benefits | 2,153 | 47.3 | % | 2,227 | 47.3 | % | (3.3 | )% | |||||||||
| Supplies | 741 | 16.3 | % | 774 | 16.5 | % | (4.3 | )% | |||||||||
| Other operating expenses, net | 1,074 | 23.6 | % | 1,060 | 22.6 | % | 1.3 | % | |||||||||
| Electronic health record incentives | (1 | ) | — | % | (1 | ) | — | % | — | % | |||||||
| Depreciation and amortization | 208 | 4.6 | % | 204 | 4.3 | % | |||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 19 | 0.4 | % | 47 | 1.0 | % | |||||||||||
| Litigation and investigation costs | 13 | 0.3 | % | 6 | 0.1 | % | |||||||||||
| Net losses (gains) on sales, consolidation and deconsolidation of facilities | 1 | — | % | (110 | ) | (2.3 | )% | ||||||||||
| Operating income | 371 | 8.2 | % | 517 | 11.0 | % | |||||||||||
| Interest expense | (251 | ) | (255 | ) | |||||||||||||
| Other non-operating income (expense), net | 1 | (1 | ) | ||||||||||||||
| Loss from early extinguishment of debt | (47 | ) | (1 | ) | |||||||||||||
| Income from continuing operations, before income taxes | 74 | 260 | |||||||||||||||
| Income tax expense | (17 | ) | (70 | ) | |||||||||||||
| Income from continuing operations, before discontinued
operations |
57 | 190 | |||||||||||||||
| Discontinued operations: | |||||||||||||||||
| Income from operations | 10 | 1 | |||||||||||||||
| Income tax expense | (2 | ) | — | ||||||||||||||
| Income from discontinued operations | 8 | 1 | |||||||||||||||
| Net income | 65 | 191 | |||||||||||||||
| Less: Net income available to noncontrolling interests | 84 | 92 | |||||||||||||||
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Net income available (loss attributable) to
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$ | (19 | ) | $ | 99 | ||||||||||||
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Amounts available (attributable) to
|
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| Income (loss) from continuing operations, net of tax | $ | (27 | ) | $ | 98 | ||||||||||||
| Income from discontinued operations, net of tax | 8 | 1 | |||||||||||||||
| Net income available (loss attributable) to |
$ | (19 | ) | $ | 99 | ||||||||||||
| Earnings (loss) per share available (attributable) to |
|||||||||||||||||
| Basic | |||||||||||||||||
| Continuing operations | $ | (0.26 | ) | $ | 0.97 | ||||||||||||
| Discontinued operations | 0.08 | 0.01 | |||||||||||||||
| $ | (0.18 | ) | $ | 0.98 | |||||||||||||
| Diluted | |||||||||||||||||
| Continuing operations | $ | (0.26 | ) | $ | 0.95 | ||||||||||||
| Discontinued operations | 0.08 | 0.01 | |||||||||||||||
| $ | (0.18 | ) | $ | 0.96 | |||||||||||||
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Weighted average shares and dilutive securities outstanding (in thousands): |
|||||||||||||||||
| Basic | 102,788 | 101,392 | |||||||||||||||
| Diluted* | 102,788 | 102,656 | |||||||||||||||
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*Had we generated income from continuing operations available to common shareholders in the three months ended |
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CONSOLIDATED BALANCE SHEETS (Unaudited) |
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| (Dollars in millions) | 2019 | 2018 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 252 | $ | 411 | ||||
| Accounts receivable, less allowance for doubtful accounts | 2,744 | 2,595 | ||||||
| Inventories of supplies, at cost | 308 | 305 | ||||||
| Income tax receivable | 17 | 21 | ||||||
| Assets held for sale | — | 107 | ||||||
| Other current assets | 1,261 | 1,197 | ||||||
| Total current assets | 4,582 | 4,636 | ||||||
| Investments and other assets | 2,331 | 1,456 | ||||||
| Deferred income taxes | 291 | 312 | ||||||
| Property and equipment, at cost, less accumulated depreciation and amortization | 6,996 | 6,993 | ||||||
| |
7,283 | 7,281 | ||||||
| Other intangible assets, at cost, less accumulated amortization | 1,675 | 1,731 | ||||||
| Total assets | $ | 23,158 | $ | 22,409 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 158 | $ | 182 | ||||
| Accounts payable | 1,101 | 1,207 | ||||||
| Accrued compensation and benefits | 707 | 838 | ||||||
| Professional and general liability reserves | 224 | 216 | ||||||
| Accrued interest payable | 323 | 240 | ||||||
| Liabilities held for sale | — | 43 | ||||||
| Other current liabilities | 1,212 | 1,131 | ||||||
| Total current liabilities | 3,725 | 3,857 | ||||||
| Long-term debt, net of current portion | 14,814 | 14,644 | ||||||
| Professional and general liability reserves | 690 | 666 | ||||||
| Defined benefit plan obligations | 512 | 521 | ||||||
| Deferred income taxes | 36 | 36 | ||||||
| Other long-term liabilities | 1,268 | 578 | ||||||
| Total liabilities | 21,045 | 20,302 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interests in equity of consolidated subsidiaries | 1,439 | 1,420 | ||||||
| Equity: | ||||||||
| Shareholders’ equity: | ||||||||
| Common stock | 7 | 7 | ||||||
| Additional paid-in capital | 4,748 | 4,747 | ||||||
| Accumulated other comprehensive loss | (221 | ) | (223 | ) | ||||
| Accumulated deficit | (2,254 | ) | (2,236 | ) | ||||
| Common stock in treasury, at cost | (2,414 | ) | (2,414 | ) | ||||
| Total shareholders’ deficit | (134 | ) | (119 | ) | ||||
| Noncontrolling interests | 808 | 806 | ||||||
| Total equity | 674 | 687 | ||||||
| Total liabilities and equity | $ | 23,158 | $ | 22,409 | ||||
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CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) |
||||||||
| Three Months Ended | ||||||||
| (Dollars in millions) | |
|||||||
| 2019 | 2018 | |||||||
| Net income | $ | 65 | $ | 191 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 208 | 204 | ||||||
| Deferred income tax expense | 19 | 70 | ||||||
| Stock-based compensation expense | 11 | 9 | ||||||
| Impairment and restructuring charges, and acquisition-related costs | 19 | 47 | ||||||
| Litigation and investigation costs | 13 | 6 | ||||||
| Net losses (gains) on sales, consolidation and deconsolidation of facilities | 1 | (110 | ) | |||||
| Loss from early extinguishment of debt | 47 | 1 | ||||||
| Equity in earnings of unconsolidated affiliates, net of distributions received | 3 | 9 | ||||||
| Amortization of debt discount and debt issuance costs | 11 | 11 | ||||||
| Pre-tax income from discontinued operations | (10 | ) | (1 | ) | ||||
| Other items, net | (7 | ) | (1 | ) | ||||
| Changes in cash from operating assets and liabilities: | ||||||||
| Accounts receivable | (158 | ) | (66 | ) | ||||
| Inventories and other current assets | (115 | ) | (41 | ) | ||||
| Income taxes | 9 | — | ||||||
| Accounts payable, accrued expenses and other current liabilities | (109 | ) | (183 | ) | ||||
| Other long-term liabilities | 37 | 1 | ||||||
| Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (32 | ) | (33 | ) | ||||
| Net cash used in operating activities from discontinued operations, excluding income taxes | (2 | ) | (1 | ) | ||||
| Net cash provided by operating activities | 10 | 113 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment — continuing operations | (192 | ) | (143 | ) | ||||
| Purchases of businesses or joint venture interests, net of cash acquired | (2 | ) | (16 | ) | ||||
| Proceeds from sales of facilities and other assets — continuing operations | 41 | 425 | ||||||
| Proceeds from sales of facilities and other assets — discontinued operations | 17 | — | ||||||
| Proceeds from sales of marketable securities, long-term investments and other assets | 4 | 134 | ||||||
| Purchases of equity investments | (1 | ) | (30 | ) | ||||
| Other long-term assets | (2 | ) | 7 | |||||
| Other items, net | (4 | ) | (4 | ) | ||||
| Net cash provided by (used in) investing activities | (139 | ) | 373 | |||||
| Cash flows from financing activities: | ||||||||
| Repayments of borrowings under credit facility | (495 | ) | — | |||||
| Proceeds from borrowings under credit facility | 685 | — | ||||||
| Repayments of other borrowings | (1,620 | ) | (91 | ) | ||||
| Proceeds from other borrowings | 1,507 | 7 | ||||||
| Debt issuance costs | (18 | ) | — | |||||
| Distributions paid to noncontrolling interests | (74 | ) | (64 | ) | ||||
| Proceeds from sales of noncontrolling interests | 4 | 5 | ||||||
| Purchases of noncontrolling interests | (3 | ) | (9 | ) | ||||
| Proceeds from exercise of stock options and employee stock purchase plan | 1 | 9 | ||||||
| Other items, net | (17 | ) | 20 | |||||
| Net cash used in financing activities | (30 | ) | (123 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | (159 | ) | 363 | |||||
| Cash and cash equivalents at beginning of period | 411 | 611 | ||||||
| Cash and cash equivalents at end of period | $ | 252 | $ | 974 | ||||
| Supplemental disclosures: | ||||||||
| Interest paid, net of capitalized interest | $ | (158 | ) | $ | (169 | ) | ||
| Income tax refunds, net | $ | 9 | $ | 1 | ||||
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SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) (Unaudited) |
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| (Dollars in millions except per adjusted patient day | Three Months Ended |
|||||||||||
| and per adjusted patient admission amounts) | 2019 | 2018 | Change | |||||||||
| Admissions, |
||||||||||||
| Number of hospitals (at end of period) | 65 | 69 | (4 | ) | * | |||||||
| Total admissions | 174,726 | 182,306 | (4.2 | )% | ||||||||
| Adjusted patient admissions | 308,133 | 320,868 | (4.0 | )% | ||||||||
| Paying admissions (excludes charity and uninsured) | 164,793 | 172,490 | (4.5 | )% | ||||||||
| Charity and uninsured admissions | 9,933 | 9,816 | 1.2 | % | ||||||||
| Admissions through emergency department | 126,079 | 125,076 | 0.8 | % | ||||||||
| Paying admissions as a percentage of total admissions | 94.3 | % | 94.6 | % | (0.3 | )% | * | |||||
| Charity and uninsured admissions as a percentage of total admissions | 5.7 | % | 5.4 | % | 0.3 | % | * | |||||
| Emergency department admissions as a percentage of total admissions | 72.2 | % | 68.6 | % | 3.6 | % | * | |||||
| Surgeries — inpatient | 44,795 | 47,223 | (5.1 | )% | ||||||||
| Surgeries — outpatient | 58,218 | 63,008 | (7.6 | )% | ||||||||
| Total surgeries | 103,013 | 110,231 | (6.5 | )% | ||||||||
| Patient days — total | 822,079 | 858,648 | (4.3 | )% | ||||||||
| Adjusted patient days | 1,420,170 | 1,486,139 | (4.4 | )% | ||||||||
| Average length of stay (days) | 4.70 | 4.71 | (0.2 | )% | ||||||||
| Licensed beds (at end of period) | 17,221 | 18,457 | (6.7 | )% | ||||||||
| Average licensed beds | 17,455 | 18,685 | (6.6 | )% | ||||||||
| Utilization of licensed beds | 52.3 | % | 51.1 | % | 1.2 | % | * | |||||
| Outpatient Visits | ||||||||||||
| Total visits | 1,714,392 | 1,842,539 | (7.0 | )% | ||||||||
| Paying visits (excludes charity and uninsured) | 1,603,712 | 1,725,976 | (7.1 | )% | ||||||||
| Charity and uninsured visits | 110,680 | 116,563 | (5.0 | )% | ||||||||
| Emergency department visits | 657,449 | 697,001 | (5.7 | )% | ||||||||
| Paying visits as a percentage of total visits | 93.5 | % | 93.7 | % | (0.2 | )% | * | |||||
| Charity and uninsured visits as a percentage of total visits | 6.5 | % | 6.3 | % | 0.2 | % | * | |||||
| Total emergency department admissions and visits | 783,528 | 822,077 | (4.7 | )% | ||||||||
| Revenues | ||||||||||||
| Net patient service revenues(3) | $ | 3,582 | $ | 3,643 | (1.7 | )% | ||||||
| Revenues on a Per Adjusted Patient Admission and Per Adjusted |
||||||||||||
| Net patient service revenue(3) per adjusted patient admission | $ | 11,625 | $ | 11,354 | 2.4 | % | ||||||
| Net patient service revenue(3) per adjusted patient day | $ | 2,522 | $ | 2,451 | 2.9 | % | ||||||
| Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2) | $ | 10,979 | $ | 10,561 | 4.0 | % | ||||||
| Net patient service revenues(3) from: | ||||||||||||
| Medicare | 21.2 | % | 21.5 | % | (0.3 | )% | * | |||||
| Medicaid | 8.8 | % | 8.8 | % | — | % | * | |||||
| Managed care | 65.7 | % | 65.0 | % | 0.7 | % | * | |||||
| Uninsured | — | % | 1.0 | % | (1.0 | )% | * | |||||
| Indemnity and other | 4.3 | % | 3.7 | % | 0.6 | % | * | |||||
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(1) Represents the consolidated results of Tenet’s acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment. |
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(2) Excludes operating expenses from Tenet's health plans. |
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(3) Less implicit price concessions. |
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* This change is the difference between the 2019 and 2018 amounts shown. |
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SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) (Unaudited) |
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| (Dollars in millions except per adjusted patient day | Three Months Ended |
|||||||||||
| and per adjusted patient admission amounts) | 2019 | 2018 | Change | |||||||||
| Admissions, |
||||||||||||
| Number of hospitals (at end of period) | 65 | 65 | — | * | ||||||||
| Total admissions | 173,470 | 173,684 | (0.1 | )% | ||||||||
| Adjusted patient admissions | 305,871 | 304,145 | 0.6 | % | ||||||||
| Paying admissions (excludes charity and uninsured) | 163,632 | 164,239 | (0.4 | )% | ||||||||
| Charity and uninsured admissions | 9,838 | 9,445 | 4.2 | % | ||||||||
| Admissions through emergency department | 125,228 | 119,957 | 4.4 | % | ||||||||
| Paying admissions as a percentage of total admissions | 94.3 | % | 94.6 | % | (0.3 | )% | * | |||||
| Charity and uninsured admissions as a percentage of total admissions | 5.7 | % | 5.4 | % | 0.3 | % | * | |||||
| Emergency department admissions as a percentage of total admissions | 72.2 | % | 69.1 | % | 3.1 | % | * | |||||
| Surgeries — inpatient | 44,553 | 45,052 | (1.1 | )% | ||||||||
| Surgeries — outpatient | 57,896 | 59,720 | (3.1 | )% | ||||||||
| Total surgeries | 102,449 | 104,772 | (2.2 | )% | ||||||||
| Patient days — total | 815,329 | 817,000 | (0.2 | )% | ||||||||
| Adjusted patient days | 1,408,053 | 1,405,568 | 0.2 | % | ||||||||
| Average length of stay (days) | 4.70 | 4.70 | — | % | ||||||||
| Licensed beds (at end of period) | 17,221 | 17,246 | (0.1 | )% | ||||||||
| Average licensed beds | 17,221 | 17,246 | (0.1 | )% | ||||||||
| Utilization of licensed beds | 52.6 | % | 52.6 | % | — | % | * | |||||
| Outpatient Visits | ||||||||||||
| Total visits | 1,696,094 | 1,730,018 | (2.0 | )% | ||||||||
| Paying visits (excludes charity and uninsured) | 1,586,627 | 1,619,950 | (2.1 | )% | ||||||||
| Charity and uninsured visits | 109,467 | 110,068 | (0.5 | )% | ||||||||
| Emergency department visits | 651,852 | 663,722 | (1.8 | )% | ||||||||
| Paying visits as a percentage of total visits | 93.5 | % | 93.6 | % | (0.1 | )% | * | |||||
| Charity and uninsured visits as a percentage of total visits | 6.5 | % | 6.4 | % | 0.1 | % | * | |||||
| Total emergency department admissions and visits | 777,080 | 783,679 | (0.8 | )% | ||||||||
| Revenues | ||||||||||||
| Net patient service revenues(2) | $ | 3,559 | $ | 3,494 | 1.9 | % | ||||||
| Revenues on a Per Adjusted Patient Admission and Per Adjusted |
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| Net patient service revenue(2) per adjusted patient admission | $ | 11,636 | $ | 11,488 | 1.3 | % | ||||||
| Net patient service revenue(2) per adjusted patient day | $ | 2,528 | $ | 2,486 | 1.7 | % | ||||||
| Net patient service revenues(2) from: | ||||||||||||
| Medicare | 21.0 | % | 20.9 | % | 0.1 | % | * | |||||
| Medicaid | 8.8 | % | 8.7 | % | 0.1 | % | * | |||||
| Managed care | 65.9 | % | 65.3 | % | 0.6 | % | * | |||||
| Uninsured | — | % | 1.3 | % | (1.3 | )% | * | |||||
| Indemnity and other | 4.3 | % | 3.8 | % | 0.5 | % | * | |||||
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(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 three months ended |
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(2) Less implicit price concessions. |
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* This change is the difference between the 2019 and 2018 amounts shown. |
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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
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| (Dollars in millions except per share amounts) | Three Months Ended | Year Ended | Three Months Ended | |||||||||||||||||||||
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| Net operating revenues | $ | 4,699 | $ | 4,506 | $ | 4,489 | $ | 4,619 | $ | 18,313 | $ | 4,545 | ||||||||||||
| Equity in earnings of unconsolidated affiliates | 25 | 39 | 33 | 53 | 150 | 34 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Salaries, wages and benefits | 2,227 | 2,135 | 2,116 | 2,156 | 8,634 | 2,153 | ||||||||||||||||||
| Supplies | 774 | 748 | 726 | 756 | 3,004 | 741 | ||||||||||||||||||
| Other operating expenses, net | 1,060 | 1,027 | 1,094 | 1,078 | 4,259 | 1,074 | ||||||||||||||||||
| Electronic health record incentives | (1 | ) | — | — | (2 | ) | (3 | ) | (1 | ) | ||||||||||||||
| Depreciation and amortization | 204 | 194 | 204 | 200 | 802 | 208 | ||||||||||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 47 | 30 | 46 | 86 | 209 | 19 | ||||||||||||||||||
| Litigation and investigation costs | 6 | 13 | 9 | 10 | 38 | 13 | ||||||||||||||||||
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Net losses (gains) on sales, consolidation and deconsolidation of facilities
|
(110 | ) | (8 | ) | 7 | (16 | ) | (127 | ) | 1 | ||||||||||||||
| Operating income | 517 | 406 | 320 | 404 | 1,647 | 371 | ||||||||||||||||||
| Interest expense | (255 | ) | (254 | ) | (249 | ) | (246 | ) | (1,004 | ) | (251 | ) | ||||||||||||
| Other non-operating income (expense), net | (1 | ) | (1 | ) | — | (3 | ) | (5 | ) | 1 | ||||||||||||||
| Gain (loss) from early extinguishment of debt | (1 | ) | (1 | ) | — | 3 | 1 | (47 | ) | |||||||||||||||
| Income from continuing operations, before income taxes | 260 | 150 | 71 | 158 | 639 | 74 | ||||||||||||||||||
| Income tax expense | (70 | ) | (44 | ) | (6 | ) | (56 | ) | (176 | ) | (17 | ) | ||||||||||||
|
Income from continuing operations, before discontinued operations |
190 | 106 | 65 | 102 | 463 | 57 | ||||||||||||||||||
| Discontinued operations: | ||||||||||||||||||||||||
| Income (loss) from operations | 1 | 2 | — | 1 | 4 | 10 | ||||||||||||||||||
| Income tax benefit (expense) | — | — | — | (1 | ) | (1 | ) | (2 | ) | |||||||||||||||
| Income (loss) from discontinued operations | 1 | 2 | — | — | 3 | 8 | ||||||||||||||||||
| Net income | 191 | 108 | 65 | 102 | 466 | 65 | ||||||||||||||||||
| Less: Net income available to noncontrolling interests | 92 | 82 | 74 | 107 | 355 | 84 | ||||||||||||||||||
|
Net income available (loss attributable) to |
$ | 99 | $ | 26 | $ | (9 | ) | $ | (5 | ) | $ | 111 | $ | (19 | ) | |||||||||
|
Amounts available (attributable) to |
||||||||||||||||||||||||
| Income (loss) from continuing operations, net of tax | $ | 98 | $ | 24 | $ | (9 | ) | $ | (5 | ) | $ | 108 | $ | (27 | ) | |||||||||
| Income (loss) from discontinued operations, net of tax | 1 | 2 | — | — | 3 | 8 | ||||||||||||||||||
|
Net income available (loss attributable) to |
$ | 99 | $ | 26 | $ | (9 | ) | $ | (5 | ) | $ | 111 | $ | (19 | ) | |||||||||
|
Earnings (loss) per share available (attributable) to |
||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||
| Continuing operations | $ | 0.97 | $ | 0.23 | $ | (0.09 | ) | $ | (0.05 | ) | $ | 1.06 | $ | (0.26 | ) | |||||||||
| Discontinued operations | 0.01 | 0.02 | — | $ | — | 0.03 | 0.08 | |||||||||||||||||
| $ | 0.98 | $ | 0.25 | $ | (0.09 | ) | $ | (0.05 | ) | $ | 1.09 | $ | (0.18 | ) | ||||||||||
| Diluted | ||||||||||||||||||||||||
| Continuing operations | $ | 0.95 | $ | 0.23 | $ | (0.09 | ) | $ | (0.05 | ) | $ | 1.04 | $ | (0.26 | ) | |||||||||
| Discontinued operations | 0.01 | 0.02 | 0.00 | 0.00 | 0.03 | 0.08 | ||||||||||||||||||
| $ | 0.96 | $ | 0.25 | $ | (0.09 | ) | $ | (0.05 | ) | $ | 1.07 | $ | (0.18 | ) | ||||||||||
|
Weighted average shares and dilutive securities outstanding (in thousands): |
||||||||||||||||||||||||
| Basic | 101,392 | 102,147 | 102,402 | 102,501 | 102,110 | 102,788 | ||||||||||||||||||
| Diluted | 102,656 | 104,177 | 102,402 | 102,501 | 103,881 | 102,788 | ||||||||||||||||||
|
SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) (Unaudited) |
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|
(Dollars in millions except per adjusted patient day and per adjusted patient admission amounts) |
||||||||||||||||||||||||
| Three Months Ended | Year Ended | Three Months Ended | ||||||||||||||||||||||
| |
|
|
|
|
|
|||||||||||||||||||
| Admissions, |
||||||||||||||||||||||||
| Number of hospitals (at end of period) | 69 | 68 | 68 | 68 | 68 | 65 | ||||||||||||||||||
| Total admissions | 182,306 | 168,453 | 168,201 | 170,407 | 689,367 | 174,726 | ||||||||||||||||||
| Adjusted patient admissions | 320,868 | 306,063 | 306,197 | 308,113 | 1,241,241 | 308,133 | ||||||||||||||||||
| Paying admissions (excludes charity and uninsured) | 172,490 | 158,216 | 157,193 | 160,172 | 648,071 | 164,793 | ||||||||||||||||||
| Charity and uninsured admissions | 9,816 | 10,237 | 11,008 | 10,235 | 41,296 | 9,933 | ||||||||||||||||||
| Admissions through emergency department | 125,076 | 115,036 | 116,727 | 120,012 | 476,851 | 126,079 | ||||||||||||||||||
| Paying admissions as a percentage of total admissions | 94.6 | % | 93.9 | % | 93.5 | % | 94.0 | % | 94.0 | % | 94.3 | % | ||||||||||||
| Charity and uninsured admissions as a percentage of total admissions | 5.4 | % | 6.1 | % | 6.5 | % | 6.0 | % | 6.0 | % | 5.7 | % | ||||||||||||
| Emergency department admissions as a percentage of total admissions | 68.6 | % | 68.3 | % | 69.4 | % | 70.4 | % | 69.2 | % | 72.2 | % | ||||||||||||
| Surgeries — inpatient | 47,223 | 46,274 | 45,626 | 45,897 | 185,020 | 44,795 | ||||||||||||||||||
| Surgeries — outpatient | 63,008 | 63,805 | 61,468 | 62,638 | 250,919 | 58,218 | ||||||||||||||||||
| Total surgeries | 110,231 | 110,079 | 107,094 | 108,535 | 435,939 | 103,013 | ||||||||||||||||||
| Patient days — total | 858,648 | 766,519 | 761,920 | 779,728 | 3,166,815 | 822,079 | ||||||||||||||||||
| Adjusted patient days | 1,486,139 | 1,373,480 | 1,365,662 | 1,383,372 | 5,608,653 | 1,420,170 | ||||||||||||||||||
| Average length of stay (days) | 4.71 | 4.55 | 4.53 | 4.58 | 4.59 | 4.70 | ||||||||||||||||||
| Licensed beds (at end of period) | 18,457 | 18,314 | 18,302 | 17,937 | 17,937 | 17,221 | ||||||||||||||||||
| Average licensed beds | 18,685 | 18,362 | 18,302 | 17,935 | 18,321 | 17,455 | ||||||||||||||||||
| Utilization of licensed beds | 51.1 | % | 45.9 | % | 45.3 | % | 47.3 | % | 47.4 | % | 52.3 | % | ||||||||||||
| Outpatient Visits | ||||||||||||||||||||||||
| Total visits | 1,842,539 | 1,749,847 | 1,722,292 | 1,734,523 | 7,049,201 | 1,714,392 | ||||||||||||||||||
| Paying visits (excludes charity and uninsured) | 1,725,976 | 1,633,372 | 1,607,184 | 1,617,970 | 6,584,502 | 1,603,712 | ||||||||||||||||||
| Charity and uninsured visits | 116,563 | 116,475 | 115,108 | 116,553 | 464,699 | 110,680 | ||||||||||||||||||
| Emergency department visits | 697,001 | 643,036 | 638,248 | 649,544 | 2,627,829 | 657,449 | ||||||||||||||||||
| Paying visits as a percentage of total visits | 93.7 | % | 93.3 | % | 93.3 | % | 93.3 | % | 93.4 | % | 93.5 | % | ||||||||||||
| Charity and uninsured visits as a percentage of total visits | 6.3 | % | 6.7 | % | 6.7 | % | 6.7 | % | 6.6 | % | 6.5 | % | ||||||||||||
| Total emergency department admissions and visits | 822,077 | 758,072 | 754,975 | 769,556 | 3,104,680 | 783,528 | ||||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Net patient service revenues(3) | $ | 3,643 | $ | 3,443 | $ | 3,434 | $ | 3,561 | $ | 14,081 | $ | 3,582 | ||||||||||||
| Revenues on a Per Adjusted Patient Admission and Per Adjusted |
||||||||||||||||||||||||
|
Net patient service revenue(3) per adjusted patient admission |
$ | 11,354 | $ | 11,249 | $ | 11,215 | $ | 11,557 | $ | 11,344 | $ | 11,625 | ||||||||||||
| Net patient service revenue(3) per adjusted patient day | $ | 2,451 | $ | 2,507 | $ | 2,515 | $ | 2,574 | $ | 2,511 | $ | 2,522 | ||||||||||||
| 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 | $ | 10,979 | ||||||||||||
| Net patient service revenues(3) from: | ||||||||||||||||||||||||
| Medicare | 21.5 | % | 20.4 | % | 19.8 | % | 20.1 | % | 20.5 | % | 21.2 | % | ||||||||||||
| Medicaid | 8.8 | % | 9.1 | % | 9.8 | % | 9.1 | % | 9.2 | % | 8.8 | % | ||||||||||||
| Managed care | 65.0 | % | 66.0 | % | 64.9 | % | 65.8 | % | 65.4 | % | 65.7 | % | ||||||||||||
| Uninsured | 1.0 | % | 0.2 | % | 0.9 | % | 0.5 | % | 0.7 | % | — | % | ||||||||||||
| Indemnity and other | 3.7 | % | 4.3 | % | 4.6 | % | 4.5 | % | 4.2 | % | 4.3 | % | ||||||||||||
|
(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. |
||||||||||||||||||||||||
|
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 | Three Months Ended | ||||||||||||||||||||||
| |
|
|
|
|
|
|||||||||||||||||||
| Admissions, |
||||||||||||||||||||||||
| Number of hospitals (at end of period) | 65 | 65 | 65 | 65 | 65 | 65 | ||||||||||||||||||
| Total admissions | 173,684 | 163,903 | 164,075 | 166,458 | 668,120 | 173,470 | ||||||||||||||||||
| Adjusted patient admissions | 304,145 | 297,460 | 298,221 | 300,562 | 1,200,388 | 305,871 | ||||||||||||||||||
| Paying admissions (excludes charity and uninsured) | 164,239 | 153,816 | 153,227 | 156,392 | 627,674 | 163,632 | ||||||||||||||||||
| Charity and uninsured admissions | 9,445 | 10,087 | 10,848 | 10,066 | 40,446 | 9,838 | ||||||||||||||||||
| Admissions through emergency department | 119,957 | 111,902 | 113,833 | 117,229 | 462,921 | 125,228 | ||||||||||||||||||
| Paying admissions as a percentage of total admissions | 94.6 | % | 93.8 | % | 93.4 | % | 94.0 | % | 93.9 | % | 94.3 | % | ||||||||||||
| Charity and uninsured admissions as a percentage of total admissions | 5.4 | % | 6.2 | % | 6.6 | % | 6.0 | % | 6.1 | % | 5.7 | % | ||||||||||||
| Emergency department admissions as a percentage of total admissions | 69.1 | % | 68.3 | % | 69.4 | % | 70.4 | % | 69.3 | % | 72.2 | % | ||||||||||||
| Surgeries — inpatient | 45,052 | 45,191 | 44,783 | 45,012 | 180,038 | 44,553 | ||||||||||||||||||
| Surgeries — outpatient | 59,720 | 62,205 | 60,080 | 61,151 | 243,156 | 57,896 | ||||||||||||||||||
| Total surgeries | 104,772 | 107,396 | 104,863 | 106,163 | 423,194 | 102,449 | ||||||||||||||||||
| Patient days — total | 817,000 | 743,442 | 740,870 | 758,359 | 3,059,671 | 815,329 | ||||||||||||||||||
| Adjusted patient days | 1,405,568 | 1,329,915 | 1,325,229 | 1,342,745 | 5,403,457 | 1,408,053 | ||||||||||||||||||
| Average length of stay (days) | 4.70 | 4.54 | 4.52 | 4.56 | 4.58 | 4.70 | ||||||||||||||||||
| Licensed beds (at end of period) | 17,246 | 17,246 | 17,234 | 17,237 | 17,237 | 17,221 | ||||||||||||||||||
| Average licensed beds | 17,246 | 17,246 | 17,234 | 17,235 | 17,240 | 17,221 | ||||||||||||||||||
| Utilization of licensed beds | 52.6 | % | 47.4 | % | 46.7 | % | 47.8 | % | 48.6 | % | 52.6 | % | ||||||||||||
| Outpatient Visits | ||||||||||||||||||||||||
| Total visits | 1,730,018 | 1,683,879 | 1,658,292 | 1,670,272 | 6,742,461 | 1,696,094 | ||||||||||||||||||
| Paying visits (excludes charity and uninsured) | 1,619,950 | 1,571,574 | 1,547,384 | 1,558,357 | 6,297,265 | 1,586,627 | ||||||||||||||||||
| Charity and uninsured visits | 110,068 | 112,305 | 110,908 | 111,915 | 445,196 | 109,467 | ||||||||||||||||||
| Emergency department visits | 663,722 | 622,898 | 617,925 | 630,557 | 2,535,102 | 651,852 | ||||||||||||||||||
| Paying visits as a percentage of total visits | 93.6 | % | 93.3 | % | 93.3 | % | 93.3 | % | 93.4 | % | 93.5 | % | ||||||||||||
| Charity and uninsured visits as a percentage of total visits | 6.4 | % | 6.7 | % | 6.7 | % | 6.7 | % | 6.6 | % | 6.5 | % | ||||||||||||
| Total emergency department admissions and visits | 783,679 | 734,800 | 731,758 | 747,786 | 2,998,023 | 777,080 | ||||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Net patient service revenues(2) | $ | 3,494 | $ | 3,358 | $ | 3,369 | $ | 3,492 | $ | 13,713 | $ | 3,559 | ||||||||||||
| Revenues on a Per Adjusted Patient Admission and Per Adjusted |
||||||||||||||||||||||||
|
Net patient service revenue(2) per adjusted patient admission |
$ | 11,488 | $ | 11,289 | $ | 11,297 | $ | 11,618 | $ | 11,424 | $ | 11,636 | ||||||||||||
| Net patient service revenue(2) per adjusted patient day | $ | 2,486 | $ | 2,525 | $ | 2,542 | $ | 2,601 | $ | 2,538 | $ | 2,528 | ||||||||||||
| Net patient service revenues(2) from: | ||||||||||||||||||||||||
| Medicare | 20.9 | % | 20.1 | % | 19.5 | % | 19.8 | % | 20.1 | % | 21.0 | % | ||||||||||||
| Medicaid | 8.7 | % | 8.9 | % | 9.8 | % | 9.1 | % | 9.1 | % | 8.8 | % | ||||||||||||
| Managed care | 65.3 | % | 66.4 | % | 65.2 | % | 66.1 | % | 65.8 | % | 65.9 | % | ||||||||||||
| Uninsured | 1.3 | % | 0.2 | % | 0.9 | % | 0.5 | % | 0.7 | % | — | % | ||||||||||||
| Indemnity and other | 3.8 | % | 4.4 | % | 4.6 | % | 4.5 | % | 4.3 | % | 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 three months ended |
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|
(2) Less implicit price concessions. |
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|
SEGMENT REPORTING (Unaudited) |
||||||||
| (Dollars in millions) | |
|
||||||
| 2019 | 2018 | |||||||
| Assets | ||||||||
| Hospital Operations and other | $ | 16,070 | $ | 15,684 | ||||
| Ambulatory Care | 6,014 | 5,711 | ||||||
| Conifer | 1,074 | 1,014 | ||||||
| Total | $ | 23,158 | $ | 22,409 | ||||
| Three Months Ended | ||||||||
| |
||||||||
| 2019 | 2018 | |||||||
| Capital expenditures: | ||||||||
| Hospital Operations and other | $ | 170 | $ | 120 | ||||
| Ambulatory Care | 20 | 15 | ||||||
| Conifer | 2 | 8 | ||||||
| Total | $ | 192 | $ | 143 | ||||
| Net operating revenues: | ||||||||
|
Hospital Operations and other total prior to inter-segment eliminations(1) |
$ | 3,862 | $ | 3,947 | ||||
| Ambulatory Care | 480 | 498 | ||||||
| Conifer | ||||||||
| Tenet | 146 | 150 | ||||||
| Other customers | 203 | 254 | ||||||
| Total Conifer revenues | 349 | 404 | ||||||
| Inter-segment eliminations | (146 | ) | (150 | ) | ||||
| Total | $ | 4,545 | $ | 4,699 | ||||
| Equity in earnings of unconsolidated affiliates: | ||||||||
| Hospital Operations and other | $ | 3 | $ | (2 | ) | |||
| Ambulatory Care | 31 | 27 | ||||||
| Total | $ | 34 | $ | 25 | ||||
| Adjusted EBITDA: | ||||||||
| Hospital Operations and other(2) | $ | 337 | $ | 402 | ||||
| Ambulatory Care | 177 | 165 | ||||||
| Conifer | 99 | 98 | ||||||
| Total | $ | 613 | $ | 665 | ||||
| Depreciation and amortization: | ||||||||
| Hospital Operations and other | $ | 179 | $ | 175 | ||||
| Ambulatory Care | 18 | 17 | ||||||
| Conifer | 11 | 12 | ||||||
| Total | $ | 208 | $ | 204 | ||||
|
(1) Hospital Operations and other revenues includes health plan revenues of less than |
||||||||
|
(2) Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of |
||||||||
|
STATEMENTS OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited) |
||||||||||||||||
|
(Dollars in millions) |
Three Months Ended |
|||||||||||||||
| 2019 | 2018 | |||||||||||||||
| Ambulatory Care as Reported Under GAAP | Unconsolidated Affiliates | Ambulatory Care as Reported Under GAAP | Unconsolidated Affiliates | |||||||||||||
| Net operating revenues(1) | $ | 480 | $ | 568 | $ | 498 | $ | 493 | ||||||||
| Equity in earnings of unconsolidated affiliates(2) | 31 | — | 27 | — | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries, wages and benefits | 153 | 147 | 162 | 120 | ||||||||||||
| Supplies | 99 | 149 | 106 | 130 | ||||||||||||
| Other operating expenses, net | 82 | 126 | 92 | 105 | ||||||||||||
| Depreciation and amortization | 18 | 20 | 17 | 16 | ||||||||||||
|
Impairment and restructuring charges, and acquisition-related costs |
3 | — | 1 | — | ||||||||||||
|
Net gains on sales, consolidation and deconsolidation of facilities |
(5 | ) | (26 | ) | (1 | ) | — | |||||||||
| Operating income | 161 | 152 | 148 | 122 | ||||||||||||
| Interest expense | (31 | ) | (7 | ) | (36 | ) | (5 | ) | ||||||||
| Other | 3 | 6 | 2 | — | ||||||||||||
| Net income from continuing operations, before income taxes | 133 | 151 | 114 | 117 | ||||||||||||
| Income tax expense | (15 | ) | (2 | ) | (15 | ) | (2 | ) | ||||||||
| Net income | 118 | $ | 149 | 99 | $ | 115 | ||||||||||
| Less: Net income available to noncontrolling interests | 68 | 64 | ||||||||||||||
| Net income available (loss attributable) to |
$ | 50 | $ | 35 | ||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | 31 | $ | 27 | ||||||||||||
|
(1) On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 4.2% during the three months ended |
||||||||||||||||
|
(2) At |
||||||||||||||||
Non-GAAP Financial Measures
Adjusted EBITDA, a non-GAAP measure, is defined by the Company as net income available (loss attributable) to
Adjusted net income available (loss attributable) from continuing operations to
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
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
|
Additional Supplemental Non-GAAP disclosures Table #1 – Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA (Unaudited) |
||||||||||||||||||||||||
| (Dollars in millions) | 2018 | 2019 | ||||||||||||||||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Total | 1st Qtr | |||||||||||||||||||
| Net income available (loss attributable) to |
$ | 99 | $ | 26 | $ | (9 | ) | $ | (5 | ) | $ | 111 | $ | (19 | ) | |||||||||
| Less: Net income available to noncontrolling interests | (92 | ) | (82 | ) | (74 | ) | (107 | ) | (355 | ) | (84 | ) | ||||||||||||
| Income from discontinued operations, net of tax | 1 | 2 | — | — | 3 | 8 | ||||||||||||||||||
| Income from continuing operations | 190 | 106 | 65 | 102 | 463 | 57 | ||||||||||||||||||
| Income tax expense | (70 | ) | (44 | ) | (6 | ) | (56 | ) | (176 | ) | (17 | ) | ||||||||||||
| Gain (loss) from early extinguishment of debt | (1 | ) | (1 | ) | — | 3 | 1 | (47 | ) | |||||||||||||||
| Other non-operating income (expense), net | (1 | ) | (1 | ) | — | (3 | ) | (5 | ) | 1 | ||||||||||||||
| Interest expense | (255 | ) | (254 | ) | (249 | ) | (246 | ) | (1,004 | ) | (251 | ) | ||||||||||||
| Operating income | 517 | 406 | 320 | 404 | 1,647 | 371 | ||||||||||||||||||
| Litigation and investigation costs | (6 | ) | (13 | ) | (9 | ) | (10 | ) | (38 | ) | (13 | ) | ||||||||||||
| Net gains (losses) on sales, consolidation and deconsolidation of facilities | 110 | 8 | (7 | ) | 16 | 127 | (1 | ) | ||||||||||||||||
| Impairment and restructuring charges, and acquisition-related costs | (47 | ) | (30 | ) | (46 | ) | (86 | ) | (209 | ) | (19 | ) | ||||||||||||
| Depreciation and amortization | (204 | ) | (194 | ) | (204 | ) | (200 | ) | (802 | ) | (208 | ) | ||||||||||||
| Income (loss) from divested and closed businesses | (1 | ) | 1 | 9 | — | 9 | (1 | ) | ||||||||||||||||
| Adjusted EBITDA | $ | 665 | $ | 634 | $ | 577 | $ | 684 | $ | 2,560 | $ | 613 | ||||||||||||
| Net operating revenues | $ | 4,699 | $ | 4,506 | $ | 4,489 | $ | 4,619 | $ | 18,313 | $ | 4,545 | ||||||||||||
| Less: Net operating revenues from health plans | 6 | — | 8 | — | 14 | — | ||||||||||||||||||
| Adjusted net operating revenues | $ | 4,693 | $ | 4,506 | $ | 4,481 | $ | 4,619 | $ | 18,299 | $ | 4,545 | ||||||||||||
| Net income available (loss attributable) to |
2.1 | % | 0.6 | % | (0.2 | )% | (0.1 | )% | 0.6 | % | (0.4 | )% | ||||||||||||
| Adjusted EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA margin) | 14.2 | % | 14.1 | % | 12.9 | % | 14.8 | % | 14.0 | % | 13.5 | % | ||||||||||||
|
Additional Supplemental Non-GAAP disclosures Table #2 – Reconciliations of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders (Unaudited) |
||||||||||||||||||||||||
| (Dollars in millions except per share amounts) | 2018 | 2019 | ||||||||||||||||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Total | 1st Qtr | |||||||||||||||||||
| Net income available (loss attributable) to |
$ | 99 | $ | 26 | $ | (9 | ) | $ | (5 | ) | $ | 111 | $ | (19 | ) | |||||||||
| Net income from discontinued operations | 1 | $ | 2 | — | — | 3 | 8 | |||||||||||||||||
| Net income (loss) from continuing operations | 98 | 24 | (9 | ) | (5 | ) | 108 | (27 | ) | |||||||||||||||
|
Less: Impairment and restructuring charges, and acquisition-related costs |
(47 | ) | (30 | ) | (46 | ) | (86 | ) | (209 | ) | (19 | ) | ||||||||||||
| Litigation and investigation costs | (6 | ) | (13 | ) | (9 | ) | (10 | ) | (38 | ) | (13 | ) | ||||||||||||
| Net gains (losses) on sales, consolidation and deconsolidation of facilities | 110 | 8 | (7 | ) | 16 | 127 | (1 | ) | ||||||||||||||||
| Gain (loss) from early extinguishment of debt | (1 | ) | (1 | ) | — | 3 | 1 | (47 | ) | |||||||||||||||
| Income (loss) from divested and closed businesses | (1 | ) | 1 | 9 | — | 9 | (1 | ) | ||||||||||||||||
| Tax impact of above items | (16 | ) | 8 | 14 | 19 | 25 | (2 | ) | ||||||||||||||||
| Adjusted net income available from continuing operations to common shareholders | $ | 59 | $ | 51 | $ | 30 | $ | 53 | $ | 193 | $ | 56 | ||||||||||||
| Diluted earnings (loss) per share from continuing operations | $ | 0.95 | $ | 0.23 | $ | (0.09 | ) | $ | (0.05 | ) | $ | 1.04 | $ | (0.26 | ) | |||||||||
|
Less: Impairment and restructuring charges, and acquisition-related costs |
(0.46 | ) | (0.29 | ) | (0.44 | ) | (0.83 | ) | (2.01 | ) | (0.18 | ) | ||||||||||||
| Litigation and investigation costs | (0.06 | ) | (0.12 | ) | (0.09 | ) | (0.10 | ) | (0.37 | ) | (0.12 | ) | ||||||||||||
| Net gains (losses) on sales, consolidation and deconsolidation of facilities | 1.08 | 0.07 | (0.07 | ) | 0.15 | 1.22 | (0.01 | ) | ||||||||||||||||
| Gain (loss) from early extinguishment of debt | (0.01 | ) | (0.01 | ) | — | 0.03 | 0.01 | (0.45 | ) | |||||||||||||||
| Income (loss) from divested and closed businesses | (0.01 | ) | 0.01 | 0.09 | — | 0.09 | (0.01 | ) | ||||||||||||||||
| Tax impact of above items | (0.16 | ) | 0.08 | 0.13 | 0.18 | 0.24 | (0.02 | ) | ||||||||||||||||
| Adjusted diluted earnings per share from continuing operations | $ | 0.57 | $ | 0.49 | $ | 0.29 | $ | 0.51 | $ | 1.86 | $ | 0.54 | ||||||||||||
|
Weighted average basic shares outstanding (in thousands) |
101,392 | 102,147 | 102,402 | 102,501 | 102,110 | 102,788 | ||||||||||||||||||
|
Weighted average dilutive shares outstanding (in thousands) |
102,656 | 104,177 | 104,575 | 104,118 | 103,881 | 104,541 | ||||||||||||||||||
|
Additional Supplemental Non-GAAP disclosures Table #3 – Reconciliations of Net Cash Provided By Operating Activities to Free Cash Flow and Adjusted Free Cash Flow from Continuing Operations (Unaudited) |
||||||||||||||||||||||||
| (Dollars in millions) | 2018 | 2019 | ||||||||||||||||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Total | 1st Qtr | |||||||||||||||||||
| Net cash provided by operating activities | $ | 113 | $ | 348 | $ | 338 | $ | 250 | $ | 1,049 | $ | 10 | ||||||||||||
| Purchases of property and equipment | (143 | ) | (125 | ) | (136 | ) | (213 | ) | (617 | ) | (192 | ) | ||||||||||||
| Free cash flow | $ | (30 | ) | $ | 223 | $ | 202 | $ | 37 | $ | 432 | $ | (182 | ) | ||||||||||
| Net cash provided by (used in) investing activities | $ | 373 | $ | (148 | ) | $ | (105 | ) | $ | (235 | ) | $ | (115 | ) | $ | (139 | ) | |||||||
| Net cash used in financing activities | $ | (123 | ) | $ | (771 | ) | $ | (136 | ) | $ | (104 | ) | $ | (1,134 | ) | $ | (30 | ) | ||||||
| Net cash provided by operating activities | $ | 113 | $ | 348 | $ | 338 | $ | 250 | $ | 1,049 | $ | 10 | ||||||||||||
|
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements |
(33 | ) | (30 | ) | (50 | ) | (50 | ) | (163 | ) | (32 | ) | ||||||||||||
|
Net cash used in operating activities from discontinued operations |
(1 | ) | (2 | ) | (1 | ) | (1 | ) | (5 | ) | (2 | ) | ||||||||||||
| Adjusted net cash provided by operating activities from continuing operations | 147 | 380 | 389 | 301 | 1,217 | 44 | ||||||||||||||||||
| Purchases of property and equipment | (143 | ) | (125 | ) | (136 | ) | (213 | ) | (617 | ) | (192 | ) | ||||||||||||
| Adjusted free cash flow – continuing operations | $ | 4 | $ | 255 | $ | 253 | $ | 88 | $ | 600 | $ | (148 | ) | |||||||||||
|
Additional Supplemental Non-GAAP disclosures Table #4 – Reconciliation of Outlook Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted EBITDA (Unaudited) |
||||||||||||||||
| (Dollars in millions) | Q2 2019 | 2019 | ||||||||||||||
| Low | High | Low | High | |||||||||||||
| Net income available (loss attributable) to |
$ | (10 | ) | $ | 40 | $ | 17 | $ | 122 | |||||||
| Less: Net income available to noncontrolling interests | (100 | ) | (110 | ) | (425 | ) | (445 | ) | ||||||||
| Net income (loss) from discontinued operations, net of tax | (5 | ) | — | — | 5 | |||||||||||
| Income tax expense | (30 | ) | (40 | ) | (165 | ) | (185 | ) | ||||||||
| Interest expense | (250 | ) | (240 | ) | (995 | ) | (985 | ) | ||||||||
| Loss from early extinguishment of debt(1) | — | — | (47 | ) | (47 | ) | ||||||||||
| Other non-operating expense, net | (5 | ) | (5 | ) | (10 | ) | (15 | ) | ||||||||
| Net gains (losses) on sales, consolidation and deconsolidation of facilities(1) | — | — | (1 | ) | (1 | ) | ||||||||||
| Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(2) | (40 | ) | (30 | ) | (175 | ) | (125 | ) | ||||||||
| Depreciation and amortization | (200 | ) | (210 | ) | (805 | ) | (825 | ) | ||||||||
| Income (loss) from divested and closed businesses | (5 | ) | — | (10 | ) | (5 | ) | |||||||||
| Adjusted EBITDA | $ | 625 | $ | 675 | $ | 2,650 | $ | 2,750 | ||||||||
| Income (loss) from continuing operations | $ | (5 | ) | $ | 40 | $ | 17 | $ | 117 | |||||||
| Net operating revenues | $ | 4,400 | $ | 4,700 | $ | 18,000 | $ | 18,400 | ||||||||
| Income (loss) from continuing operations as a % of operating revenues | (0.1 | )% | 0.9 | % | 0.1 | % | 0.6 | % | ||||||||
| Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin) | 14.2 | % | 14.4 | % | 14.7 | % | 14.9 | % | ||||||||
|
(1)The Company does not generally forecast losses from the early extinguishment of debt or net gains (losses) on sales, consolidation and deconsolidation of facilities because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. The figures shown represent the Company's actual year-to-date results for these items. |
||||||||||||||||
|
(2) The Company has provided an estimate of restructuring charges and related payments that it anticipates in 2019. The figures shown represent the Company's estimate for restructuring charges plus the actual year-to-date results for impairment charges, acquisition-related costs, and litigation costs and settlements. The Company does not generally forecast impairment charges, acquisition-related costs, litigation costs and settlements because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. |
||||||||||||||||
|
Additional Supplemental Non-GAAP disclosures Table #5 – Reconciliations of Outlook Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted Net Income Available from Continuing Operations to Common Shareholders (Unaudited) |
||||||||||||||||
| (Dollars in millions except per share amounts) | Q2 2019 | 2019 | ||||||||||||||
| Low | High | Low | High | |||||||||||||
| Net income available (loss attributable) to |
$ | (10 | ) | $ | 40 | $ | 17 | $ | 122 | |||||||
| Net income (loss) from discontinued operations, net of tax | (5 | ) | — | — | 5 | |||||||||||
| Net income (loss) from continuing operations | (5 | ) | 40 | 17 | 117 | |||||||||||
|
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements |
(40 | ) | (30 | ) | (175 | ) | (125 | ) | ||||||||
| Net gains (losses) on sales, consolidation and deconsolidation of facilities | — | — | (1 | ) | (1 | ) | ||||||||||
| Loss from early extinguishment of debt | — | — | (47 | ) | (47 | ) | ||||||||||
| Income (loss) from divested and closed businesses | (5 | ) | — | (10 | ) | (5 | ) | |||||||||
| Tax impact of above items | 10 | 5 | 30 | 20 | ||||||||||||
| Adjusted net income available from continuing operations to common shareholders | $ | 30 | $ | 65 | $ | 220 | $ | 275 | ||||||||
| Diluted earnings (loss) per share from continuing operations | $ | (0.05 | ) | $ | 0.38 | $ | 0.16 | $ | 1.10 | |||||||
|
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements |
(0.38 | ) | (0.29 | ) | (1.65 | ) | (1.18 | ) | ||||||||
| Net gains (losses) on sales, consolidation and deconsolidation of facilities | — | — | (0.01 | ) | (0.01 | ) | ||||||||||
| Loss from early extinguishment of debt | — | — | (0.44 | ) | (0.44 | ) | ||||||||||
| Income (loss) from divested and closed businesses | (0.05 | ) | — | (0.09 | ) | (0.05 | ) | |||||||||
| Tax impact of above items | 0.10 | 0.05 | 0.27 | 0.19 | ||||||||||||
| Adjusted diluted earnings per share from continuing operations | $ | 0.29 | $ | 0.63 | $ | 2.08 | $ | 2.59 | ||||||||
| Weighted average basic shares outstanding (in thousands) | 103,000 | 103,000 | 104,000 | 104,000 | ||||||||||||
| Weighted average dilutive shares outstanding (in thousands) | 104,000 | 104,000 | 106,000 | 106,000 | ||||||||||||
|
Additional Supplemental Non-GAAP disclosures Table #6 – Reconciliation of Outlook Net Cash Provided by Operating Activities to Outlook Adjusted Free Cash Flow from Continuing Operations |
||||||||
| (Dollars in millions) | 2019 | |||||||
| Low | High | |||||||
| Net cash provided by operating activities | $ | 1,070 | $ | 1,375 | ||||
|
Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1) |
(175 | ) | (125 | ) | ||||
|
Net cash used in operating activities from discontinued operations |
(5 | ) | — | |||||
| Adjusted net cash provided by operating activities – continuing operations | 1,250 | 1,500 | ||||||
| Purchases of property and equipment – continuing operations | (650 | ) | (700 | ) | ||||
| Adjusted free cash flow – continuing operations(2) | $ | 600 | $ | 800 | ||||
|
(1)The Company has provided an estimate of payments that it anticipates in 2019 related to restructuring charges. The Company does not generally forecast payments related to acquisition-related costs and litigation costs and settlements because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items may be indeterminable at the time the Company provides its financial Outlook. |
||||||||
|
(2) The Company's definition of Adjusted Free Cash Flow does not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company's Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, (ii) distributions paid to noncontrolling interests, or (iii) payments under the Put/Call Agreement for USPI redeemable noncontrolling interests, which are recorded on the Statement of Cash Flows as the purchase of noncontrolling interests. |
||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190429005759/en/
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