Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | TENET HEALTHCARE CORP | |
Entity Central Index Key | 70,318 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 102,498,300 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 500 | $ 611 |
Accounts receivable (less allowance for doubtful accounts of $898 at December 31, 2017) | 2,484 | 2,616 |
Inventories of supplies, at cost | 307 | 289 |
Income tax receivable | 27 | 5 |
Assets held for sale | 128 | 1,017 |
Other current assets | 1,046 | 1,035 |
Total current assets | 4,492 | 5,573 |
Investments and other assets | 1,462 | 1,543 |
Deferred income taxes | 348 | 455 |
Property and equipment, at cost, less accumulated depreciation and amortization ($5,169 at September 30, 2018 and $4,739 at December 31, 2017) | 6,888 | 7,030 |
Goodwill | 7,313 | 7,018 |
Other intangible assets, at cost, less accumulated amortization ($990 at September 30, 2018 and $883 at December 31, 2017) | 1,762 | 1,766 |
Total assets | 22,265 | 23,385 |
Current liabilities: | ||
Current portion of long-term debt | 672 | 146 |
Accounts payable | 1,065 | 1,175 |
Accrued compensation and benefits | 814 | 848 |
Professional and general liability reserves | 230 | 200 |
Accrued interest payable | 330 | 256 |
Liabilities held for sale | 71 | 480 |
Other current liabilities | 1,042 | 1,227 |
Total current liabilities | 4,224 | 4,332 |
Long-term debt, net of current portion | 14,178 | 14,791 |
Professional and general liability reserves | 627 | 654 |
Defined benefit plan obligations | 476 | 536 |
Deferred income taxes | 36 | 36 |
Other long-term liabilities | 622 | 631 |
Total liabilities | 20,163 | 20,980 |
Commitments and contingencies | ||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | 1,444 | 1,866 |
Shareholders’ equity: | ||
Common stock, $0.05 par value; authorized 262,500,000 shares; 150,806,763 shares issued at September 30, 2018 and 149,384,952 shares issued at December 31, 2017 | 7 | 7 |
Additional paid-in capital | 4,733 | 4,859 |
Accumulated other comprehensive loss | (202) | (204) |
Accumulated deficit | (2,231) | (2,390) |
Common stock in treasury, at cost, 48,360,191 shares at September 30, 2018 and 48,413,169 shares at December 31, 2017 | (2,415) | (2,419) |
Total shareholders’ deficit | (108) | (147) |
Noncontrolling interests | 766 | 686 |
Total equity | 658 | 539 |
Total liabilities and equity | $ 22,265 | $ 23,385 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 898 | |
Property and equipment, accumulated depreciation and amortization | $ 5,169 | 4,739 |
Other intangible assets, accumulated amortization | $ 990 | $ 883 |
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, authorized shares (in shares) | 262,500,000 | 262,500,000 |
Common stock, shares issued (in shares) | 150,806,763 | 149,384,952 |
Common stock in treasury (in shares) | 48,360,191 | 48,413,169 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net operating revenues: | ||||
Net operating revenues before provision for doubtful accounts | $ 4,941 | $ 15,310 | ||
Less: Provision for doubtful accounts | 355 | $ 0 | 1,109 | |
Net operating revenues | $ 4,489 | 4,586 | 13,694 | 14,201 |
Equity in earnings of unconsolidated affiliates | 33 | 38 | 97 | 95 |
Operating expenses: | ||||
Salaries, wages and benefits | 2,116 | 2,264 | 6,478 | 6,990 |
Supplies | 726 | 740 | 2,248 | 2,285 |
Other operating expenses, net | 1,094 | 1,120 | 3,181 | 3,466 |
Electronic health record incentives | 0 | (1) | (1) | (8) |
Depreciation and amortization | 204 | 219 | 602 | 662 |
Impairment and restructuring charges, and acquisition-related costs | 46 | 329 | 123 | 403 |
Litigation and investigation costs | 9 | 6 | 28 | 12 |
Net losses (gains) on sales, consolidation and deconsolidation of facilities | 7 | (104) | (111) | (142) |
Operating income | 320 | 51 | 1,243 | 628 |
Interest expense | (249) | (257) | (758) | (775) |
Other non-operating expense, net | 0 | (4) | (2) | (14) |
Loss from early extinguishment of debt | 0 | (138) | (2) | (164) |
Income (loss) from continuing operations, before income taxes | 71 | (348) | 481 | (325) |
Income tax benefit (expense) | (6) | 60 | (120) | 105 |
Income (loss) from continuing operations, before discontinued operations | 65 | (288) | 361 | (220) |
Discontinued operations: | ||||
Income (loss) from operations | 0 | (1) | 3 | (1) |
Income tax expense | 0 | 0 | 0 | 0 |
Income (loss) from discontinued operations | 0 | (1) | 3 | (1) |
Net income (loss) | 65 | (289) | 364 | (221) |
Less: Net income available to noncontrolling interests | 74 | 78 | 248 | 254 |
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | (9) | (367) | 116 | (475) |
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders | ||||
Income (loss) from continuing operations, net of tax | (9) | (366) | 113 | (474) |
Income (loss) from discontinued operations, net of tax | 0 | (1) | 3 | (1) |
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ (9) | $ (367) | $ 116 | $ (475) |
Basic | ||||
Continuing operations (in dollars per share) | $ (0.09) | $ (3.63) | $ 1.11 | $ (4.72) |
Discontinued operations (in dollars per share) | 0 | (0.01) | 0.03 | (0.01) |
Total loss per share, Basic (in dollars per share) | (0.09) | (3.64) | 1.14 | (4.73) |
Diluted | ||||
Continuing operations (in dollars per share) | (0.09) | (3.63) | 1.09 | (4.72) |
Discontinued operations (in dollars per share) | 0 | (0.01) | 0.03 | (0.01) |
Total loss per share, Diluted (in dollars per share) | $ (0.09) | $ (3.64) | $ 1.12 | $ (4.73) |
Weighted average shares and dilutive securities outstanding (in thousands): | ||||
Basic (in shares) | 102,402 | 100,812 | 101,980 | 100,475 |
Diluted (in shares) | 102,402 | 100,812 | 103,802 | 100,475 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 65 | $ (289) | $ 364 | $ (221) |
Other comprehensive income: | ||||
Amortization of net actuarial loss included in other non-operating expense, net | 3 | 4 | 11 | 12 |
Unrealized gains on securities held as available-for-sale | 0 | 2 | 0 | 5 |
Sale of foreign subsidiary | 37 | 0 | 37 | 0 |
Foreign currency translation adjustments | 0 | 5 | (3) | 14 |
Other comprehensive income before income taxes | 40 | 11 | 45 | 31 |
Income tax benefit (expense) related to items of other comprehensive income | 1 | (7) | 0 | (11) |
Total other comprehensive income, net of tax | 41 | 4 | 45 | 20 |
Comprehensive net income (loss) | 106 | (285) | 409 | (201) |
Less: Comprehensive income available to noncontrolling interests | 74 | 78 | 248 | 254 |
Comprehensive income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ 32 | $ (363) | $ 161 | $ (455) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net income (loss) | $ 364 | $ (221) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 602 | 662 |
Provision for doubtful accounts | 0 | 1,109 |
Deferred income tax expense (benefit) | 110 | (145) |
Stock-based compensation expense | 34 | 44 |
Impairment and restructuring charges, and acquisition-related costs | 123 | 403 |
Litigation and investigation costs | 28 | 12 |
Net losses (gains) on sales, consolidation and deconsolidation of facilities | (111) | (142) |
Loss from early extinguishment of debt | 2 | 164 |
Equity in earnings of unconsolidated affiliates, net of distributions received | 9 | (4) |
Amortization of debt discount and debt issuance costs | 33 | 33 |
Pre-tax loss (income) from discontinued operations | (3) | 1 |
Other items, net | (22) | (19) |
Changes in cash from operating assets and liabilities: | ||
Accounts receivable | (36) | (1,046) |
Inventories and other current assets | 73 | 97 |
Income taxes | (14) | (14) |
Accounts payable, accrued expenses and other current liabilities | (194) | (141) |
Other long-term liabilities | (82) | 7 |
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (113) | (88) |
Net cash used in operating activities from discontinued operations, excluding income taxes | (4) | (3) |
Net cash provided by operating activities | 799 | 709 |
Cash flows from investing activities: | ||
Purchases of property and equipment — continuing operations | (404) | (492) |
Purchases of businesses or joint venture interests, net of cash acquired | (97) | (41) |
Proceeds from sales of facilities and other assets | 498 | 826 |
Proceeds from sales of marketable securities, long-term investments and other assets | 165 | 20 |
Purchases of equity investments | (43) | (64) |
Other long-term assets | 5 | (16) |
Other items, net | (4) | (6) |
Net cash provided by investing activities | 120 | 227 |
Cash flows from financing activities: | ||
Repayments of borrowings under credit facility | (505) | (850) |
Proceeds from borrowings under credit facility | 505 | 850 |
Repayments of other borrowings | (238) | (4,099) |
Proceeds from other borrowings | 15 | 3,788 |
Debt issuance costs | 0 | (62) |
Distributions paid to noncontrolling interests | (217) | (178) |
Proceeds from sales of noncontrolling interests | 14 | 29 |
Purchases of noncontrolling interests | (643) | (722) |
Proceeds from exercise of stock options and employee stock purchase plan | 15 | 5 |
Other items, net | 24 | 16 |
Net cash used in financing activities | (1,030) | (1,223) |
Net decrease in cash and cash equivalents | (111) | (287) |
Cash and cash equivalents at beginning of period | 611 | 716 |
Cash and cash equivalents at end of period | 500 | 429 |
Supplemental disclosures: | ||
Interest paid, net of capitalized interest | (652) | (617) |
Income tax payments, net | $ (24) | $ (54) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Description of Business and Basis of Presentation Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is a diversified healthcare services company. At September 30, 2018 , we operated 68 hospitals, 21 surgical hospitals and approximately 475 outpatient centers in the United States through our subsidiaries, partnerships and joint ventures, including USPI Holding Company, Inc. (“USPI”). Our Conifer Holdings, Inc. (“Conifer”) subsidiary provides healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities . This quarterly report supplements our Annual Report on Form 10-K for the year ended December 31, 2017 (“Annual Report”). As permitted by the Securities and Exchange Commission for interim reporting, we have omitted certain notes and disclosures that substantially duplicate those in our Annual Report. For further information, refer to the audited Consolidated Financial Statements and notes included in our Annual Report. Unless otherwise indicated, all financial and statistical data included in these notes to our Condensed Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). Effective January 1, 2018, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) using a modified retrospective method of application to all contracts existing on January 1, 2018. The core principle of the guidance in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For our Hospital Operations and other and Ambulatory Care segments, the adoption of ASU 2014-09 resulted in changes to our presentation for and disclosure of revenue primarily related to uninsured or underinsured patients. Prior to the adoption of ASU 2014-09, a significant portion of our provision for doubtful accounts related to self-pay patients, as well as co-pays, co-insurance amounts and deductibles owed to us by patients with insurance. Under ASU 2014-09, the estimated uncollectable amounts due from these patients are generally considered implicit price concessions that are a direct reduction to net operating revenues, with a corresponding material reduction in the amounts presented separately as provision for doubtful accounts. For the nine months ended September 30, 2018 , we recorded approximately $1.052 billion of implicit price concessions as a direct reduction of net operating revenues that would have been recorded as provision for doubtful accounts prior to the adoption of ASU 2014-09. At January 1, 2018, we reclassified $171 million of revenues related to patients who were still receiving inpatient care in our facilities at that date from accounts receivable, less allowance for doubtful accounts, to contract assets, which are included in other current assets in the accompanying Condensed Consolidated Balance Sheet at September 30, 2018 . The adoption of ASU 2014-09 also resulted in changes to our presentation and disclosure of customer contract assets and liabilities and the assessment of variable consideration under customer contracts, which are further discussed in Note 3. Also effective January 1, 2018, we early adopted ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220)” (“ASU 2018-02”), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded income tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) and requires certain disclosures about stranded income tax effects. We applied the amendments in ASU 2018-02 in the period of adoption, resulting in a reclassification of $36 million of stranded income tax effects from accumulated other comprehensive loss to accumulated deficit in the three months ended March 31, 2018. In addition, we adopted ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) effective January 1, 2018, which supersedes the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. Upon adoption of ASU 2016-01 on January 1, 2018, we recorded a cumulative effect adjustment to decrease accumulated deficit by approximately $7 million for unrealized gains on equity securities. Also effective January 1, 2018, we adopted ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments” and ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash,” both of which were applied using a retrospective transition method to each period presented. The adoption of these standards did not have any effect on our statements of cash flows. Although the Condensed Consolidated Financial Statements and related notes within this document are unaudited, we believe all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. In preparing our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), we are required to make estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and these accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable given the particular circumstances in which we operate. Actual results may vary from those estimates. Financial and statistical information we report to other regulatory agencies may be prepared on a basis other than GAAP or using different assumptions or reporting periods and, therefore, may vary from amounts presented herein. Although we make every effort to ensure that the information we report to those agencies is accurate, complete and consistent with applicable reporting guidelines, we cannot be responsible for the accuracy of the information they make available to the public. Operating results for the three and nine month periods ended September 30, 2018 are not necessarily indicative of the results that may be expected for the full year. Reasons for this include, but are not limited to: overall revenue and cost trends, particularly the timing and magnitude of price changes; fluctuations in contractual allowances and cost report settlements and valuation allowances; managed care contract negotiations, settlements or terminations and payer consolidations; changes in Medicare and Medicaid regulations; Medicaid and other supplemental funding levels set by the states in which we operate; the timing of approval by the Centers for Medicare and Medicaid Services of Medicaid provider fee revenue programs; trends in patient accounts receivable collectability and associated implicit price concessions; fluctuations in interest rates; levels of malpractice insurance expense and settlement trends; impairment of long-lived assets and goodwill; restructuring charges; losses, costs and insurance recoveries related to natural disasters and other weather-related occurrences; litigation and investigation costs; acquisitions and dispositions of facilities and other assets; gains (losses) on sales, consolidation and deconsolidation of facilities; income tax rates and deferred tax asset valuation allowance activity; changes in estimates of accruals for annual incentive compensation; the timing and amounts of stock option and restricted stock unit grants to employees and directors; gains or losses from early extinguishment of debt; and changes in occupancy levels and patient volumes. Factors that affect patient volumes and, thereby, the results of operations at our hospitals and related healthcare facilities include, but are not limited to: changes in federal and state healthcare regulations; the business environment, economic conditions and demographics of local communities in which we operate; the number of uninsured and underinsured individuals in local communities treated at our hospitals; seasonal cycles of illness; climate and weather conditions; physician recruitment, retention and attrition; advances in technology and treatments that reduce length of stay; local healthcare competitors; managed care contract negotiations or terminations; the number of patients with high-deductible health insurance plans; hospital performance data on quality measures and patient satisfaction, as well as standard charges for our services; any unfavorable publicity about us, or our joint venture partners, that impacts our relationships with physicians and patients; and the timing of elective procedures. These considerations apply to year-to-year comparisons as well. Translation of Foreign Currencies We divested European Surgical Partners Limited (“Aspen”) in August of 2018; prior to that time, Aspen’s accounts were measured in its local currency (the pound sterling) and then translated into U.S. dollars. All assets and liabilities were translated using the current rate of exchange at the balance sheet date. Results of operations were translated using the average rates prevailing throughout the period of operations. Translation gains or losses resulting from changes in exchange rates were accumulated in shareholders’ equity until we divested Aspen. Net Operating Revenues ASU 2014-09 was issued to clarify the principles for recognizing revenue, to remove inconsistencies and weaknesses in revenue recognition requirements, and to provide a more robust framework for addressing revenue issues. Our adoption of ASU 2014-09 was accomplished using a modified retrospective method of application, and our accounting policies related to revenues were revised accordingly effective January 1, 2018, as discussed below. We recognize net operating revenues in the period in which we satisfy our performance obligations under contracts by transferring our services to our customers. Net operating revenues are recognized in the amounts to which we expect to be entitled, which are the transaction prices allocated to the distinct services. Net operating revenues for our Hospital Operations and other and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact with Uninsured Patients (“ Compact ”) and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. Net Patient Service Revenues— We report net patient service revenues at the amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care. These amounts are due from patients, third-party payers (including managed care payers and government programs) and others, and they include variable consideration for retroactive revenue adjustments due to settlement of audits, reviews and investigations. Generally, we bill our patients and third-party payers several days after the services are performed or shortly after discharge. Revenues are recognized as performance obligations are satisfied. We determine performance obligations based on the nature of the services we provide. We recognize revenues for performance obligations satisfied over time based on actual charges incurred in relation to total expected charges. We believe that this method provides a faithful depiction of the transfer of services over the term of performance obligations based on the inputs needed to satisfy the obligations. Generally, performance obligations satisfied over time relate to patients in our hospitals receiving inpatient acute care services. We measure performance obligations from admission to the point when there are no further services required for the patient, which is generally the time of discharge. We recognize revenues for performance obligations satisfied at a point in time, which generally relate to patients receiving outpatient services, when: (1) services are provided; and (2) we do not believe the patient requires additional services. Because our patient service performance obligations relate to contracts with a duration of less than one year, we have elected to apply the optional exemption provided in FASB Accounting Standards Codification (“ASC”) 606-10-50-14(a) and, therefore, we are not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations referred to above are primarily related to inpatient acute care services at the end of the reporting period. The performance obligations for these contracts are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period. We determine the transaction price based on gross charges for services provided, reduced by contractual adjustments provided to third-party payers, discounts provided to uninsured patients in accordance with our Compact , and implicit price concessions provided primarily to uninsured patients. We determine our estimates of contractual adjustments and discounts based on contractual agreements, our discount policies and historical experience. We determine our estimate of implicit price concessions based on our historical collection experience with these classes of patients using a portfolio approach as a practical expedient to account for patient contracts as collective groups rather than individually. The financial statement effects of using this practical expedient are not materially different from an individual contract approach. Gross charges are retail charges. They are not the same as actual pricing, and they generally do not reflect what a hospital is ultimately paid and, therefore, are not displayed in our consolidated statements of operations. Hospitals are typically paid amounts that are negotiated with insurance companies or are set by the government. Gross charges are used to calculate Medicare outlier payments and to determine certain elements of payment under managed care contracts (such as stop-loss payments). Because Medicare requires that a hospital’s gross charges be the same for all patients (regardless of payer category), gross charges are what hospitals charge all patients prior to the application of discounts and allowances. Revenues under the traditional fee-for-service Medicare and Medicaid programs are based primarily on prospective payment systems. Retrospectively determined cost-based revenues under these programs, which were more prevalent in earlier periods, and certain other payments, such as Indirect Medical Education, Direct Graduate Medical Education, disproportionate share hospital and bad debt expense reimbursement, which are based on our hospitals’ cost reports, are estimated using historical trends and current factors. Cost report settlements under these programs are subject to audit by Medicare and Medicaid auditors and administrative and judicial review, and it can take several years until final settlement of such matters is determined and completely resolved. Because the laws, regulations, instructions and rule interpretations governing Medicare and Medicaid reimbursement are complex and change frequently, the estimates we record could change by material amounts. We have a system and estimation process for recording Medicare net patient revenue and estimated cost report settlements. As a result, we record accruals to reflect the expected final settlements on our cost reports. For filed cost reports, we record the accrual based on those cost reports and subsequent activity, and record a valuation allowance against those cost reports based on historical settlement trends. The accrual for periods for which a cost report is yet to be filed is recorded based on estimates of what we expect to report on the filed cost reports, and a corresponding valuation allowance is recorded as previously described. Cost reports generally must be filed within five months after the end of the annual cost reporting period. After the cost report is filed, the accrual and corresponding valuation allowance may need to be adjusted. Settlements with third-party payers for retroactive revenue adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care using the most likely outcome method. These settlements are estimated based on the terms of the payment agreement with the payer, correspondence from the payer and our historical settlement activity, including an assessment to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known (that is, new information becomes available), or as years are settled or are no longer subject to such audits, reviews and investigations. Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per-diem rates, discounted fee-for-service rates and/or other similar contractual arrangements. These revenues are also subject to review and possible audit by the payers, which can take several years before they are completely resolved. The payers are billed for patient services on an individual patient basis. An individual patient’s bill is subject to adjustment on a patient-by-patient basis in the ordinary course of business by the payers following their review and adjudication of each particular bill. We estimate the discounts for contractual allowances at the individual hospital level utilizing billing data on an individual patient basis. At the end of each month, on an individual hospital basis, we estimate our expected reimbursement for patients of managed care plans based on the applicable contract terms. Contractual allowance estimates are periodically reviewed for accuracy by taking into consideration known contract terms, as well as payment history. We believe our estimation and review process enables us to identify instances on a timely basis where such estimates need to be revised. We do not believe there were any adjustments to estimates of patient bills that were material to our revenues. In addition, on a corporate-wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans. Managed care accounts, net of contractual allowances recorded, are further reduced to their net realizable value through implicit price concessions based on historical collection trends for these payers and other factors that affect the estimation process. We know of no claims, disputes or unsettled matters with any payer that would materially affect our revenues for which we have not adequately provided in the accompanying Condensed Consolidated Financial Statements. Generally, patients who are covered by third-party payers are responsible for related co-pays, co-insurance and deductibles, which vary in amount. We also provide services to uninsured patients and offer uninsured patients a discount from standard charges. We estimate the transaction price for patients with co-pays, co-insurance and deductibles and for those who are uninsured based on historical collection experience and current market conditions. Under our Compact and other uninsured discount programs, the discount offered to certain uninsured patients is recognized as a contractual allowance, which reduces net operating revenues at the time the self-pay accounts are recorded. The uninsured patient accounts, net of contractual allowances recorded, are further reduced to their net realizable value at the time they are recorded through implicit price concessions based on historical collection trends for self-pay accounts and other factors that affect the estimation process. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on unemployment rates and the number of uninsured and underinsured patients, the volume of patients through our emergency departments, the increased burden of co-pays, co-insurance amounts and deductibles to be made by patients with insurance, and business practices related to collection efforts. These factors continuously change and can have an impact on collection trends and our estimation process. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments to net patient revenues in the period of the change. We have provided implicit price concessions, primarily to uninsured patients and patients with co-pays, co-insurance and deductibles. The implicit price concessions included in estimating the transaction price represent the difference between amounts billed to patients and the amounts we expect to collect based on our collection history with similar patients. Although outcomes vary, our policy is to attempt to collect amounts due from patients, including co-pays, co-insurance and deductibles due from patients with insurance, at the time of service while complying with all federal and state statutes and regulations, including, but not limited to, the Emergency Medical Treatment and Active Labor Act (“EMTALA”). Generally, as required by EMTALA, patients may not be denied emergency treatment due to inability to pay. Therefore, services, including the legally required medical screening examination and stabilization of the patient, are performed without delaying to obtain insurance information. In non-emergency circumstances or for elective procedures and services, it is our policy to verify insurance prior to a patient being treated; however, there are various exceptions that can occur. Such exceptions can include, for example, instances where (1) we are unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid or Victims of Crime, and it takes several days or weeks before qualification for such benefits is confirmed or denied, and (3) under physician orders we provide services to patients that require immediate treatment. We also provide charity care to patients who are financially unable to pay for the healthcare services they receive. Most patients who qualify for charity care are charged a per-diem amount for services received, subject to a cap. Except for the per-diem amounts, our policy is not to pursue collection of amounts determined to qualify as charity care; therefore, we do not report these amounts in net operating revenues. Patient advocates from Conifer’s Medical Eligibility Program screen patients in the hospital to determine whether those patients meet eligibility requirements for financial assistance programs. They also expedite the process of applying for these government programs. Conifer Revenues— Our Conifer segment recognizes revenue from its contracts when Conifer’s performance obligations are satisfied, which is generally as services are rendered. Revenue is recognized in an amount that reflects the consideration to which Conifer expects to be entitled. At contract inception, Conifer assesses the services specified in its contracts with customers and identifies a performance obligation for each distinct contracted service. Conifer identifies the performance obligations and considers all the services provided under the contract. Conifer generally considers the following distinct services as separate performance obligations: • revenue cycle management services; • value-based care services; • patient communication and engagement services; • consulting services; and • other client-defined projects. Conifer’s contracts generally consist of fixed-price, volume-based or contingency-based fees. Conifer’s long-term contracts typically provide for Conifer to deliver recurring monthly services over a multi-year period. The contracts are typically priced such that Conifer’s monthly fee to its customer represents the value obtained by the customer in the month for those services. Such multi-year service contracts may have upfront fees related to transition or integration work performed by Conifer to set up the delivery for the ongoing services. Such transition or integration work typically does not result in a separately identifiable obligation; thus, the fees and expenses related to such work are deferred and recognized over the life of the related contractual service period. Revenue for fixed-priced contracts is typically recognized at the time of billing unless evidence suggests that the revenue is earned or Conifer’s obligations are fulfilled in a different pattern. Revenue for volume-based contracts is typically recognized as the services are being performed at the contractually billable rate, which is generally a percentage of collections or a percentage of client net patient revenue. Cash and Cash Equivalents We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were approximately $500 million and $611 million at September 30, 2018 and December 31, 2017 , respectively. At September 30, 2018 and December 31, 2017 , our book overdrafts were approximately $235 million and $311 million , respectively, which were classified as accounts payable. At September 30, 2018 and December 31, 2017 , approximately $165 million and $179 million , respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries, and approximately $28 million and $30 million , respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our health plan-related businesses. Also at September 30, 2018 and December 31, 2017 , we had $86 million and $117 million , respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $61 million and $79 million , respectively, were included in accounts payable. During the nine months ended September 30, 2018 and 2017 , we entered into non-cancellable capital leases of approximately $94 million and $82 million , respectively, primarily for equipment. Other Intangible Assets The following tables provide information regarding other intangible assets, which are included in the accompanying Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017 : Gross Accumulated Net Book At September 30, 2018: Capitalized software costs $ 1,680 $ (842 ) $ 838 Trade names 102 — 102 Contracts 865 (72 ) 793 Other 105 (76 ) 29 Total $ 2,752 $ (990 ) $ 1,762 Gross Accumulated Net Book At December 31, 2017: Capitalized software costs $ 1,582 $ (754 ) $ 828 Trade names 102 — 102 Contracts 859 (60 ) 799 Other 106 (69 ) 37 Total $ 2,649 $ (883 ) $ 1,766 Estimated future amortization of intangibles with finite useful lives at September 30, 2018 is as follows: Three Months Years Ending Later Years December 31, Total 2018 2019 2020 2021 2022 Amortization of intangible assets $ 1,090 $ 41 $ 152 $ 127 $ 108 $ 97 $ 565 We recognized amortization expense of $134 million and $125 million in the accompanying Condensed Consolidated Statements of Operations for the nine months ended September 30, 2018 and 2017 , respectively. Investments in Debt and Equity Securities Prior to the adoption of ASU 2016-01 on January 1, 2018, we classified investments in debt and equity securities as either available-for-sale, held-to-maturity or as part of a trading portfolio. At December 31, 2017, we had no significant investments in securities classified as either held-to-maturity or trading. We carried securities classified as available-for-sale at fair value. We reported their unrealized gains and losses, net of taxes, as accumulated other comprehensive income (loss) unless we determined that a loss was other-than-temporary, at which point we would record a loss in our consolidated statements of operations. We included realized gains or losses in our consolidated statements of operations based on the specific identification method. Subsequent to the adoption of ASU 2016-01 on January 1, 2018, we classify investments in debt securities as either available-for-sale, held-to-maturity or as part of a trading portfolio, but these classifications are no longer applicable to equity securities. At September 30, 2018 , we had no significant investments in debt securities classified as either held-to-maturity or trading. We carry debt securities classified as available-for-sale at fair value. We report their unrealized gains and losses, net of taxes, as accumulated other comprehensive income (loss) unless we determine that a loss is other-than-temporary, at which point we would record a loss in our consolidated statements of operations. We carry equity securities at fair value, and we report their unrealized gains and losses in other non-operating expense, net, in our consolidated statements of operations. We include realized gains or losses in our consolidated statements of operations based on the specific identification method. Investments in Unconsolidated Affiliates We control 228 of the facilities within our Ambulatory Care segment and, therefore, consolidate their results. We account for many of the facilities our Ambulatory Care segment operates ( 107 of 335 at September 30, 2018 ), as well as additional facilities in which our Hospital Operations and other segment holds ownership interests, under the equity method as investments in unconsolidated affiliates and report only our share of net income available to the investee as equity in earnings of unconsolidated affiliates in the accompanying Condensed Consolidated Statements of Operations. Summarized financial information for the equity method investees within our Ambulatory Care segment is included in the following table, as well as summarized financial information for the four North Texas hospitals in which we held minority interests that were operated by our Hospital Operations and other segment through the divestiture of these investments effective March 1, 2018. We recorded a gain of approximately $13 million in the nine months ended September 30, 2018 due to the sales of our minority interests in these hospitals. For investments acquired during the reported periods, amounts reflect 100% of the investee’s results beginning on the date of our acquisition of the investment. Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net operating revenues $ 546 $ 635 $ 1,667 $ 1,819 Net income $ 126 $ 143 $ 374 $ 376 Net income available to the investees $ 80 $ 93 $ 240 $ 242 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2018 | |
Accounts Receivable Additional Disclosures [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The principal components of accounts receivable are shown in the table below: September 30, 2018 December 31, 2017 Continuing operations: Patient accounts receivable $ 2,336 $ 3,376 Allowance for doubtful accounts — (898 ) Estimated future recoveries 139 132 Net cost reports and settlements payable and valuation allowances 7 4 2,482 2,614 Discontinued operations 2 2 Accounts receivable $ 2,484 $ 2,616 Accounts that are pursued for collection through Conifer’s business offices are maintained on our hospitals’ books and reflected in patient accounts receivable. For patient accounts receivable resulting from revenue recognized prior to January 1, 2018, an allowance for doubtful accounts was established to reduce the carrying value of such receivables to their estimated net realizable value. Generally, we estimated this allowance based on the aging of our accounts receivable by hospital, our historical collection experience by hospital and for each type of payer, and other relevant factors. At December 31, 2017, our allowance for doubtful accounts was 26.6% of our patient accounts receivable. Under the provisions of ASC 2014-09, which we adopted effective January 1, 2018, when we have an unconditional right to payment, subject only to the passage of time, the right is treated as a receivable. Patient accounts receivable, including billed accounts and unbilled accounts for which we have the unconditional right to payment, and estimated amounts due from third-party payers for retroactive adjustments, are receivables if our right to consideration is unconditional and only the passage of time is required before payment of that consideration is due. For patient accounts receivable subsequent to our adoption of ASU 2014-09 on January 1, 2018, the estimated uncollectable amounts are generally considered implicit price concessions that are a direct reduction to patient accounts receivable rather than allowance for doubtful accounts. We also provide charity care to patients who are unable to pay for the healthcare services they receive. Most patients who qualify for charity care are charged a per-diem amount for services received, subject to a cap. Except for the per-diem amounts, our policy is not to pursue collection of amounts determined to qualify as charity care; therefore, we do not report these amounts in net operating revenues. Most states include an estimate of the cost of charity care in the determination of a hospital’s eligibility for Medicaid disproportionate share hospital (“DSH”) payments. These payments are intended to mitigate our cost of uncompensated care, as well as reduced Medicaid funding levels. The following table shows our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses and which exclude the costs of our health plan businesses) of caring for our self-pay patients and charity care patients, as well as revenues attributable to Medicaid DSH and other supplemental revenues we recognized in the three and nine months ended September 30, 2018 and 2017 : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Estimated costs for: Self-pay patients $ 172 $ 164 $ 477 $ 484 Charity care patients 28 29 91 92 Total $ 200 $ 193 $ 568 $ 576 Medicaid DSH and other supplemental revenues $ 233 $ 140 $ 651 $ 462 At September 30, 2018 , we had approximately $147 million and $318 million of receivables recorded in other current assets and investments and other assets, respectively, and approximately $61 million and $68 million of payables recorded in other current liabilities and other long-term liabilities, respectively, in the accompanying Condensed Consolidated Balance Sheet related to California’s provider fee program. At December 31, 2017 , we had approximately $312 million and $266 million of receivables recorded in other current assets and investments and other assets, respectively, and approximately $159 million and $49 million |
CONTRACT BALANCES
CONTRACT BALANCES | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT BALANCES | CONTRACT BALANCES Hospital Operations and Other Segment Under the provisions of ASU 2014-09, which we adopted effective January 1, 2018, amounts related to services provided to patients for which we have not billed and that do not meet the conditions of unconditional right to payment at the end of the reporting period are contract assets. For our Hospital Operations and other segment, our contract assets consist primarily of services that we have provided to patients who are still receiving inpatient care in our facilities at the end of the reporting period. Our Hospital Operations and other segment’s contract assets are included in other current assets on the accompanying Condensed Consolidated Balance Sheet at September 30, 2018. The opening and closing balances of contract assets for our Hospital Operations and other segment are as follows: 2018 2017 January 1, $ 171 $ — September 30, 152 — Increase/(decrease) $ (19 ) $ — The increase in the contract asset balances from the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 is due to the implementation of ASU 2014-09 effective January 1, 2018 using a modified retrospective method of application. Prior to January 1, 2018, amounts related to services provided to patients for which we had not billed were included in accounts receivable, less allowance for doubtful accounts, on our consolidated balance sheets. Approximately 89% of our Hospital Operations and other segment’s contract assets meet the conditions for unconditional right to payment and are reclassified to patient receivables within 90 days. Conifer Segment Conifer enters into contracts with customers to sell revenue cycle management and other services, such as value-based care, consulting and project services. The payment terms and conditions in our customer contracts vary. In some cases, customers are invoiced in advance and (for other than fixed-price fee arrangements) a true-up to actual fee is included on a subsequent invoice. In other cases, payment is due in arrears. In addition, some contracts contain performance incentives, penalties and other forms of variable consideration. When the timing of Conifer’s delivery of services is different from the timing of payments made by the customers, Conifer recognizes either unbilled revenue (performance precedes contractual right to invoice the customer) or deferred revenue (customer payment precedes Conifer service performance). In the following table, customers that prepay prior to obtaining control/benefit of the service are represented by deferred contract revenue until the performance obligations are satisfied. Unbilled revenue represents arrangements in which Conifer has provided services to and the customer has obtained control/benefit of services prior to the contractual invoice date. Contracts with payment in arrears are recognized as receivables in the month the service is performed. The opening and closing balances of Conifer’s receivables, contract asset, and current and long-term contract liabilities are as follows: Contract Liability- Contract Liability- Contract Asset- Current Long-Term Receivables Unbilled Revenue Deferred Revenue Deferred Revenue January 1, 2018 $ 89 $ 10 $ 80 $ 21 September 30, 2018 89 11 74 21 Increase/(decrease) $ — $ 1 $ (6 ) $ — January 1, 2017 $ 67 $ 8 $ 76 $ 26 September 30, 2017 102 6 79 22 Increase/(decrease) $ 35 $ (2 ) $ 3 $ (4 ) The difference between the opening and closing balances of Conifer’s contract assets and contract liabilities are primarily related to prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are typically not distinct and are, therefore, recognized over the performance obligation period to which they relate. Our Conifer segment’s receivables and contract assets are reported as part of other current assets in our accompanying Condensed Consolidated Balance Sheets, and our Conifer segment’s current and long-term contract liabilities are reported as part of other current liabilities and other long-term liabilities, respectively, in our accompanying Condensed Consolidated Balance Sheets. The amount of revenue Conifer recognized in the nine months ended September 30, 2018 and 2017 that was included in the opening current deferred revenue liability was $68 million and $72 million , respectively. This revenue consists primarily of prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are recognized over the services period. Contract Costs We have elected to apply the practical expedient provided by FASB ASC 340-40-25-4 and expense as incurred the incremental customer contract acquisition costs for contracts in which the amortization period of the asset that we otherwise would have recognized is one year or less. However, incremental costs incurred to obtain and fulfill customer contracts for which the amortization period of the asset that we otherwise would have recognized is longer than one year, which consist primarily of Conifer deferred contract setup costs, are capitalized and amortized on a straight-line basis over the lesser of their estimated useful lives or the term of the related contract. We recognized amortization expense of $3 million in both of the three month periods ended September 30, 2018 and 2017 . During the nine months ended September 30, 2018 and 2017 , we recognized amortization expense of $9 million and $7 million , respectively. At September 30, 2018 and December 31, 2017, the unamortized customer contract costs were $31 million and $35 million Net operating revenues for our Hospital Operations and other and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. The table below shows our sources of net operating revenues less provision for doubtful accounts and implicit price concessions from continuing operations: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Hospital Operations and other: Net patient service revenues from hospitals and related Medicare $ 681 $ 773 $ 2,164 $ 2,455 Medicaid 336 252 971 806 Managed care 2,228 2,327 6,869 7,211 Self-pay 33 9 78 40 Indemnity and other 156 161 438 457 Total 3,434 3,522 10,520 10,969 Physician practices revenues 280 270 825 810 Health plans 8 10 14 100 Revenue from other sources 40 64 83 187 Hospital Operations and other total prior to 3,762 3,866 11,442 12,066 Ambulatory Care 502 468 1,531 1,395 Conifer 371 401 1,161 1,203 Inter-segment eliminations (146 ) (149 ) (440 ) (463 ) Net operating revenues $ 4,489 $ 4,586 $ 13,694 $ 14,201 Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the nine months ended September 30, 2018 and 2017 by $11 million and $36 million , respectively. Estimated cost report settlements and valuation allowances are included in accounts receivable in the accompanying Condensed Consolidated Balance Sheets (see Note 2). We believe that we have made adequate provision for any adjustments that may result from final determination of amounts earned under all the above arrangements with Medicare and Medicaid. The table below shows the composition of net operating revenues less provision for doubtful accounts and implicit price concessions for our Ambulatory Care segment: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net patient service revenues $ 471 $ 434 $ 1,440 $ 1,305 Management fees 22 23 68 67 Revenue from other sources 9 11 23 23 Net operating revenues $ 502 $ 468 $ 1,531 $ 1,395 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenue cycle services – Tenet $ 141 $ 142 $ 424 $ 434 Revenue cycle services – other customers 203 229 655 674 Other services – Tenet 5 7 16 29 Other services – other customers 22 23 66 66 Net operating revenues $ 371 $ 401 $ 1,161 $ 1,203 Other services represent approximately 7% of Conifer’s revenue and include services such as value-based care, consulting and project services. Performance Obligations The following table includes Conifer’s revenue that is expected to be recognized in the future related to performance obligations that are unsatisfied, or partially unsatisfied, at the end of the reporting period. The amounts in the table primaril y consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume or contingency based contracts, performance incentives, penalties or other variable consideration that is considered constrained. Conifer’s contract with Catholic Health Initiatives (“CHI”), a minority interest owner of Conifer Health Solutions, LLC, represents the majority of the fixed fee revenue related to remaining performance obligations. Conifer’s contract term with CHI ends in 2032. Three Months Years Ending Later Years December 31, Total 2018 2019 2020 2021 2022 Performance obligations $ 8,032 $ 161 $ 653 $ 653 $ 604 $ 578 $ 5,383 |
ASSETS AND LIABILITIES HELD FOR
ASSETS AND LIABILITIES HELD FOR SALE | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operation, Additional Disclosures [Abstract] | |
ASSETS AND LIABILITIES HELD FOR SALE | ASSETS AND LIABILITIES HELD FOR SALE In the three months ended December 31, 2017, three of our hospitals in the Chicago-area, as well as other operations affiliated with the hospitals, met the criteria to be classified as held for sale. As a result, we have classified these assets totaling $117 million as “assets held for sale” in current assets and the related liabilities of $55 million as “liabilities held for sale” in current liabilities on the accompanying Condensed Consolidated Balance Sheet at September 30, 2018 . These assets and liabilities, which are in our Hospital Operations and other segment, were recorded at the lower of their carrying amount or their fair value less estimated costs to sell. We recorded impairment charges of $17 million and $73 million in the three months ended March 31, 2018 and December 31, 2017, respectively, for the write-down of the assets held for sale to their estimated fair value, less estimated costs to sell, as a result of the planned divestiture of these assets. On July 18, 2018, we announced the signing of a definitive agreement for the sale of these hospitals and hospital-affiliated operations. In addition, certain assets and the related liabilities of our health plan in California were classified as held for sale in the three months ended December 31, 2017. We have classified $11 million of assets as “assets held for sale” in current assets and the related liabilities of $16 million as “liabilities held for sale” in current liabilities on the accompanying Condensed Consolidated Balance Sheet at September 30, 2018 related to this health plan. These assets and liabilities, which are in our Hospital Operations and other segment, were recorded at the lower of their carrying amount or their fair value less estimated costs to sell. There was no impairment recorded for a write-down of assets held for sale to their estimated fair value, less estimated costs to sell, as a result of the planned divestiture of this health plan. Assets and liabilities classified as held for sale at September 30, 2018 were comprised of the following: Accounts receivable $ 56 Other current assets 18 Investments and other long-term assets 2 Property and equipment 45 Goodwill 7 Current liabilities (64 ) Long-term liabilities (7 ) Net assets held for sale $ 57 In the three months ended September 30, 2018, we completed the sale of our nine Aspen facilities in the United Kingdom for net pre-tax cash proceeds of approximately $15 million ; these assets met the criteria to be classified as held for sale in the three months ended September 30, 2017. We recorded impairment charges related to this planned divestiture in each of the three month periods ended September 30, 2018, June 30, 2018 and September 30, 2017 of $5 million , $4 million and $59 million , respectively, for the write-down of assets held for sale to their estimated fair value, less estimated costs to sell. In the three months ended June 30, 2018, we completed the sale of our hospital, physician practices and other hospital-affiliated operations in St. Louis, Missouri; these assets met the criteria to be classified as held for sale in the three months ended December 31, 2017. As a result of this transaction, we recorded a gain on sale of approximately $12 million and received net pre-tax cash proceeds of $54 million in the three months ended June 30, 2018. In the three months ended March 31, 2018, we completed the sale of MacNeal Hospital, which is located in a suburb of Chicago, and other operations affiliated with the hospital; these assets met the criteria to be classified as held for sale in the three months ended September 30, 2017. As a result of this transaction, we recorded a gain on sale of $88 million and received net pre-tax cash proceeds of $249 million in the nine months ended September 30, 2018 . The real estate related to Abrazo Maryvale Hospital in Arizona, which we closed in December 2017, was divested in the three months ended March 31, 2018, resulting in net pre-tax proceeds of $7 million . The real estate was classified as held for sale in the three months ended December 31, 2017. In the three months ended September 30, 2017, we entered into a definitive agreement for the sale of our hospitals, physician practices and related assets in Philadelphia, Pennsylvania and the surrounding area. At that time, we recorded impairment charges of $235 million for the write-down of assets held for sale to their estimated fair value, less estimated costs to sell, as a result of this anticipated transaction. This transaction closed in January 2018, resulting in net pre-tax proceeds of $152.5 million in cash and a secured promissory note for $17.5 million in the nine months ended September 30, 2018 . The following table provides information on significant components of our business that have been disposed of since June 30, 2017 or are classified as held for sale at September 30, 2018 : Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Significant disposals: Income (loss) from continuing operations, before income taxes Houston (includes an $111 million gain on sale $ — $ 108 $ — $ 136 Philadelphia (includes $235 million of impairment charges 1 (233 ) (10 ) (245 ) MacNeal (includes an $88 million gain on sale (7 ) 5 90 23 Aspen (includes $59 million of impairment charges (6 ) (63 ) (6 ) (69 ) Total $ (12 ) $ (183 ) $ 74 $ (155 ) Significant planned divestitures classified as held for sale: Income (loss) from continuing operations, before income taxes Chicago-area (includes $17 million of impairment charges $ (10 ) $ (2 ) $ (25 ) $ (5 ) Total $ (10 ) $ (2 ) $ (25 ) $ (5 ) |
IMPAIRMENT AND RESTRUCTURING CH
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS During the nine months ended September 30, 2018 , we recorded impairment and restructuring charges and acquisition-related costs of $123 million , consisting of $29 million of impairment charges , $82 million of restructuring charges and $12 million of acquisition-related costs . Impairment charges consisted primarily of $17 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for certain of our Chicago-area facilities , $9 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for Aspen and $3 million of other impairment charges. Restructuring charges consisted of $47 million of employee severance costs , $10 million of contract and lease termination fees , and $25 million of other restructuring costs . Acquisition-related costs consisted of $8 million of transaction costs and $4 million of acquisition integration charges . Our impairment and restructuring charges and acquisition-related costs for the nine months ended September 30, 2018 were comprised of $81 million from our Hospital Operations and other segment, $20 million from our Ambulatory Care segment and $22 million from our Conifer segment. During the nine months ended September 30, 2017 , we recorded impairment and restructuring charges and acquisition-related costs of $403 million , consisting of $326 million of impairment charges , $61 million of restructuring charges and $16 million of acquisition-related costs . Impairment charges consisted primarily of approximately $294 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for our Aspen and Philadelphia-area facilities , $29 million of impairment of two equity method investments and $3 million to write-down intangible assets . Restructuring charges consisted of $40 million of employee severance costs , $8 million of contract and lease termination fees , and $13 million of other restructuring costs . Acquisition-related costs consisted of $5 million of transaction costs and $11 million of acquisition integration charges . Our impairment and restructuring charges and acquisition-related costs for the nine months ended September 30, 2017 were comprised of $319 million from our Hospital Operations and other segment, $70 million from our Ambulatory Care segment and $14 million from our Conifer segment. Our impairment tests presume stable, improving or, in some cases, declining operating results in our facilities, which are based on programs and initiatives being implemented that are designed to achieve the facility’s most recent projections. If these projections are not met, or if negative trends occur or continue that impact our future outlook, impairments of long-lived assets and goodwill may occur, and we may incur additional impairment or restructuring charges, which could be material. At September 30, 2018 , our continuing operations consisted of three reportable segments, Hospital Operations and other, Ambulatory Care and Conifer. Our segments are reporting units used to perform our goodwill impairment analysis. |
LONG-TERM DEBT AND LEASE OBLIGA
LONG-TERM DEBT AND LEASE OBLIGATIONS | 9 Months Ended |
Sep. 30, 2018 | |
Long-term Debt and Capital Lease Obligations [Abstract] | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | LONG-TERM DEBT AND LEASE OBLIGATIONS The table below shows our long-term debt at September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Senior unsecured notes: 5.500% due 2019 $ 500 $ 500 6.750% due 2020 300 300 8.125% due 2022 2,800 2,800 6.750% due 2023 1,872 1,900 7.000% due 2025 478 500 6.875% due 2031 362 430 Senior secured first lien notes: 4.750% due 2020 500 500 6.000% due 2020 1,800 1,800 4.500% due 2021 850 850 4.375% due 2021 1,050 1,050 4.625% due 2024 1,870 1,870 Senior secured second lien notes: 7.500% due 2022 750 750 5.125% due 2025 1,410 1,410 Capital leases 424 431 Mortgage notes 78 77 Unamortized issue costs, note discounts and premiums (194 ) (231 ) Total long-term debt 14,850 14,937 Less current portion 672 146 Long-term debt, net of current portion $ 14,178 $ 14,791 Senior Secured and Senior Unsecured Notes In August 2018, we purchased approximately $38 million aggregate principal amount of our 6.875% senior unsecured notes due 2031 for approximately $36 million , including approximately $1 million in accrued and unpaid interest through the dates of purchase. In May 2018, we purchased approximately $30 million aggregate principal amount of our 6.875% senior unsecured notes due 2031 for approximately $28 million . In connection with the purchase, we recorded a loss from early extinguishment of debt of approximately $1 million in the three months ended June 30, 2018, primarily related to the write-off of associated unamortized note discount and issuance costs, partially offset by the difference between the purchase price and the par value of the notes. In March 2018, we purchased approximately $28 million aggregate principal amount of our 6.750% senior unsecured notes due 2023 and approximately $22 million aggregate principal amount of our 7.000% senior unsecured notes due 2025 for approximately $51 million , including approximately $1 million in accrued and unpaid interest through the dates of purchase. In connection with the purchase, we recorded a loss from early extinguishment of debt of approximately $1 million in the three months ended March 31, 2018, primarily related to the write-off of associated unamortized issuance costs. Credit Agreement We have a senior secured revolving credit facility (as amended, the “Credit Agreement”) that provides, subject to borrowing availability, for revolving loans in an aggregate principal amount of up to $1 billion , with a $300 million subfacility for standby letters of credit. Obligations under the Credit Agreement, which has a scheduled maturity date of December 4, 2020, are guaranteed by substantially all of our domestic wholly owned hospital subsidiaries and are secured by a first-priority lien on the accounts receivable owned by us and the subsidiary guarantors. Outstanding revolving loans accrue interest at a base rate plus a margin ranging from 0.25% to 0.75% per annum or the London Interbank Offered Rate plus a margin ranging from 1.25% to 1.75% per annum, in each case based on available credit. An unused commitment fee payable on the undrawn portion of the revolving loans ranges from 0.25% to 0.375% per annum based on available credit. Our borrowing availability is based on a specified percentage of eligible accounts receivable, including self-pay accounts. At September 30, 2018 , we had no cash borrowings outstanding under the Credit Agreement, and we had approximately $2 million of standby letters of credit outstanding. Based on our eligible receivables, approximately $998 million was available for borrowing under the Credit Agreement at September 30, 2018 . Letter of Credit Facility We have a letter of credit facility (as amended, the “LC Facility”) that provides for the issuance of standby and documentary letters of credit, from time to time, in an aggregate principal amount of up to $180 million (subject to increase to up to $200 million ). The maturity date of the LC Facility is March 7, 2021. Obligations under the LC Facility are guaranteed and secured by a first-priority pledge of the capital stock and other ownership interests of certain of our wholly owned domestic hospital subsidiaries on an equal ranking basis with our senior secured first lien notes. Drawings under any letter of credit issued under the LC Facility that we have not reimbursed within three business days after notice thereof will accrue interest at a base rate plus a margin equal to 0.50% per annum. An unused commitment fee is payable at an initial rate of 0.25% per annum with a step up to 0.375% per annum should our secured-debt-to-EBITDA ratio equal or exceed 3.00 to 1.00 at the end of any fiscal quarter. A fee on the aggregate outstanding amount of issued but undrawn letters of credit will accrue at a rate of 1.50% per annum. An issuance fee equal to 0.125% per annum of the aggregate face amount of each outstanding letter of credit is payable to the account of the issuer of the related letter of credit. At September 30, 2018 , we had approximately $96 million of standby letters of credit outstanding under the LC Facility. |
GUARANTEES
GUARANTEES | 9 Months Ended |
Sep. 30, 2018 | |
Guarantees [Abstract] | |
GUARANTEES | GUARANTEES At September 30, 2018 , the maximum potential amount of future payments under our income guarantees to certain physicians who agree to relocate and revenue collection guarantees to hospital-based physician groups providing certain services at our hospitals was $186 million . We had a total liability of $138 million recorded for these guarantees included in other current liabilities at September 30, 2018 . At September 30, 2018 , we also had issued guarantees of the indebtedness and other obligations of our investees to third parties, the maximum potential amount of future payments under which was approximately $27 million . Of the total, $18 million relates to the obligations of consolidated subsidiaries, which obligations are recorded in the accompanying Condensed Consolidated Balance Sheet at September 30, 2018 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS In recent years, we have granted both options and restricted stock units to certain of our employees. Options have an exercise price equal to the fair market value of the shares on the date of grant and generally expire 10 years from the date of grant. A restricted stock unit is a contractual right to receive one share of our common stock or the equivalent value in cash in the future. Typically, options and time-based restricted stock units vest one-third on each of the first three anniversary dates of the grant; however, certain special retention awards may have different vesting terms. In addition, we grant performance-based options and performance-based restricted stock units that vest subject to the achievement of specified performance goals within a specified time frame. At September 30, 2018 , assuming outstanding performance-based restricted stock units and options for which performance has not yet been determined will achieve target performance, approximately 5.2 million shares of common stock were available under our 2008 Stock Incentive Plan for future stock option grants and other equity incentive awards, including restricted stock units (approximately 4.1 million shares remain available if we assume maximum performance for outstanding performance-based restricted stock units and options for which performance has not yet been determined). Our Condensed Consolidated Statements of Operations for the nine months ended September 30, 2018 and 2017 include $34 million and $44 million , respectively, of pre-tax compensation costs related to our stock-based compensation arrangements. Stock Options The following table summarizes stock option activity during the nine months ended September 30, 2018 : Options Weighted Average Aggregate Weighted Average (In Millions) Outstanding at December 31, 2017 2,564,822 $ 20.35 Granted 635,196 21.33 Exercised (612,074 ) 18.36 Forfeited/Expired (299,581 ) 36.21 Outstanding at September 30, 2018 2,288,363 $ 19.08 $ 22 7.0 years Vested and expected to vest at September 30, 2018 2,288,363 $ 19.08 $ 22 7.0 years Exercisable at September 30, 2018 774,812 $ 17.34 $ 9 3.4 years There were 612,074 and 16,525 stock options exercised during the nine months ended September 30, 2018 and 2017 , respectively, with aggregate intrinsic values of approximately $4 million and less than $1 million , respectively. At September 30, 2018 , there were $7 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 2.1 years. In the three months ended June 30, 2018, we granted an aggregate of 31,184 performance-based stock options under our 2008 Stock Incentive Plan to new senior officers. The options will all vest on the third anniversary of the grant date, subject to achieving a closing stock price of at least $44.29 (a 25% premium above the May 31, 2018 grant-date closing stock price of $35.43 ) for at least 20 consecutive trading days within three years of the grant date, and will expire on the tenth anniversary of the grant date. In the three months ended March 31, 2018, we granted an aggregate of 604,012 performance-based stock options under our 2008 Stock Incentive Plan to certain of our senior officers. The stock options will all vest on the third anniversary of the grant date because, in the three months ended June 30, 2018, the requirement that our stock close at a price of at least $25.75 (a 25% premium above the February 28, 2018 grant-date closing stock price of $20.60 ) for at least 20 consecutive trading days within three years of the grant date was met; these options will expire on the tenth anniversary of the grant date. In the three months ended September 30, 2017, we granted 408,526 performance-based stock options under our 2008 Stock Incentive Plan to our executive chairman. The stock options all vested on the first anniversary of the grant date because, in the three months ended June 30, 2018, the requirement that our stock close at a price of at least $20.53 (a 25% premium above the September 29, 2017 grant-date closing stock price of $16.43 ) for at least 30 consecutive trading days within four years of the grant date was met; these options will expire on the fifth anniversary of the grant date. In the three months ended March 31, 2017, we granted an aggregate of 987,781 performance-based stock options under our 2008 Stock Incentive Plan to certain of our senior officers. The stock options will all vest on the third anniversary of the grant date because, in the three months ended June 30, 2018, the requirement that our stock close at a price of at least $23.74 (a 25% premium above the March 1, 2017 grant-date closing stock price of $18.99 ) for at least 20 consecutive trading days within three years of the grant date was met; these options will expire on the tenth anniversary of the grant date. The weighted average estimated fair value of stock options we granted in the nine months ended September 30, 2018 and 2017 was $9.16 and $7.68 per share, respectively. These fair values were calculated based on each grant date, using a Monte Carlo simulation with the following assumptions: Nine Months Ended September 30, Three Months Ended September 30, Three Months Ended 2018 2017 Expected volatility 46% 46% 49% Expected dividend yield 0% 0% 0% Expected life 6.2 years 3.0 years 6.2 years Expected forfeiture rate 0% 0% 0% Risk-free interest rate 2.72% 1.92% 2.15% The expected volatility used for the 2018 Monte Carlo simulation incorporates historical volatility based on an analysis of historical prices of our stock. The expected volatility reflects the historical volatility for a duration consistent with the contractual life of the options; it does not consider the implied volatility from open-market exchanged options due to the limited trading activity and the transient nature of factors impacting our stock price volatility. The expected volatility used for the Monte Carlo simulation for the options granted in the three months ended September 30, 2017 incorporated historical volatility based on an analysis of historical prices of our stock. The expected volatility used for the Monte Carlo simulation for the options granted in the three months ended March 31, 2017 incorporated historical and implied share-price volatility and was based on an analysis of historical prices of our stock and open-market exchanged options. In each case, the expected volatility reflected the historical volatility for a duration consistent with the contractual life of the options. The historical share-price volatility for 2018 excludes the movements in our stock price for the period from August 15, 2017 through November 30, 2017 due to the departure of certain board members and officers, as well as reports that we were exploring a potential sale of the company. The historical share-price volatility for 2017 excludes the movements in our stock price on two dates (April 8, 2011 and April 11, 2011) with unusual volatility due to an unsolicited acquisition proposal. The expected life of options granted is derived from Tenet’s historical stock option exercise behavior, adjusted for the exercisable period (i.e., from the third anniversary through the tenth anniversary of the grant date). The risk-free interest rates are based on zero-coupon United States Treasury yields in effect at the date of grant consistent with the expected exercise time frames. The following table summarizes information about our outstanding stock options at September 30, 2018 : Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted Average Weighted Average Number of Weighted Average $0.00 to $4.569 90,184 0.4 years $ 4.56 90,184 $ 4.56 $4.57 to $19.759 1,292,315 7.0 years 18.18 413,960 16.46 $19.76 to $35.430 905,864 7.7 years 21.81 270,668 22.94 2,288,363 7.0 years $ 19.08 774,812 $ 17.34 Restricted Stock Units The following table summarizes restricted stock unit activity during the nine months ended September 30, 2018 : Restricted Stock Weighted Average Grant Unvested at December 31, 2017 2,253,988 $ 35.20 Granted 734,091 24.70 Vested (872,062 ) 34.03 Forfeited (128,074 ) 36.24 Unvested at September 30, 2018 1,987,943 $ 31.77 In the nine months ended September 30, 2018 , we granted 734,091 restricted stock units, of which 288,325 will vest and be settled ratably over a three -year period from the grant date, 339,806 will vest and be settled ratably over a two -year period from the grant date, and 29,870 will vest and be settled on the third anniversary of the grant date. In addition, in May 2018, we made an annual grant of 54,198 restricted stock units to our non-employee directors for the 2018-2019 board service year, which units vested immediately and will settle in shares of our common stock on the third anniversary of the date of the grant. Because the board of directors appointed two new members in May 2018, we made initial grants totaling 3,670 restricted stock units to these directors, as well as prorated annual grants totaling 12,154 restricted stock units. Both the initial grants and the annual grants vested immediately, however the initial grants will not settle until the directors’ separation from the Board, while the annual grants settle on the third anniversary of the grant date. In addition, we granted 6,068 performance-based restricted stock units to certain of our senior officers; the vesting of these restricted stock units is contingent on our achievement of specified performance goals for the years 2018 to 2020. Provided the goals are achieved, the performance-based restricted stock units will vest and settle on the third anniversary of the grant date. The actual number of performance-based restricted stock units that could vest will range from 0% to 200% of the 6,068 units granted, depending on our level of achievement with respect to the performance goals. At September 30, 2018 , there were $22 million of total unrecognized compensation costs related to restricted stock units. These costs are expected to be recognized over a weighted average period of 1.6 years. Employee Retirement Plans In the nine months ended September 30, 2018 and 2017 , we recognized (i) service cost related to one of our frozen nonqualified defined benefit pension plans of approximately $2 million and $1 million , respectively, in salaries, wages and benefits expense, and (ii) other components of net periodic pension cost and net periodic postretirement benefit cost related to our frozen qualified and nonqualified defined benefit plans of approximately $12 million and $20 million |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Changes in Shareholders’ Equity The following tables show the changes in consolidated equity during the nine months ended September 30, 2018 and 2017 (dollars in millions, share amounts in thousands): Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2017 100,972 $ 7 $ 4,859 $ (204 ) $ (2,390 ) $ (2,419 ) $ 686 $ 539 Net income — — — — 99 — 31 130 Distributions paid to noncontrolling interests — — — — — — (34 ) (34 ) Other comprehensive income — — — 8 — — — 8 Accretion of redeemable noncontrolling interests — — (37 ) — — — — (37 ) Purchases (sales) of businesses and noncontrolling interests — — (4 ) — — — (2 ) (6 ) Cumulative effect of accounting change — — — (43 ) 43 — — — Stock-based compensation expense, tax benefit and issuance of common stock 1,017 — 15 — — 1 — 16 Balances at March 31, 2018 101,989 $ 7 $ 4,833 $ (239 ) $ (2,248 ) $ (2,418 ) $ 681 $ 616 Net income — — — — 26 — 42 68 Distributions paid to noncontrolling interests — — — — — — (38 ) (38 ) Other comprehensive loss — — — (4 ) — — — (4 ) Accretion of redeemable noncontrolling interests — — (123 ) — — — — (123 ) Purchases (sales) of businesses and noncontrolling interests — — (2 ) — — — 45 43 Stock-based compensation expense, tax benefit and issuance of common stock 312 — 14 — — — — 14 Balances at June 30, 2018 102,301 $ 7 $ 4,722 $ (243 ) $ (2,222 ) $ (2,418 ) $ 730 $ 576 Net income — — — — (9 ) — 40 31 Distributions paid to noncontrolling interests — — — — — — (40 ) (40 ) Other comprehensive income — — — 41 — — — 41 Accretion of redeemable noncontrolling interests — — (6 ) — — — — (6 ) Purchases (sales) of businesses and noncontrolling interests — — 3 — — — 36 39 Stock-based compensation expense, tax benefit and issuance of common stock 146 — 14 — — 3 — 17 Balances at September 30, 2018 102,447 $ 7 $ 4,733 $ (202 ) $ (2,231 ) $ (2,415 ) $ 766 $ 658 Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2016 99,686 $ 7 $ 4,827 $ (258 ) $ (1,742 ) $ (2,417 ) $ 665 $ 1,082 Net income (loss) — — — — (53 ) — 36 (17 ) Distributions paid to noncontrolling interests — — — — — — (36 ) (36 ) Other comprehensive income — — — 3 — — — 3 Purchases (sales) of businesses and noncontrolling interests — — 4 — — — (1 ) 3 Cumulative effect of accounting change — — — — 56 — — 56 Stock-based compensation expense and issuance of common stock 735 — 3 — — — — 3 Balances at March 31, 2017 100,421 $ 7 $ 4,834 $ (255 ) $ (1,739 ) $ (2,417 ) $ 664 $ 1,094 Net income (loss) — — — — (55 ) — 35 (20 ) Distributions paid to noncontrolling interests — — — — — — (29 ) (29 ) Other comprehensive income — — — 13 — — — 13 Accretion of redeemable noncontrolling interests — — (29 ) — — — — (29 ) Purchases (sales) of businesses and noncontrolling interests — — (8 ) — — — 12 4 Stock-based compensation expense and issuance of common stock 289 — 22 — — — — 22 Balances at June 30, 2017 100,710 $ 7 $ 4,819 $ (242 ) $ (1,794 ) $ (2,417 ) $ 682 $ 1,055 Net income (loss) — — — — (367 ) — 28 (339 ) Distributions paid to noncontrolling interests — — — — — — (28 ) (28 ) Other comprehensive income — — — 4 — — — 4 Accretion of redeemable noncontrolling interests — — (3 ) — — — — (3 ) Purchases (sales) of businesses and noncontrolling interests — — — — — — (11 ) (11 ) Stock-based compensation expense and issuance of common stock 121 — 19 — — (2 ) — 17 Balances at September 30, 2017 100,831 $ 7 $ 4,835 $ (238 ) $ (2,161 ) $ (2,419 ) $ 671 $ 695 Our noncontrolling interests balances at September 30, 2018 and December 31, 2017 were comprised of $67 million and $64 million , respectively, from our Hospital Operations and other segment, and $699 million and $622 million , respectively, from our Ambulatory Care segment. Our net income available to noncontrolling interests for the nine months ended September 30, 2018 and 2017 in the table above were comprised of $6 million and $9 million , respectively, from our Hospital Operations and other segment, and $107 million and $90 million |
NET OPERATING REVENUES
NET OPERATING REVENUES | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
NET OPERATING REVENUES | CONTRACT BALANCES Hospital Operations and Other Segment Under the provisions of ASU 2014-09, which we adopted effective January 1, 2018, amounts related to services provided to patients for which we have not billed and that do not meet the conditions of unconditional right to payment at the end of the reporting period are contract assets. For our Hospital Operations and other segment, our contract assets consist primarily of services that we have provided to patients who are still receiving inpatient care in our facilities at the end of the reporting period. Our Hospital Operations and other segment’s contract assets are included in other current assets on the accompanying Condensed Consolidated Balance Sheet at September 30, 2018. The opening and closing balances of contract assets for our Hospital Operations and other segment are as follows: 2018 2017 January 1, $ 171 $ — September 30, 152 — Increase/(decrease) $ (19 ) $ — The increase in the contract asset balances from the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 is due to the implementation of ASU 2014-09 effective January 1, 2018 using a modified retrospective method of application. Prior to January 1, 2018, amounts related to services provided to patients for which we had not billed were included in accounts receivable, less allowance for doubtful accounts, on our consolidated balance sheets. Approximately 89% of our Hospital Operations and other segment’s contract assets meet the conditions for unconditional right to payment and are reclassified to patient receivables within 90 days. Conifer Segment Conifer enters into contracts with customers to sell revenue cycle management and other services, such as value-based care, consulting and project services. The payment terms and conditions in our customer contracts vary. In some cases, customers are invoiced in advance and (for other than fixed-price fee arrangements) a true-up to actual fee is included on a subsequent invoice. In other cases, payment is due in arrears. In addition, some contracts contain performance incentives, penalties and other forms of variable consideration. When the timing of Conifer’s delivery of services is different from the timing of payments made by the customers, Conifer recognizes either unbilled revenue (performance precedes contractual right to invoice the customer) or deferred revenue (customer payment precedes Conifer service performance). In the following table, customers that prepay prior to obtaining control/benefit of the service are represented by deferred contract revenue until the performance obligations are satisfied. Unbilled revenue represents arrangements in which Conifer has provided services to and the customer has obtained control/benefit of services prior to the contractual invoice date. Contracts with payment in arrears are recognized as receivables in the month the service is performed. The opening and closing balances of Conifer’s receivables, contract asset, and current and long-term contract liabilities are as follows: Contract Liability- Contract Liability- Contract Asset- Current Long-Term Receivables Unbilled Revenue Deferred Revenue Deferred Revenue January 1, 2018 $ 89 $ 10 $ 80 $ 21 September 30, 2018 89 11 74 21 Increase/(decrease) $ — $ 1 $ (6 ) $ — January 1, 2017 $ 67 $ 8 $ 76 $ 26 September 30, 2017 102 6 79 22 Increase/(decrease) $ 35 $ (2 ) $ 3 $ (4 ) The difference between the opening and closing balances of Conifer’s contract assets and contract liabilities are primarily related to prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are typically not distinct and are, therefore, recognized over the performance obligation period to which they relate. Our Conifer segment’s receivables and contract assets are reported as part of other current assets in our accompanying Condensed Consolidated Balance Sheets, and our Conifer segment’s current and long-term contract liabilities are reported as part of other current liabilities and other long-term liabilities, respectively, in our accompanying Condensed Consolidated Balance Sheets. The amount of revenue Conifer recognized in the nine months ended September 30, 2018 and 2017 that was included in the opening current deferred revenue liability was $68 million and $72 million , respectively. This revenue consists primarily of prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are recognized over the services period. Contract Costs We have elected to apply the practical expedient provided by FASB ASC 340-40-25-4 and expense as incurred the incremental customer contract acquisition costs for contracts in which the amortization period of the asset that we otherwise would have recognized is one year or less. However, incremental costs incurred to obtain and fulfill customer contracts for which the amortization period of the asset that we otherwise would have recognized is longer than one year, which consist primarily of Conifer deferred contract setup costs, are capitalized and amortized on a straight-line basis over the lesser of their estimated useful lives or the term of the related contract. We recognized amortization expense of $3 million in both of the three month periods ended September 30, 2018 and 2017 . During the nine months ended September 30, 2018 and 2017 , we recognized amortization expense of $9 million and $7 million , respectively. At September 30, 2018 and December 31, 2017, the unamortized customer contract costs were $31 million and $35 million Net operating revenues for our Hospital Operations and other and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. The table below shows our sources of net operating revenues less provision for doubtful accounts and implicit price concessions from continuing operations: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Hospital Operations and other: Net patient service revenues from hospitals and related Medicare $ 681 $ 773 $ 2,164 $ 2,455 Medicaid 336 252 971 806 Managed care 2,228 2,327 6,869 7,211 Self-pay 33 9 78 40 Indemnity and other 156 161 438 457 Total 3,434 3,522 10,520 10,969 Physician practices revenues 280 270 825 810 Health plans 8 10 14 100 Revenue from other sources 40 64 83 187 Hospital Operations and other total prior to 3,762 3,866 11,442 12,066 Ambulatory Care 502 468 1,531 1,395 Conifer 371 401 1,161 1,203 Inter-segment eliminations (146 ) (149 ) (440 ) (463 ) Net operating revenues $ 4,489 $ 4,586 $ 13,694 $ 14,201 Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the nine months ended September 30, 2018 and 2017 by $11 million and $36 million , respectively. Estimated cost report settlements and valuation allowances are included in accounts receivable in the accompanying Condensed Consolidated Balance Sheets (see Note 2). We believe that we have made adequate provision for any adjustments that may result from final determination of amounts earned under all the above arrangements with Medicare and Medicaid. The table below shows the composition of net operating revenues less provision for doubtful accounts and implicit price concessions for our Ambulatory Care segment: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net patient service revenues $ 471 $ 434 $ 1,440 $ 1,305 Management fees 22 23 68 67 Revenue from other sources 9 11 23 23 Net operating revenues $ 502 $ 468 $ 1,531 $ 1,395 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenue cycle services – Tenet $ 141 $ 142 $ 424 $ 434 Revenue cycle services – other customers 203 229 655 674 Other services – Tenet 5 7 16 29 Other services – other customers 22 23 66 66 Net operating revenues $ 371 $ 401 $ 1,161 $ 1,203 Other services represent approximately 7% of Conifer’s revenue and include services such as value-based care, consulting and project services. Performance Obligations The following table includes Conifer’s revenue that is expected to be recognized in the future related to performance obligations that are unsatisfied, or partially unsatisfied, at the end of the reporting period. The amounts in the table primaril y consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume or contingency based contracts, performance incentives, penalties or other variable consideration that is considered constrained. Conifer’s contract with Catholic Health Initiatives (“CHI”), a minority interest owner of Conifer Health Solutions, LLC, represents the majority of the fixed fee revenue related to remaining performance obligations. Conifer’s contract term with CHI ends in 2032. Three Months Years Ending Later Years December 31, Total 2018 2019 2020 2021 2022 Performance obligations $ 8,032 $ 161 $ 653 $ 653 $ 604 $ 578 $ 5,383 |
PROPERTY AND PROFESSIONAL AND G
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | 9 Months Ended |
Sep. 30, 2018 | |
Property and Professional and General Liablity Insurance [Abstract] | |
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE Property Insurance We have property, business interruption and related insurance coverage to mitigate the financial impact of catastrophic events or perils that is subject to deductible provisions based on the terms of the policies. These policies are on an occurrence basis. For the policy period April 1, 2018 through March 31, 2019, we have coverage totaling $850 million per occurrence, after deductibles and exclusions, with annual aggregate sub-limits of $100 million for floods, $200 million for earthquakes and a per-occurrence sub-limit of $200 million for named windstorms with no annual aggregate. With respect to fires and other perils, excluding floods, earthquakes and named windstorms, the total $850 million limit of coverage per occurrence applies. Deductibles are 5% of insured values up to a maximum of $25 million for California earthquakes, floods and wind-related claims, and 2% of insured values for New Madrid fault earthquakes, with a maximum per claim deductible of $25 million . Floods and certain other covered losses, including fires and other perils, have a minimum deductible of $1 million . Professional and General Liability Reserves At September 30, 2018 and December 31, 2017 , the aggregate current and long-term professional and general liability reserves in our accompanying Condensed Consolidated Balance Sheets were approximately $857 million and $854 million , respectively. These reserves include the reserves recorded by our captive insurance subsidiaries and our self-insured retention reserves recorded based on modeled estimates for the portion of our professional and general liability risks, including incurred but not reported claims, for which we do not have insurance coverage. We estimated the reserves for losses and related expenses using expected loss-reporting patterns discounted to their present value under a risk-free rate approach using a Federal Reserve seven -year maturity rate of 3.01% at September 30, 2018 and 2.33% at December 31, 2017 . If the aggregate limit of any of our professional and general liability policies is exhausted, in whole or in part, it could deplete or reduce the limits available to pay any other material claims applicable to that policy period. Included in other operating expenses, net, in the accompanying Condensed Consolidated Statements of Operations is malpractice expense of $267 million and $225 million for the nine months ended September 30, 2018 and 2017 |
CLAIMS AND LAWSUITS
CLAIMS AND LAWSUITS | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
CLAIMS AND LAWSUITS | CLAIMS AND LAWSUITS We operate in a highly regulated and litigious industry. Healthcare companies are subject to numerous investigations by various governmental agencies. Further, private parties have the right to bring qui tam or “whistleblower” lawsuits against companies that allegedly submit false claims for payments to, or improperly retain overpayments from, the government and, in some states, private payers. We and our subsidiaries have received inquiries in recent years from government agencies, and we may receive similar inquiries in future periods. We are also subject to class action lawsuits, employment-related claims and other legal actions in the ordinary course of business. Some of these actions may involve large demands, as well as substantial defense costs. We cannot predict the outcome of current or future legal actions against us or the effect that judgments or settlements in such matters may have on us. We are also subject to a non-prosecution agreement, as described in our Annual Report and our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2018 and June 30, 2018. If we fail to comply with this agreement, we could be subject to criminal prosecution, substantial penalties and exclusion from participation in federal healthcare programs, any of which could adversely impact our business, financial condition, results of operations or cash flows. We record accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and we can reasonably estimate the amount of the loss or a range of loss. Significant judgment is required in both the determination of the probability of a loss and the determination as to whether a loss is reasonably estimable. These determinations are updated at least quarterly and are adjusted to reflect the effects of negotiations, settlements, rulings, advice of legal counsel and technical experts, and other information and events pertaining to a particular matter. If a loss on a material matter is reasonably possible and estimable, we disclose an estimate of the loss or a range of loss. In cases where we have not disclosed an estimate, we have concluded that the loss is either not reasonably possible or the loss, or a range of loss, is not reasonably estimable, based on available information. Shareholder Derivative Litigation In January 2017, the Dallas County District Court consolidated two previously disclosed shareholder derivative lawsuits filed by purported shareholders of the Company’s common stock on behalf of the Company against current and former officers and directors into a single matter captioned In re Tenet Healthcare Corporation Shareholder Derivative Litigation . The plaintiffs filed a consolidated shareholder derivative petition in February 2017. (A separate shareholder derivative lawsuit, captioned Horwitz, derivatively on behalf of Tenet Healthcare Corporation , was filed in January 2017 in the U.S. District Court for the Northern District of Texas; however, in January 2018, the plaintiff in the Horwitz matter voluntarily dismissed his case.) The consolidated shareholder derivative petition alleges that false or misleading statements or omissions concerning the Company’s financial performance and compliance policies, specifically with respect to the previously disclosed civil qui tam litigation and parallel criminal investigation of the Company and certain of its subsidiaries (together, the “Clinica de la Mama matters”), caused the price of the Company’s common stock to be artificially inflated. In addition, the plaintiffs allege that the defendants violated GAAP by failing to disclose an estimate of the possible loss or a range of loss related to the Clinica de la Mama matters. The plaintiffs claim that they did not make demand on the Company’s board of directors to bring the lawsuit because such a demand would have been futile. In May 2018, the judge in the consolidated shareholder derivative litigation entered an order lifting the previous year-long stay of the matter and, on July 6, 2018, the defendants filed pleadings seeking dismissal of the lawsuit. On October 8, 2018, the judge granted defendants’ motion to dismiss, but also agreed to give plaintiffs 30 days to replead their complaint. If necessary, the defendants intend to continue to vigorously contest the plaintiffs’ allegations in this matter. Antitrust Class Action Lawsuit Filed by Registered Nurses in San Antonio In Maderazo, et al. v. VHS San Antonio Partners, L.P. d/b/a Baptist Health Systems, et al. , filed in June 2006 in the U.S. District Court for the Western District of Texas, a purported class of registered nurses employed by three unaffiliated San Antonio-area hospital systems allege those hospital systems, including our Baptist Health System, and other unidentified San Antonio regional hospitals violated Section §1 of the federal Sherman Act by conspiring to depress nurses’ compensation and exchanging compensation-related information among themselves in a manner that reduced competition and suppressed the wages paid to such nurses. The suit seeks unspecified damages (subject to trebling under federal law), interest, costs and attorneys’ fees. The case was stayed from 2008 through mid-2015. At this time, we are awaiting the court’s ruling on class certification and will continue to vigorously defend ourselves against the plaintiffs’ allegations. It remains impossible at this time to predict the outcome of these proceedings with any certainty; however, we believe that the ultimate resolution of this matter will not have a material effect on our business, financial condition or results of operations. Ordinary Course Matters We are also subject to other claims and lawsuits arising in the ordinary course of business, including potential claims related to, among other things, the care and treatment provided at our hospitals and outpatient facilities, the application of various federal and state labor laws, tax audits and other matters. Although the results of these claims and lawsuits cannot be predicted with certainty, we believe that the ultimate resolution of these ordinary course claims and lawsuits will not have a material effect on our business or financial condition. New claims or inquiries may be initiated against us from time to time. These matters could (1) require us to pay substantial damages or amounts in judgments or settlements, which, individually or in the aggregate, could exceed amounts, if any, that may be recovered under our insurance policies where coverage applies and is available, (2) cause us to incur substantial expenses, (3) require significant time and attention from our management, and (4) cause us to close or sell hospitals or otherwise modify the way we conduct business. The table below presents reconciliations of the beginning and ending liability balances in connection with legal settlements and related costs recorded during the nine months ended September 30, 2018 and 2017 : Balances at Beginning of Period Litigation and Investigation Costs Cash Payments Balances at End of Period Nine Months Ended September 30, 2018 Continuing operations $ 12 $ 28 $ (24 ) $ 16 Discontinued operations — — — — $ 12 $ 28 $ (24 ) $ 16 Nine Months Ended September 30, 2017 Continuing operations $ 12 $ 12 $ (14 ) $ 10 Discontinued operations — — — — $ 12 $ 12 $ (14 ) $ 10 For the nine months ended September 30, 2018 and 2017 , we recorded costs of $28 million and $12 million |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES | 9 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES | REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES As previously disclosed, as part of the acquisition of United Surgical Partners International in 2015, we entered into a put/call agreement (the “Put/Call Agreement”) with respect to the equity interests in USPI held by our joint venture partners. In January 2016, Welsh, Carson, Anderson & Stowe (“WCAS”), on behalf of our joint venture partners, delivered a put notice for the minimum number of shares they were required to put to us in 2016 according to the Put/Call Agreement. In April 2016, we paid approximately $127 million to purchase those shares, which increased our ownership interest in USPI to approximately 56.3% . On May 1, 2017, we amended and restated the Put/Call Agreement to provide for, among other things, the acceleration of our acquisition of certain shares of USPI. On July 3, 2017, we paid approximately $716 million for the purchase of 23.7% of USPI, which increased our ownership interest to 80.0% , as well as the final adjustment to the 2016 purchase price. In April 2018, we reached an agreement with WCAS on behalf of our joint venture partners to provide for the acceleration of our acquisition of all the remaining shares they owned in USPI and the settlement of adjustments to the price we paid for the shares we purchased from our joint venture partners in 2017. Under the terms of the agreement, we paid WCAS approximately $630 million to buy our joint venture partners’ 15% ownership interest in USPI and to settle the adjustment to the price we paid in 2017 based on actual 2017 financial results. The agreement also satisfied any obligations under the previous amended and restated Put/Call Agreement with WCAS, including any future adjustments to the price for any future financial results of USPI. At September 30, 2018 , we owned 95.0% of USPI, as the agreement with WCAS did not have any impact on the separate put/call agreement with Baylor University Medical Center for the 5% ownership interest it holds in USPI. Due to the accelerations of our acquisitions of shares of USPI, we recorded the differences between the carrying values and the purchase prices as accretion of redeemable noncontrolling interest and additional paid-in-capital in the nine months ended September 30, 2018 and 2017 . The following table shows the changes in redeemable noncontrolling interests in equity of consolidated subsidiaries during the nine months ended September 30, 2018 and 2017 : Nine Months Ended 2018 2017 Balances at beginning of period $ 1,866 $ 2,393 Net income 135 155 Distributions paid to noncontrolling interests (107 ) (85 ) Accretion of redeemable noncontrolling interests 166 32 Purchases and sales of businesses and noncontrolling interests, net (616 ) (679 ) Balances at end of period $ 1,444 $ 1,816 The following tables show the composition by segment of our redeemable noncontrolling interests balances at September 30, 2018 and December 31, 2017 , as well as our net income available to redeemable noncontrolling interests for the nine months ended September 30, 2018 and 2017 : September 30, 2018 December 31, 2017 Hospital Operations and other $ 487 $ 519 Ambulatory Care 695 1,137 Conifer 262 210 Redeemable noncontrolling interests $ 1,444 $ 1,866 Nine Months Ended 2018 2017 Hospital Operations and other $ (17 ) $ 14 Ambulatory Care 102 103 Conifer 50 38 Net income available to redeemable noncontrolling interests $ 135 $ 155 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES During the three months ended September 30, 2018 , we recorded income tax expense of $6 million in continuing operations on pre-tax income of $71 million compared to an income tax benefit of $60 million on a pre-tax loss of $348 million during the three months ended September 30, 2017 . During the nine months ended September 30, 2018 , we recorded income tax expense of $120 million in continuing operations on pre-tax income of $481 million compared to an income tax benefit of $105 million on a pre-tax loss of $325 million during the nine months ended September 30, 2017 . Our provision for income taxes during interim reporting periods is calculated by applying an estimate of the annual effective tax rate for the full year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. In calculating “ordinary” income, non-taxable income or loss attributable to non-controlling interests has been deducted from pre-tax income or loss in the determination of the annualized effective tax rate used to calculate income taxes for the quarter. The reconciliation between the amount of recorded income tax expense (benefit) and the amount calculated at the statutory federal tax rate is shown in the following table: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Tax expense at statutory federal rate of 21% (35% for 2017) $ 15 $ (122 ) $ 101 $ (114 ) State income taxes, net of federal income tax benefit 3 8 20 13 Tax benefit available to noncontrolling interests (15 ) (25 ) (49 ) (79 ) Nondeductible goodwill — 104 7 104 Tax benefit related to loss on Aspen sale (18 ) — (18 ) — Change in tax contingency reserves, including interest — (1 ) — (3 ) Stock-based compensation — — 4 9 Change in valuation allowance-interest expense limitation 24 — 54 — Change in indefinite reinvestment assertion — (30 ) — (30 ) Change in valuation allowance-other — (5 ) — (5 ) Other items (3 ) 11 1 — Income tax expense (benefit) $ 6 $ (60 ) $ 120 $ (105 ) Following the enactment of the Tax Cuts and Jobs Act (the “Tax Act”) in December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. In December 2017, we recorded tax expense of $252 million as a provisional estimate of the impact of the Tax Act, including the decrease in the corporate income tax rate from 35% to 21%. During the quarter ended September 30, 2018, we updated the provisional estimate based on 2017 federal income tax filings that were nearing completion and recorded a tax benefit of $2 million . We have not completed our accounting for income tax effects of the Tax Act because we are still finalizing the impact of all 2017 tax return filings, and we continue to evaluate guidance issued by the Internal Revenue Service. The accounting will be completed within the one year measurement period prescribed by SAB 118. During the nine months ended September 30, 2018 , there were no adjustments to our estimated liabilities for uncertain tax positions. The total amount of unrecognized tax benefits at September 30, 2018 was $46 million , of which $44 million , if recognized, would impact our effective tax rate and income tax expense (benefit) from continuing operations. Our practice is to recognize interest and penalties related to income tax matters in income tax expense in our consolidated statements of operations. Total accrued interest and penalties on unrecognized tax benefits at September 30, 2018 were $4 million , all of which related to continuing operations. At September 30, 2018 , approximately $4 million |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | EARNINGS (LOSS) PER COMMON SHARE The following table is a reconciliation of the numerators and denominators of our basic and diluted earnings (loss) per common share calculations for our continuing operations for three and nine months ended September 30, 2018 and 2017 . Net income available (loss attributable) to our common shareholders is expressed in millions and weighted average shares are expressed in thousands. Net Income Available (Loss Attributable) Weighted Per-Share Three Months Ended September 30, 2018 Net loss attributable to Tenet Healthcare Corporation common shareholders $ (9 ) 102,402 $ (0.09 ) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (9 ) 102,402 $ (0.09 ) Three Months Ended September 30, 2017 Net loss attributable to Tenet Healthcare Corporation common shareholders $ (366 ) 100,812 $ (3.63 ) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (366 ) 100,812 $ (3.63 ) Nine Months Ended September 30, 2018 Net income available to Tenet Healthcare Corporation common shareholders $ 113 101,980 $ 1.11 Effect of dilutive stock options, restricted stock units and deferred compensation units — 1,822 (0.02 ) Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share $ 113 103,802 $ 1.09 Nine Months Ended September 30, 2017 Net loss attributable to Tenet Healthcare Corporation common shareholders $ (474 ) 100,475 $ (4.72 ) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (474 ) 100,475 $ (4.72 ) All potentially dilutive securities were excluded from the calculation of diluted loss per share for the three months ended September 30, 2018 and the three and nine months ended September 30, 2017 because we did not report income from continuing operations available to common shareholders in those periods. In circumstances where we do not have income from continuing operations available to common shareholders, the effect of stock options and other potentially dilutive securities is anti-dilutive, that is, a loss from continuing operations attributable to common shareholders has the effect of making the diluted loss per share less than the basic loss per share. Had we generated income from continuing operations available to common shareholders in the three months ended September 30, 2018 and the three and nine months ended September 30, 2017 , the effect (in thousands) of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase in shares of 2,173 and 711 for the three months ended September 30, 2018 and 2017 , respectively, and 747 for the nine months ended September 30, 2017 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Our non-financial assets and liabilities not permitted or required to be measured at fair value on a recurring basis typically relate to long-lived assets held and used, long-lived assets held for sale and goodwill. We are required to provide additional disclosures about fair value measurements as part of our financial statements for each major category of assets and liabilities measured at fair value on a non-recurring basis. The following tables present this information and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows. September 30, 2018 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 45 $ — $ 45 $ — $ 45 $ — $ 45 $ — December 31, 2017 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 456 $ — $ 456 $ — Other than temporarily impaired equity method investments 113 — 113 — $ 569 $ — $ 569 $ — As described in Note 5, in the nine months ended September 30, 2018 , we recorded $29 million of impairment charges, consisting primarily of $17 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for certain of our Chicago-area facilities , $9 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for Aspen and $3 million of other impairment charges. The fair value of our long-term debt (except for borrowings under the Credit Agreement) is based on quoted market prices (Level 1). The inputs used to establish the fair value of the borrowings outstanding under the Credit Agreement are considered to be Level 2 inputs, which include inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly. At September 30, 2018 and December 31, 2017 , the estimated fair value of our long-term debt was approximately 100.9% and 100.2% |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Preliminary purchase price allocations (representing the fair value of the consideration conveyed) for all acquisitions made during the nine months ended September 30, 2018 and 2017 are as follows: Nine Months Ended 2018 2017 Current assets $ 5 $ 4 Property and equipment 12 5 Other intangible assets 7 5 Goodwill 211 65 Other long-term assets 1 1 Previously held equity method investment (19 ) — Current liabilities 1 (4 ) Long-term liabilities (16 ) (1 ) Redeemable noncontrolling interests in equity of consolidated subsidiaries (18 ) (18 ) Noncontrolling interests (85 ) (13 ) Cash paid, net of cash acquired (97 ) (41 ) Gains on consolidations $ 2 $ 3 The goodwill generated from these transactions, the majority of which will not be deductible for income tax purposes, can be attributed to the benefits that we expect to realize from operating efficiencies and growth strategies. The goodwill total of $211 million from acquisitions completed during the nine months ended September 30, 2018 was recorded in our Ambulatory Care segment. Approximately $8 million and $5 million in transaction costs related to prospective and closed acquisitions were expensed during the nine month periods ended September 30, 2018 and 2017 , respectively, and are included in impairment and restructuring charges, and acquisition-related costs in the accompanying Condensed Consolidated Statements of Operations. We are required to allocate the purchase prices of acquired businesses to assets acquired or liabilities assumed and, if applicable, noncontrolling interests based on their fair values. The excess of the purchase price allocation over those fair values is recorded as goodwill. We are in process of finalizing the purchase price allocations, including valuations of the acquired property and equipment, other intangible assets and noncontrolling interests for some of our 2018 and 2017 acquisitions; therefore, those purchase price allocations are subject to adjustment once the valuations are completed. During the nine months ended September 30, 2018 and 2017 , we recognized gains totaling $2 million and $3 million |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Our business consists of our Hospital Operations and other segment, our Ambulatory Care segment and our Conifer segment. The factors for determining the reportable segments include the manner in which management evaluates operating performance combined with the nature of the individual business activities. Our Hospital Operations and other segment is comprised of our acute care and specialty hospitals, ancillary outpatient facilities, urgent care centers, microhospitals and physician practices . At September 30, 2018 , our subsidiaries operated 68 hospitals (certain of which are classified as held for sale, as described in Note 4), serving primarily urban and suburban communities in 10 states. Our Ambulatory Care segment is comprised of the operations of USPI and included nine Aspen facilities in the United Kingdom until their divestiture effective August 17, 2018. At September 30, 2018 , USPI had interests in 255 ambulatory surgery centers , 36 urgent care centers , 23 imaging centers and 21 surgical hospitals in 27 states . At September 30, 2018 , we owned 95.0% of USPI. Our Conifer segment provides healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities . At September 30, 2018 , Conifer provided services to approximately 780 Tenet and non-Tenet hospitals and other clients nationwide. In 2012, we entered into agreements documenting the terms and conditions of various services Conifer provides to Tenet hospitals, as well as certain administrative services our Hospital Operations and other segment provides to Conifer. The pricing terms for the services provided by each party to the other under these contracts were based on estimated third-party pricing terms in effect at the time the agreements were signed. At September 30, 2018 , we owned 76.2% of Conifer Health Solutions, LLC, which is the principal subsidiary of Conifer Holdings, Inc. The following tables include amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations: September 30, 2018 December 31, 2017 Assets: Hospital Operations and other $ 15,556 $ 16,466 Ambulatory Care 5,640 5,822 Conifer 1,069 1,097 Total $ 22,265 $ 23,385 Three Months Ended Nine Months Ended 2018 2017 2018 2017 Capital expenditures: Hospital Operations and other $ 115 $ 122 $ 343 $ 441 Ambulatory Care 18 16 46 37 Conifer 3 6 15 14 Total $ 136 $ 144 $ 404 $ 492 Net operating revenues: Hospital Operations and other total prior to inter-segment eliminations (1) $ 3,762 $ 3,866 $ 11,442 $ 12,066 Ambulatory Care 502 468 1,531 1,395 Conifer Tenet 146 149 440 463 Other customers 225 252 721 740 Total Conifer 371 401 1,161 1,203 Inter-segment eliminations (146 ) (149 ) (440 ) (463 ) Total $ 4,489 $ 4,586 $ 13,694 $ 14,201 Equity in earnings of unconsolidated affiliates: Hospital Operations and other $ 2 $ 4 $ 6 $ 4 Ambulatory Care 31 34 91 91 Total $ 33 $ 38 $ 97 $ 95 Adjusted EBITDA (2) : Hospital Operations and other (2) $ 312 $ 269 $ 1,059 $ 924 Ambulatory Care 184 159 547 476 Conifer 81 79 270 204 Total $ 577 $ 507 $ 1,876 $ 1,604 Depreciation and amortization: Hospital Operations and other $ 175 $ 185 $ 514 $ 560 Ambulatory Care 17 22 51 66 Conifer 12 12 37 36 Total $ 204 $ 219 $ 602 $ 662 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted EBITDA (2) $ 577 $ 507 $ 1,876 $ 1,604 Income (loss) from divested and closed businesses 9 (6 ) 9 (41 ) Depreciation and amortization (204 ) (219 ) (602 ) (662 ) Impairment and restructuring charges, and acquisition-related costs (46 ) (329 ) (123 ) (403 ) Litigation and investigation costs (9 ) (6 ) (28 ) (12 ) Interest expense (249 ) (257 ) (758 ) (775 ) Loss from early extinguishment of debt — (138 ) (2 ) (164 ) Other non-operating expense, net — (4 ) (2 ) (14 ) Net gains on sales, consolidation and deconsolidation of facilities (7 ) 104 111 142 Income (loss) from continuing operations, before income taxes $ 71 $ (348 ) $ 481 $ (325 ) (1) Hospital Operations and other revenues includes health plan revenues of $8 million and $14 million for the three and nine months ended September 30, 2018 , respectively, and $10 million and $100 million for the three and nine months ended September 30, 2017 , respectively. (2) Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of $9 million for both of the three and nine month periods ended September 30, 2018 , and $(6) million and $(41) million for the three and nine months ended September 30, 2017 |
RECENT ACCOUNTING STANDARDS
RECENT ACCOUNTING STANDARDS | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING STANDARDS | RECENT ACCOUNTING STANDARDS |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is a diversified healthcare services company. At September 30, 2018 , we operated 68 hospitals, 21 surgical hospitals and approximately 475 outpatient centers in the United States through our subsidiaries, partnerships and joint ventures, including USPI Holding Company, Inc. (“USPI”). Our Conifer Holdings, Inc. (“Conifer”) subsidiary provides healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities . This quarterly report supplements our Annual Report on Form 10-K for the year ended December 31, 2017 (“Annual Report”). As permitted by the Securities and Exchange Commission for interim reporting, we have omitted certain notes and disclosures that substantially duplicate those in our Annual Report. For further information, refer to the audited Consolidated Financial Statements and notes included in our Annual Report. Unless otherwise indicated, all financial and statistical data included in these notes to our Condensed Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). Effective January 1, 2018, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) using a modified retrospective method of application to all contracts existing on January 1, 2018. The core principle of the guidance in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For our Hospital Operations and other and Ambulatory Care segments, the adoption of ASU 2014-09 resulted in changes to our presentation for and disclosure of revenue primarily related to uninsured or underinsured patients. Prior to the adoption of ASU 2014-09, a significant portion of our provision for doubtful accounts related to self-pay patients, as well as co-pays, co-insurance amounts and deductibles owed to us by patients with insurance. Under ASU 2014-09, the estimated uncollectable amounts due from these patients are generally considered implicit price concessions that are a direct reduction to net operating revenues, with a corresponding material reduction in the amounts presented separately as provision for doubtful accounts. For the nine months ended September 30, 2018 , we recorded approximately $1.052 billion of implicit price concessions as a direct reduction of net operating revenues that would have been recorded as provision for doubtful accounts prior to the adoption of ASU 2014-09. At January 1, 2018, we reclassified $171 million of revenues related to patients who were still receiving inpatient care in our facilities at that date from accounts receivable, less allowance for doubtful accounts, to contract assets, which are included in other current assets in the accompanying Condensed Consolidated Balance Sheet at September 30, 2018 . The adoption of ASU 2014-09 also resulted in changes to our presentation and disclosure of customer contract assets and liabilities and the assessment of variable consideration under customer contracts, which are further discussed in Note 3. Also effective January 1, 2018, we early adopted ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220)” (“ASU 2018-02”), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded income tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) and requires certain disclosures about stranded income tax effects. We applied the amendments in ASU 2018-02 in the period of adoption, resulting in a reclassification of $36 million of stranded income tax effects from accumulated other comprehensive loss to accumulated deficit in the three months ended March 31, 2018. In addition, we adopted ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) effective January 1, 2018, which supersedes the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. Upon adoption of ASU 2016-01 on January 1, 2018, we recorded a cumulative effect adjustment to decrease accumulated deficit by approximately $7 million for unrealized gains on equity securities. Also effective January 1, 2018, we adopted ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments” and ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash,” both of which were applied using a retrospective transition method to each period presented. The adoption of these standards did not have any effect on our statements of cash flows. Although the Condensed Consolidated Financial Statements and related notes within this document are unaudited, we believe all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. In preparing our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), we are required to make estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and these accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable given the particular circumstances in which we operate. Actual results may vary from those estimates. Financial and statistical information we report to other regulatory agencies may be prepared on a basis other than GAAP or using different assumptions or reporting periods and, therefore, may vary from amounts presented herein. Although we make every effort to ensure that the information we report to those agencies is accurate, complete and consistent with applicable reporting guidelines, we cannot be responsible for the accuracy of the information they make available to the public. Operating results for the three and nine month periods ended September 30, 2018 |
Translation of Foreign Currencies | Translation of Foreign Currencies |
Net Operating Revenues | Net Operating Revenues ASU 2014-09 was issued to clarify the principles for recognizing revenue, to remove inconsistencies and weaknesses in revenue recognition requirements, and to provide a more robust framework for addressing revenue issues. Our adoption of ASU 2014-09 was accomplished using a modified retrospective method of application, and our accounting policies related to revenues were revised accordingly effective January 1, 2018, as discussed below. We recognize net operating revenues in the period in which we satisfy our performance obligations under contracts by transferring our services to our customers. Net operating revenues are recognized in the amounts to which we expect to be entitled, which are the transaction prices allocated to the distinct services. Net operating revenues for our Hospital Operations and other and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact with Uninsured Patients (“ Compact ”) and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. Net Patient Service Revenues— We report net patient service revenues at the amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care. These amounts are due from patients, third-party payers (including managed care payers and government programs) and others, and they include variable consideration for retroactive revenue adjustments due to settlement of audits, reviews and investigations. Generally, we bill our patients and third-party payers several days after the services are performed or shortly after discharge. Revenues are recognized as performance obligations are satisfied. We determine performance obligations based on the nature of the services we provide. We recognize revenues for performance obligations satisfied over time based on actual charges incurred in relation to total expected charges. We believe that this method provides a faithful depiction of the transfer of services over the term of performance obligations based on the inputs needed to satisfy the obligations. Generally, performance obligations satisfied over time relate to patients in our hospitals receiving inpatient acute care services. We measure performance obligations from admission to the point when there are no further services required for the patient, which is generally the time of discharge. We recognize revenues for performance obligations satisfied at a point in time, which generally relate to patients receiving outpatient services, when: (1) services are provided; and (2) we do not believe the patient requires additional services. Because our patient service performance obligations relate to contracts with a duration of less than one year, we have elected to apply the optional exemption provided in FASB Accounting Standards Codification (“ASC”) 606-10-50-14(a) and, therefore, we are not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations referred to above are primarily related to inpatient acute care services at the end of the reporting period. The performance obligations for these contracts are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period. We determine the transaction price based on gross charges for services provided, reduced by contractual adjustments provided to third-party payers, discounts provided to uninsured patients in accordance with our Compact , and implicit price concessions provided primarily to uninsured patients. We determine our estimates of contractual adjustments and discounts based on contractual agreements, our discount policies and historical experience. We determine our estimate of implicit price concessions based on our historical collection experience with these classes of patients using a portfolio approach as a practical expedient to account for patient contracts as collective groups rather than individually. The financial statement effects of using this practical expedient are not materially different from an individual contract approach. Gross charges are retail charges. They are not the same as actual pricing, and they generally do not reflect what a hospital is ultimately paid and, therefore, are not displayed in our consolidated statements of operations. Hospitals are typically paid amounts that are negotiated with insurance companies or are set by the government. Gross charges are used to calculate Medicare outlier payments and to determine certain elements of payment under managed care contracts (such as stop-loss payments). Because Medicare requires that a hospital’s gross charges be the same for all patients (regardless of payer category), gross charges are what hospitals charge all patients prior to the application of discounts and allowances. Revenues under the traditional fee-for-service Medicare and Medicaid programs are based primarily on prospective payment systems. Retrospectively determined cost-based revenues under these programs, which were more prevalent in earlier periods, and certain other payments, such as Indirect Medical Education, Direct Graduate Medical Education, disproportionate share hospital and bad debt expense reimbursement, which are based on our hospitals’ cost reports, are estimated using historical trends and current factors. Cost report settlements under these programs are subject to audit by Medicare and Medicaid auditors and administrative and judicial review, and it can take several years until final settlement of such matters is determined and completely resolved. Because the laws, regulations, instructions and rule interpretations governing Medicare and Medicaid reimbursement are complex and change frequently, the estimates we record could change by material amounts. We have a system and estimation process for recording Medicare net patient revenue and estimated cost report settlements. As a result, we record accruals to reflect the expected final settlements on our cost reports. For filed cost reports, we record the accrual based on those cost reports and subsequent activity, and record a valuation allowance against those cost reports based on historical settlement trends. The accrual for periods for which a cost report is yet to be filed is recorded based on estimates of what we expect to report on the filed cost reports, and a corresponding valuation allowance is recorded as previously described. Cost reports generally must be filed within five months after the end of the annual cost reporting period. After the cost report is filed, the accrual and corresponding valuation allowance may need to be adjusted. Settlements with third-party payers for retroactive revenue adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care using the most likely outcome method. These settlements are estimated based on the terms of the payment agreement with the payer, correspondence from the payer and our historical settlement activity, including an assessment to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known (that is, new information becomes available), or as years are settled or are no longer subject to such audits, reviews and investigations. Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per-diem rates, discounted fee-for-service rates and/or other similar contractual arrangements. These revenues are also subject to review and possible audit by the payers, which can take several years before they are completely resolved. The payers are billed for patient services on an individual patient basis. An individual patient’s bill is subject to adjustment on a patient-by-patient basis in the ordinary course of business by the payers following their review and adjudication of each particular bill. We estimate the discounts for contractual allowances at the individual hospital level utilizing billing data on an individual patient basis. At the end of each month, on an individual hospital basis, we estimate our expected reimbursement for patients of managed care plans based on the applicable contract terms. Contractual allowance estimates are periodically reviewed for accuracy by taking into consideration known contract terms, as well as payment history. We believe our estimation and review process enables us to identify instances on a timely basis where such estimates need to be revised. We do not believe there were any adjustments to estimates of patient bills that were material to our revenues. In addition, on a corporate-wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans. Managed care accounts, net of contractual allowances recorded, are further reduced to their net realizable value through implicit price concessions based on historical collection trends for these payers and other factors that affect the estimation process. We know of no claims, disputes or unsettled matters with any payer that would materially affect our revenues for which we have not adequately provided in the accompanying Condensed Consolidated Financial Statements. Generally, patients who are covered by third-party payers are responsible for related co-pays, co-insurance and deductibles, which vary in amount. We also provide services to uninsured patients and offer uninsured patients a discount from standard charges. We estimate the transaction price for patients with co-pays, co-insurance and deductibles and for those who are uninsured based on historical collection experience and current market conditions. Under our Compact and other uninsured discount programs, the discount offered to certain uninsured patients is recognized as a contractual allowance, which reduces net operating revenues at the time the self-pay accounts are recorded. The uninsured patient accounts, net of contractual allowances recorded, are further reduced to their net realizable value at the time they are recorded through implicit price concessions based on historical collection trends for self-pay accounts and other factors that affect the estimation process. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on unemployment rates and the number of uninsured and underinsured patients, the volume of patients through our emergency departments, the increased burden of co-pays, co-insurance amounts and deductibles to be made by patients with insurance, and business practices related to collection efforts. These factors continuously change and can have an impact on collection trends and our estimation process. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments to net patient revenues in the period of the change. We have provided implicit price concessions, primarily to uninsured patients and patients with co-pays, co-insurance and deductibles. The implicit price concessions included in estimating the transaction price represent the difference between amounts billed to patients and the amounts we expect to collect based on our collection history with similar patients. Although outcomes vary, our policy is to attempt to collect amounts due from patients, including co-pays, co-insurance and deductibles due from patients with insurance, at the time of service while complying with all federal and state statutes and regulations, including, but not limited to, the Emergency Medical Treatment and Active Labor Act (“EMTALA”). Generally, as required by EMTALA, patients may not be denied emergency treatment due to inability to pay. Therefore, services, including the legally required medical screening examination and stabilization of the patient, are performed without delaying to obtain insurance information. In non-emergency circumstances or for elective procedures and services, it is our policy to verify insurance prior to a patient being treated; however, there are various exceptions that can occur. Such exceptions can include, for example, instances where (1) we are unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid or Victims of Crime, and it takes several days or weeks before qualification for such benefits is confirmed or denied, and (3) under physician orders we provide services to patients that require immediate treatment. We also provide charity care to patients who are financially unable to pay for the healthcare services they receive. Most patients who qualify for charity care are charged a per-diem amount for services received, subject to a cap. Except for the per-diem amounts, our policy is not to pursue collection of amounts determined to qualify as charity care; therefore, we do not report these amounts in net operating revenues. Patient advocates from Conifer’s Medical Eligibility Program screen patients in the hospital to determine whether those patients meet eligibility requirements for financial assistance programs. They also expedite the process of applying for these government programs. Conifer Revenues— Our Conifer segment recognizes revenue from its contracts when Conifer’s performance obligations are satisfied, which is generally as services are rendered. Revenue is recognized in an amount that reflects the consideration to which Conifer expects to be entitled. At contract inception, Conifer assesses the services specified in its contracts with customers and identifies a performance obligation for each distinct contracted service. Conifer identifies the performance obligations and considers all the services provided under the contract. Conifer generally considers the following distinct services as separate performance obligations: • revenue cycle management services; • value-based care services; • patient communication and engagement services; • consulting services; and • other client-defined projects. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Investments in Debt and Equity Securities | Investments in Debt and Equity Securities Prior to the adoption of ASU 2016-01 on January 1, 2018, we classified investments in debt and equity securities as either available-for-sale, held-to-maturity or as part of a trading portfolio. At December 31, 2017, we had no significant investments in securities classified as either held-to-maturity or trading. We carried securities classified as available-for-sale at fair value. We reported their unrealized gains and losses, net of taxes, as accumulated other comprehensive income (loss) unless we determined that a loss was other-than-temporary, at which point we would record a loss in our consolidated statements of operations. We included realized gains or losses in our consolidated statements of operations based on the specific identification method. Subsequent to the adoption of ASU 2016-01 on January 1, 2018, we classify investments in debt securities as either available-for-sale, held-to-maturity or as part of a trading portfolio, but these classifications are no longer applicable to equity securities. At September 30, 2018 |
Investments in Unconsolidated Affiliates | Investments in Unconsolidated Affiliates We control 228 of the facilities within our Ambulatory Care segment and, therefore, consolidate their results. We account for many of the facilities our Ambulatory Care segment operates ( 107 of 335 at September 30, 2018 |
Recent Accounting Standards | RECENT ACCOUNTING STANDARDS |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of other intangible assets | The following tables provide information regarding other intangible assets, which are included in the accompanying Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017 : Gross Accumulated Net Book At September 30, 2018: Capitalized software costs $ 1,680 $ (842 ) $ 838 Trade names 102 — 102 Contracts 865 (72 ) 793 Other 105 (76 ) 29 Total $ 2,752 $ (990 ) $ 1,762 Gross Accumulated Net Book At December 31, 2017: Capitalized software costs $ 1,582 $ (754 ) $ 828 Trade names 102 — 102 Contracts 859 (60 ) 799 Other 106 (69 ) 37 Total $ 2,649 $ (883 ) $ 1,766 |
Schedule of estimated future amortization of intangibles with finite useful lives | Estimated future amortization of intangibles with finite useful lives at September 30, 2018 is as follows: Three Months Years Ending Later Years December 31, Total 2018 2019 2020 2021 2022 Amortization of intangible assets $ 1,090 $ 41 $ 152 $ 127 $ 108 $ 97 $ 565 |
Schedule of equity method investments | Summarized financial information for the equity method investees within our Ambulatory Care segment is included in the following table, as well as summarized financial information for the four North Texas hospitals in which we held minority interests that were operated by our Hospital Operations and other segment through the divestiture of these investments effective March 1, 2018. We recorded a gain of approximately $13 million in the nine months ended September 30, 2018 due to the sales of our minority interests in these hospitals. For investments acquired during the reported periods, amounts reflect 100% of the investee’s results beginning on the date of our acquisition of the investment. Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net operating revenues $ 546 $ 635 $ 1,667 $ 1,819 Net income $ 126 $ 143 $ 374 $ 376 Net income available to the investees $ 80 $ 93 $ 240 $ 242 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Schedule of components of accounts receivable | The principal components of accounts receivable are shown in the table below: September 30, 2018 December 31, 2017 Continuing operations: Patient accounts receivable $ 2,336 $ 3,376 Allowance for doubtful accounts — (898 ) Estimated future recoveries 139 132 Net cost reports and settlements payable and valuation allowances 7 4 2,482 2,614 Discontinued operations 2 2 Accounts receivable $ 2,484 $ 2,616 |
Schedule of estimated costs for charity care and self-pay patients | The following table shows our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses and which exclude the costs of our health plan businesses) of caring for our self-pay patients and charity care patients, as well as revenues attributable to Medicaid DSH and other supplemental revenues we recognized in the three and nine months ended September 30, 2018 and 2017 : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Estimated costs for: Self-pay patients $ 172 $ 164 $ 477 $ 484 Charity care patients 28 29 91 92 Total $ 200 $ 193 $ 568 $ 576 Medicaid DSH and other supplemental revenues $ 233 $ 140 $ 651 $ 462 |
CONTRACT BALANCES (Tables)
CONTRACT BALANCES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule receivables, contract asset, and current and long-term contract liabilities | The opening and closing balances of contract assets for our Hospital Operations and other segment are as follows: 2018 2017 January 1, $ 171 $ — September 30, 152 — Increase/(decrease) $ (19 ) $ — Contract Liability- Contract Liability- Contract Asset- Current Long-Term Receivables Unbilled Revenue Deferred Revenue Deferred Revenue January 1, 2018 $ 89 $ 10 $ 80 $ 21 September 30, 2018 89 11 74 21 Increase/(decrease) $ — $ 1 $ (6 ) $ — January 1, 2017 $ 67 $ 8 $ 76 $ 26 September 30, 2017 102 6 79 22 Increase/(decrease) $ 35 $ (2 ) $ 3 $ (4 ) |
ASSETS AND LIABILITIES HELD F_2
ASSETS AND LIABILITIES HELD FOR SALE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operation, Additional Disclosures [Abstract] | |
Assets and liabilities classified as held for sale | The following table provides information on significant components of our business that have been disposed of since June 30, 2017 or are classified as held for sale at September 30, 2018 : Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Significant disposals: Income (loss) from continuing operations, before income taxes Houston (includes an $111 million gain on sale $ — $ 108 $ — $ 136 Philadelphia (includes $235 million of impairment charges 1 (233 ) (10 ) (245 ) MacNeal (includes an $88 million gain on sale (7 ) 5 90 23 Aspen (includes $59 million of impairment charges (6 ) (63 ) (6 ) (69 ) Total $ (12 ) $ (183 ) $ 74 $ (155 ) Significant planned divestitures classified as held for sale: Income (loss) from continuing operations, before income taxes Chicago-area (includes $17 million of impairment charges $ (10 ) $ (2 ) $ (25 ) $ (5 ) Total $ (10 ) $ (2 ) $ (25 ) $ (5 ) September 30, 2018 were comprised of the following: Accounts receivable $ 56 Other current assets 18 Investments and other long-term assets 2 Property and equipment 45 Goodwill 7 Current liabilities (64 ) Long-term liabilities (7 ) Net assets held for sale $ 57 |
LONG-TERM DEBT AND LEASE OBLI_2
LONG-TERM DEBT AND LEASE OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Long-term Debt and Capital Lease Obligations [Abstract] | |
Summary of long-term debt | The table below shows our long-term debt at September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Senior unsecured notes: 5.500% due 2019 $ 500 $ 500 6.750% due 2020 300 300 8.125% due 2022 2,800 2,800 6.750% due 2023 1,872 1,900 7.000% due 2025 478 500 6.875% due 2031 362 430 Senior secured first lien notes: 4.750% due 2020 500 500 6.000% due 2020 1,800 1,800 4.500% due 2021 850 850 4.375% due 2021 1,050 1,050 4.625% due 2024 1,870 1,870 Senior secured second lien notes: 7.500% due 2022 750 750 5.125% due 2025 1,410 1,410 Capital leases 424 431 Mortgage notes 78 77 Unamortized issue costs, note discounts and premiums (194 ) (231 ) Total long-term debt 14,850 14,937 Less current portion 672 146 Long-term debt, net of current portion $ 14,178 $ 14,791 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan [Abstract] | |
Summary of stock option activity | The following table summarizes stock option activity during the nine months ended September 30, 2018 : Options Weighted Average Aggregate Weighted Average (In Millions) Outstanding at December 31, 2017 2,564,822 $ 20.35 Granted 635,196 21.33 Exercised (612,074 ) 18.36 Forfeited/Expired (299,581 ) 36.21 Outstanding at September 30, 2018 2,288,363 $ 19.08 $ 22 7.0 years Vested and expected to vest at September 30, 2018 2,288,363 $ 19.08 $ 22 7.0 years Exercisable at September 30, 2018 774,812 $ 17.34 $ 9 3.4 years |
Schedule of assumptions used to determine fair value of stock options | These fair values were calculated based on each grant date, using a Monte Carlo simulation with the following assumptions: Nine Months Ended September 30, Three Months Ended September 30, Three Months Ended 2018 2017 Expected volatility 46% 46% 49% Expected dividend yield 0% 0% 0% Expected life 6.2 years 3.0 years 6.2 years Expected forfeiture rate 0% 0% 0% Risk-free interest rate 2.72% 1.92% 2.15% |
Summary of information about stock options by range of exercise prices | The following table summarizes information about our outstanding stock options at September 30, 2018 : Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted Average Weighted Average Number of Weighted Average $0.00 to $4.569 90,184 0.4 years $ 4.56 90,184 $ 4.56 $4.57 to $19.759 1,292,315 7.0 years 18.18 413,960 16.46 $19.76 to $35.430 905,864 7.7 years 21.81 270,668 22.94 2,288,363 7.0 years $ 19.08 774,812 $ 17.34 |
Summary of restricted stock unit activity | The following table summarizes restricted stock unit activity during the nine months ended September 30, 2018 : Restricted Stock Weighted Average Grant Unvested at December 31, 2017 2,253,988 $ 35.20 Granted 734,091 24.70 Vested (872,062 ) 34.03 Forfeited (128,074 ) 36.24 Unvested at September 30, 2018 1,987,943 $ 31.77 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in consolidated equity | The following tables show the changes in consolidated equity during the nine months ended September 30, 2018 and 2017 (dollars in millions, share amounts in thousands): Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2017 100,972 $ 7 $ 4,859 $ (204 ) $ (2,390 ) $ (2,419 ) $ 686 $ 539 Net income — — — — 99 — 31 130 Distributions paid to noncontrolling interests — — — — — — (34 ) (34 ) Other comprehensive income — — — 8 — — — 8 Accretion of redeemable noncontrolling interests — — (37 ) — — — — (37 ) Purchases (sales) of businesses and noncontrolling interests — — (4 ) — — — (2 ) (6 ) Cumulative effect of accounting change — — — (43 ) 43 — — — Stock-based compensation expense, tax benefit and issuance of common stock 1,017 — 15 — — 1 — 16 Balances at March 31, 2018 101,989 $ 7 $ 4,833 $ (239 ) $ (2,248 ) $ (2,418 ) $ 681 $ 616 Net income — — — — 26 — 42 68 Distributions paid to noncontrolling interests — — — — — — (38 ) (38 ) Other comprehensive loss — — — (4 ) — — — (4 ) Accretion of redeemable noncontrolling interests — — (123 ) — — — — (123 ) Purchases (sales) of businesses and noncontrolling interests — — (2 ) — — — 45 43 Stock-based compensation expense, tax benefit and issuance of common stock 312 — 14 — — — — 14 Balances at June 30, 2018 102,301 $ 7 $ 4,722 $ (243 ) $ (2,222 ) $ (2,418 ) $ 730 $ 576 Net income — — — — (9 ) — 40 31 Distributions paid to noncontrolling interests — — — — — — (40 ) (40 ) Other comprehensive income — — — 41 — — — 41 Accretion of redeemable noncontrolling interests — — (6 ) — — — — (6 ) Purchases (sales) of businesses and noncontrolling interests — — 3 — — — 36 39 Stock-based compensation expense, tax benefit and issuance of common stock 146 — 14 — — 3 — 17 Balances at September 30, 2018 102,447 $ 7 $ 4,733 $ (202 ) $ (2,231 ) $ (2,415 ) $ 766 $ 658 |
NET OPERATING REVENUES (Tables)
NET OPERATING REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of operating revenues less provision for doubtful accounts and implicit price concessions | The table below shows our sources of net operating revenues less provision for doubtful accounts and implicit price concessions from continuing operations: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Hospital Operations and other: Net patient service revenues from hospitals and related Medicare $ 681 $ 773 $ 2,164 $ 2,455 Medicaid 336 252 971 806 Managed care 2,228 2,327 6,869 7,211 Self-pay 33 9 78 40 Indemnity and other 156 161 438 457 Total 3,434 3,522 10,520 10,969 Physician practices revenues 280 270 825 810 Health plans 8 10 14 100 Revenue from other sources 40 64 83 187 Hospital Operations and other total prior to 3,762 3,866 11,442 12,066 Ambulatory Care 502 468 1,531 1,395 Conifer 371 401 1,161 1,203 Inter-segment eliminations (146 ) (149 ) (440 ) (463 ) Net operating revenues $ 4,489 $ 4,586 $ 13,694 $ 14,201 Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net patient service revenues $ 471 $ 434 $ 1,440 $ 1,305 Management fees 22 23 68 67 Revenue from other sources 9 11 23 23 Net operating revenues $ 502 $ 468 $ 1,531 $ 1,395 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenue cycle services – Tenet $ 141 $ 142 $ 424 $ 434 Revenue cycle services – other customers 203 229 655 674 Other services – Tenet 5 7 16 29 Other services – other customers 22 23 66 66 Net operating revenues $ 371 $ 401 $ 1,161 $ 1,203 |
Performance obligation, expected timing of satisfaction | The following table includes Conifer’s revenue that is expected to be recognized in the future related to performance obligations that are unsatisfied, or partially unsatisfied, at the end of the reporting period. The amounts in the table primaril y consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume or contingency based contracts, performance incentives, penalties or other variable consideration that is considered constrained. Conifer’s contract with Catholic Health Initiatives (“CHI”), a minority interest owner of Conifer Health Solutions, LLC, represents the majority of the fixed fee revenue related to remaining performance obligations. Conifer’s contract term with CHI ends in 2032. Three Months Years Ending Later Years December 31, Total 2018 2019 2020 2021 2022 Performance obligations $ 8,032 $ 161 $ 653 $ 653 $ 604 $ 578 $ 5,383 |
CLAIMS AND LAWSUITS (Tables)
CLAIMS AND LAWSUITS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Reconciliations of legal settlements and related costs | The table below presents reconciliations of the beginning and ending liability balances in connection with legal settlements and related costs recorded during the nine months ended September 30, 2018 and 2017 : Balances at Beginning of Period Litigation and Investigation Costs Cash Payments Balances at End of Period Nine Months Ended September 30, 2018 Continuing operations $ 12 $ 28 $ (24 ) $ 16 Discontinued operations — — — — $ 12 $ 28 $ (24 ) $ 16 Nine Months Ended September 30, 2017 Continuing operations $ 12 $ 12 $ (14 ) $ 10 Discontinued operations — — — — $ 12 $ 12 $ (14 ) $ 10 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
Schedule of changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | The following table shows the changes in redeemable noncontrolling interests in equity of consolidated subsidiaries during the nine months ended September 30, 2018 and 2017 : Nine Months Ended 2018 2017 Balances at beginning of period $ 1,866 $ 2,393 Net income 135 155 Distributions paid to noncontrolling interests (107 ) (85 ) Accretion of redeemable noncontrolling interests 166 32 Purchases and sales of businesses and noncontrolling interests, net (616 ) (679 ) Balances at end of period $ 1,444 $ 1,816 The following tables show the composition by segment of our redeemable noncontrolling interests balances at September 30, 2018 and December 31, 2017 , as well as our net income available to redeemable noncontrolling interests for the nine months ended September 30, 2018 and 2017 : September 30, 2018 December 31, 2017 Hospital Operations and other $ 487 $ 519 Ambulatory Care 695 1,137 Conifer 262 210 Redeemable noncontrolling interests $ 1,444 $ 1,866 Nine Months Ended 2018 2017 Hospital Operations and other $ (17 ) $ 14 Ambulatory Care 102 103 Conifer 50 38 Net income available to redeemable noncontrolling interests $ 135 $ 155 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation between reported income tax expense (benefit) and income taxes calculated by the statutory federal income tax rate | The reconciliation between the amount of recorded income tax expense (benefit) and the amount calculated at the statutory federal tax rate is shown in the following table: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Tax expense at statutory federal rate of 21% (35% for 2017) $ 15 $ (122 ) $ 101 $ (114 ) State income taxes, net of federal income tax benefit 3 8 20 13 Tax benefit available to noncontrolling interests (15 ) (25 ) (49 ) (79 ) Nondeductible goodwill — 104 7 104 Tax benefit related to loss on Aspen sale (18 ) — (18 ) — Change in tax contingency reserves, including interest — (1 ) — (3 ) Stock-based compensation — — 4 9 Change in valuation allowance-interest expense limitation 24 — 54 — Change in indefinite reinvestment assertion — (30 ) — (30 ) Change in valuation allowance-other — (5 ) — (5 ) Other items (3 ) 11 1 — Income tax expense (benefit) $ 6 $ (60 ) $ 120 $ (105 ) |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of numerators and denominators of our basic and diluted loss per common share | The following table is a reconciliation of the numerators and denominators of our basic and diluted earnings (loss) per common share calculations for our continuing operations for three and nine months ended September 30, 2018 and 2017 . Net income available (loss attributable) to our common shareholders is expressed in millions and weighted average shares are expressed in thousands. Net Income Available (Loss Attributable) Weighted Per-Share Three Months Ended September 30, 2018 Net loss attributable to Tenet Healthcare Corporation common shareholders $ (9 ) 102,402 $ (0.09 ) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (9 ) 102,402 $ (0.09 ) Three Months Ended September 30, 2017 Net loss attributable to Tenet Healthcare Corporation common shareholders $ (366 ) 100,812 $ (3.63 ) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (366 ) 100,812 $ (3.63 ) Nine Months Ended September 30, 2018 Net income available to Tenet Healthcare Corporation common shareholders $ 113 101,980 $ 1.11 Effect of dilutive stock options, restricted stock units and deferred compensation units — 1,822 (0.02 ) Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share $ 113 103,802 $ 1.09 Nine Months Ended September 30, 2017 Net loss attributable to Tenet Healthcare Corporation common shareholders $ (474 ) 100,475 $ (4.72 ) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (474 ) 100,475 $ (4.72 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables present this information and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows. September 30, 2018 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 45 $ — $ 45 $ — $ 45 $ — $ 45 $ — December 31, 2017 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 456 $ — $ 456 $ — Other than temporarily impaired equity method investments 113 — 113 — $ 569 $ — $ 569 $ — |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of preliminary purchase price allocation | Preliminary purchase price allocations (representing the fair value of the consideration conveyed) for all acquisitions made during the nine months ended September 30, 2018 and 2017 are as follows: Nine Months Ended 2018 2017 Current assets $ 5 $ 4 Property and equipment 12 5 Other intangible assets 7 5 Goodwill 211 65 Other long-term assets 1 1 Previously held equity method investment (19 ) — Current liabilities 1 (4 ) Long-term liabilities (16 ) (1 ) Redeemable noncontrolling interests in equity of consolidated subsidiaries (18 ) (18 ) Noncontrolling interests (85 ) (13 ) Cash paid, net of cash acquired (97 ) (41 ) Gains on consolidations $ 2 $ 3 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of assets by reportable segment to consolidated assets | The following tables include amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations: September 30, 2018 December 31, 2017 Assets: Hospital Operations and other $ 15,556 $ 16,466 Ambulatory Care 5,640 5,822 Conifer 1,069 1,097 Total $ 22,265 $ 23,385 |
Reconciliation of other significant reconciling items from segments to consolidated | Three Months Ended Nine Months Ended 2018 2017 2018 2017 Capital expenditures: Hospital Operations and other $ 115 $ 122 $ 343 $ 441 Ambulatory Care 18 16 46 37 Conifer 3 6 15 14 Total $ 136 $ 144 $ 404 $ 492 Net operating revenues: Hospital Operations and other total prior to inter-segment eliminations (1) $ 3,762 $ 3,866 $ 11,442 $ 12,066 Ambulatory Care 502 468 1,531 1,395 Conifer Tenet 146 149 440 463 Other customers 225 252 721 740 Total Conifer 371 401 1,161 1,203 Inter-segment eliminations (146 ) (149 ) (440 ) (463 ) Total $ 4,489 $ 4,586 $ 13,694 $ 14,201 Equity in earnings of unconsolidated affiliates: Hospital Operations and other $ 2 $ 4 $ 6 $ 4 Ambulatory Care 31 34 91 91 Total $ 33 $ 38 $ 97 $ 95 Adjusted EBITDA (2) : Hospital Operations and other (2) $ 312 $ 269 $ 1,059 $ 924 Ambulatory Care 184 159 547 476 Conifer 81 79 270 204 Total $ 577 $ 507 $ 1,876 $ 1,604 Depreciation and amortization: Hospital Operations and other $ 175 $ 185 $ 514 $ 560 Ambulatory Care 17 22 51 66 Conifer 12 12 37 36 Total $ 204 $ 219 $ 602 $ 662 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted EBITDA (2) $ 577 $ 507 $ 1,876 $ 1,604 Income (loss) from divested and closed businesses 9 (6 ) 9 (41 ) Depreciation and amortization (204 ) (219 ) (602 ) (662 ) Impairment and restructuring charges, and acquisition-related costs (46 ) (329 ) (123 ) (403 ) Litigation and investigation costs (9 ) (6 ) (28 ) (12 ) Interest expense (249 ) (257 ) (758 ) (775 ) Loss from early extinguishment of debt — (138 ) (2 ) (164 ) Other non-operating expense, net — (4 ) (2 ) (14 ) Net gains on sales, consolidation and deconsolidation of facilities (7 ) 104 111 142 Income (loss) from continuing operations, before income taxes $ 71 $ (348 ) $ 481 $ (325 ) (1) Hospital Operations and other revenues includes health plan revenues of $8 million and $14 million for the three and nine months ended September 30, 2018 , respectively, and $10 million and $100 million for the three and nine months ended September 30, 2017 , respectively. (2) Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of $9 million for both of the three and nine month periods ended September 30, 2018 , and $(6) million and $(41) million for the three and nine months ended September 30, 2017 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | 9 Months Ended |
Sep. 30, 2018center | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of outpatient centers | 475 |
BASIS OF PRESENTATION - ASU Ado
BASIS OF PRESENTATION - ASU Adoption (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Net operating revenues | $ 4,489 | $ 4,586 | $ 13,694 | $ 14,201 | ||||
Provision for doubtful accounts | $ 355 | 0 | $ 1,109 | |||||
Reclassification of accounts receivable, less allowance for doubtful accounts | $ (2,484) | (2,484) | $ (2,616) | |||||
Cumulative effect of accounting change | $ 0 | $ 56 | ||||||
AOCI | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Cumulative effect of accounting change | (43) | |||||||
Retained Earnings | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Cumulative effect of accounting change | $ 43 | $ 56 | ||||||
Accounting Standards Update 2018-02 | AOCI | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Cumulative effect of accounting change | $ (36) | |||||||
Accounting Standards Update 2018-02 | Retained Earnings | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Cumulative effect of accounting change | 36 | |||||||
Accounting Standards Update 2016-01 | Retained Earnings | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Cumulative effect of accounting change | 7 | |||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Net operating revenues | (1,052) | |||||||
Reclassification of accounts receivable, less allowance for doubtful accounts | 171 | |||||||
Contract assets | $ 171 | |||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Accounting Standards Update 2014-09 | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Provision for doubtful accounts | $ 1,053 |
BASIS OF PRESENTATION - Cash an
BASIS OF PRESENTATION - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash and Cash Equivalents | ||||
Cash and cash equivalents | $ 500 | $ 429 | $ 611 | $ 716 |
Accrued property and equipment purchases for items received but not yet paid | 86 | 117 | ||
Non-cancellable capital leases primarily for buildings and equipment | 94 | $ 82 | ||
Captive insurance subsidiaries | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | 165 | 179 | ||
Health plan-related businesses | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | 28 | 30 | ||
Accounts payable | ||||
Cash and Cash Equivalents | ||||
Book overdrafts classified as accounts payable | 235 | 311 | ||
Accrued property and equipment purchases for items received but not yet paid | $ 61 | $ 79 |
BASIS OF PRESENTATION - Intangi
BASIS OF PRESENTATION - Intangible Assets Summary (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Other intangible assets | ||
Gross Carrying Amount | $ 2,752 | $ 2,649 |
Accumulated Amortization | (990) | (883) |
Net Book Value | 1,762 | 1,766 |
Capitalized software costs | ||
Other intangible assets | ||
Gross Carrying Amount | 1,680 | 1,582 |
Accumulated Amortization | (842) | (754) |
Net Book Value | 838 | 828 |
Trade names | ||
Other intangible assets | ||
Gross Carrying Amount | 102 | 102 |
Accumulated Amortization | 0 | 0 |
Net Book Value | 102 | 102 |
Contracts | ||
Other intangible assets | ||
Gross Carrying Amount | 865 | 859 |
Accumulated Amortization | (72) | (60) |
Net Book Value | 793 | 799 |
Other | ||
Other intangible assets | ||
Gross Carrying Amount | 105 | 106 |
Accumulated Amortization | (76) | (69) |
Net Book Value | $ 29 | $ 37 |
BASIS OF PRESENTATION - Amortiz
BASIS OF PRESENTATION - Amortization of Intangible Assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Estimated future amortization of intangibles with finite useful lives | ||
Total | $ 1,090 | |
2,018 | 41 | |
2,019 | 152 | |
2,020 | 127 | |
2,021 | 108 | |
2,022 | 97 | |
Later Years | 565 | |
Amortization expense | $ 134 | $ 125 |
BASIS OF PRESENTATION - Investm
BASIS OF PRESENTATION - Investments in Unconsolidated Affiliates (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)hospitalcenter | Sep. 30, 2017USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Number of outpatient centers | center | 475 | |||
Gain on sale of equity investments | $ | $ 13 | |||
Investee results reflected | 1 | |||
Net operating revenues | $ | $ 546 | $ 635 | $ 1,667 | $ 1,819 |
Net income | $ | 126 | 143 | 374 | 376 |
Net income available to the investees | $ | $ 80 | $ 93 | $ 240 | $ 242 |
Ambulatory Care | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of outpatient centers recorded not using equity method | hospital | 228 | |||
Number of outpatient centers recorded using equity method | hospital | 107 | |||
Number of outpatient centers | hospital | 335 | |||
Hospital Operations and other | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of hospitals recorded using equity method | hospital | 4 |
ACCOUNTS RECEIVABLE - Component
ACCOUNTS RECEIVABLE - Components (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts receivable and allowance for doubtful accounts | ||
Accounts receivable | $ 2,484 | $ 2,616 |
Continuing operations | ||
Accounts receivable and allowance for doubtful accounts | ||
Patient accounts receivable | 2,336 | 3,376 |
Allowance for doubtful accounts | 0 | (898) |
Estimated future recoveries | 139 | 132 |
Net cost reports and settlements payable and valuation allowances | 7 | 4 |
Accounts receivable | 2,482 | 2,614 |
Discontinued operations | ||
Accounts receivable and allowance for doubtful accounts | ||
Accounts receivable | $ 2 | $ 2 |
ACCOUNTS RECEIVABLE - Allowance
ACCOUNTS RECEIVABLE - Allowance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accounts Receivable Additional Disclosures [Abstract] | |||||
Allowance for doubtful accounts as a percent of patients accounts receivable | 26.60% | ||||
Accounts receivable and allowance for doubtful accounts | |||||
Estimated costs of caring | $ 200 | $ 193 | $ 568 | $ 576 | |
Self-pay patients | |||||
Accounts receivable and allowance for doubtful accounts | |||||
Estimated costs of caring | 172 | 164 | 477 | 484 | |
Charity care patients | |||||
Accounts receivable and allowance for doubtful accounts | |||||
Estimated costs of caring | 28 | 29 | 91 | 92 | |
Medicaid DSH and other supplemental revenues | |||||
Accounts receivable and allowance for doubtful accounts | |||||
Estimated costs of caring | $ 233 | $ 140 | $ 651 | $ 462 |
ACCOUNTS RECEIVABLE - Other Rec
ACCOUNTS RECEIVABLE - Other Receivables (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts receivable and allowance for doubtful accounts | ||
Receivables | $ 2,484 | $ 2,616 |
Payables | 1,065 | 1,175 |
California's Provider Fee Program | Other current assets | ||
Accounts receivable and allowance for doubtful accounts | ||
Receivables | 147 | 312 |
California's Provider Fee Program | Other assets | ||
Accounts receivable and allowance for doubtful accounts | ||
Receivables | 318 | 266 |
California's Provider Fee Program | Other current liabilities | ||
Accounts receivable and allowance for doubtful accounts | ||
Payables | 61 | 159 |
California's Provider Fee Program | Other long-term liabilities | ||
Accounts receivable and allowance for doubtful accounts | ||
Payables | $ 68 | $ 49 |
CONTRACT BALANCES - Hospital Op
CONTRACT BALANCES - Hospital Operations and Other Segment (Details) - Hospital Operations and other - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Receivables | ||
Balance at beginning of period | $ 171 | $ 0 |
Increase/(decrease) | (19) | 0 |
Balance at end of period | $ 152 | $ 0 |
Contract assets, percentage to be reclassified to receivable within 90 days | 89.00% |
CONTRACT BALANCES - Conifer Seg
CONTRACT BALANCES - Conifer Segment (Details) - Conifer - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Receivables | ||
Balance at beginning of period | $ 89 | $ 67 |
Increase/(decrease) | 0 | 35 |
Balance at end of period | 89 | 102 |
Contract Asset-Unbilled Revenue | ||
Balance at beginning of period | 10 | 8 |
Increase/(decrease) | 1 | (2) |
Balance at end of period | 11 | 6 |
Contract Liability-Current Deferred Revenue | ||
Balance at beginning of period | 80 | 76 |
Increase/(decrease) | (6) | 3 |
Balance at end of period | 74 | 79 |
Contract Liability-Long-term Deferred Revenue | ||
Balance at beginning of period | 21 | 26 |
Increase/(decrease) | 0 | (4) |
Balance at end of period | 21 | 22 |
Amount of revenue recognized included in current deferred revenue liability | $ 68 | $ 72 |
CONTRACT BALANCES - Contract Co
CONTRACT BALANCES - Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | |||||
Amortization expense | $ 3 | $ 3 | $ 9 | $ 7 | |
Unamortized customer contract costs | $ 31 | $ 31 | $ 35 |
ASSETS AND LIABILITIES HELD F_3
ASSETS AND LIABILITIES HELD FOR SALE (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018USD ($)hospital | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)hospital | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Current Assets and Liabilities Held for Sale | |||||||
Impairment charges | $ 3 | ||||||
Chicago Facilities | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Number of hospitals | hospital | 3 | ||||||
Assets held for sale | $ 117 | $ 117 | |||||
Liabilities held for sale | 55 | 55 | |||||
Impairment charges | 17 | $ 17 | $ 73 | ||||
Chicago Facilities | Discontinued Operations, Held-for-sale | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Impairment charges | 17 | ||||||
California Facilities | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Assets held for sale | 11 | 11 | |||||
Liabilities held for sale | $ 16 | 16 | |||||
United Kingdom Facilities | Discontinued Operations, Disposed of by Sale | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Number of hospitals | hospital | 9 | ||||||
Impairment charges | $ 5 | $ 4 | $ 59 | ||||
Net cash proceeds from divestiture of businesses | 15 | ||||||
Saint Louis University Hospital | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Net cash proceeds from divestiture of businesses | 54 | ||||||
Gain on sale of business | $ 12 | ||||||
MacNeal Hospital | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Net cash proceeds from divestiture of businesses | 249 | ||||||
Gain on sale of business | 88 | ||||||
Abrazo Maryvale Hospital | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Net cash proceeds from divestiture of businesses | $ 7 | ||||||
Philadelphia Facilities | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Net cash proceeds from divestiture of businesses | 152.5 | ||||||
Notes issued | $ 17.5 | ||||||
Philadelphia Facilities | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Impairment charges | 235 | $ 235 | |||||
Philadelphia Facilities | Discontinued Operations, Held-for-sale | |||||||
Current Assets and Liabilities Held for Sale | |||||||
Impairment charges | $ 235 |
ASSETS AND LIABILITIES HELD F_4
ASSETS AND LIABILITIES HELD FOR SALE - Net Assets Held For Sale (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current liabilities | $ (71) | $ (480) |
Hospital Operations and other | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts receivable | 56 | |
Other current assets | 18 | |
Investments and other long-term assets | 2 | |
Property and equipment | 45 | |
Goodwill | 7 | |
Current liabilities | (64) | |
Long-term liabilities | (7) | |
Net assets held for sale | $ 57 |
ASSETS AND LIABILITIES HELD F_5
ASSETS AND LIABILITIES HELD FOR SALE - Significant Disposals (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Impairment charges | $ 3 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from continuing operations, before income taxes | $ (12) | $ (183) | $ 74 | (155) | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from continuing operations, before income taxes | (10) | (2) | (25) | (5) | ||
Houston | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from continuing operations, before income taxes | 0 | 108 | 0 | 136 | ||
Gain on sale | 111 | 111 | ||||
Philadelphia | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from continuing operations, before income taxes | 1 | (233) | (10) | (245) | ||
Impairment charges | 235 | 235 | ||||
MacNeal | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from continuing operations, before income taxes | (7) | 5 | 90 | 23 | ||
Gain on sale | 88 | 88 | ||||
Aspen | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from continuing operations, before income taxes | (6) | (63) | (6) | (69) | ||
Impairment charges | 59 | 59 | ||||
Chicago-area | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from continuing operations, before income taxes | (10) | $ (2) | $ (25) | $ (5) | ||
Impairment charges | $ 17 | $ 17 | $ 73 |
IMPAIRMENT AND RESTRUCTURING _2
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($)investment | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net impairment and restructuring charges and acquisition-related costs | $ 123 | $ 403 |
Impairment charges | 29 | 326 |
Restructuring charges | 82 | 61 |
Acquisition costs | 12 | 16 |
Charges to write-down assets held for sale to their estimated fair value | 3 | |
Other impairment charges | 3 | |
Employee severance costs | 47 | 40 |
Contract and lease termination costs | 10 | 8 |
Other restructuring costs | 25 | 13 |
Acquisition-related transaction costs | 8 | 5 |
Acquisition integration charges | $ 4 | 11 |
Equity method investment impairment | $ 29 | |
Number of impaired equity method investments | investment | 2 | |
Number of continuing operating segments | segment | 3 | |
Hospital Operations and other | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net impairment and restructuring charges and acquisition-related costs | $ 81 | $ 319 |
Ambulatory Care | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net impairment and restructuring charges and acquisition-related costs | 20 | 70 |
Conifer | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net impairment and restructuring charges and acquisition-related costs | 22 | 14 |
Discontinued Operations, Held-for-sale | Chicago Facilities | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Charges to write-down assets held for sale to their estimated fair value | 17 | |
Discontinued Operations, Held-for-sale | Aspen Facilities | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Charges to write-down assets held for sale to their estimated fair value | $ 9 | |
Discontinued Operations, Held-for-sale | Aspen and Philadelphia Facilities | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Charges to write-down assets held for sale to their estimated fair value | $ 294 |
LONG-TERM DEBT AND LEASE OBLI_3
LONG-TERM DEBT AND LEASE OBLIGATIONS - Schedule of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Aug. 31, 2018 | May 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Capital leases | $ 424 | $ 431 | |||
Mortgage notes | 78 | 77 | |||
Unamortized issue costs, note discounts and premiums | (194) | (231) | |||
Total long-term debt | 14,850 | 14,937 | |||
Less current portion | 672 | 146 | |||
Long-term debt, net of current portion | $ 14,178 | 14,791 | |||
Senior Notes | 5.500% due 2019 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 5.50% | ||||
Carrying amount | $ 500 | 500 | |||
Senior Notes | 6.750% due 2020 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 6.75% | ||||
Carrying amount | $ 300 | 300 | |||
Senior Notes | 8.125% due 2022 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 8.125% | ||||
Carrying amount | $ 2,800 | 2,800 | |||
Senior Notes | 6.750% due 2023 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 6.75% | 6.75% | |||
Carrying amount | $ 1,872 | 1,900 | |||
Senior Notes | 7.000% due 2025 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 7.00% | 7.00% | |||
Carrying amount | $ 478 | 500 | |||
Senior Notes | 6.875% due 2031 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 6.875% | 6.875% | 6.875% | ||
Carrying amount | $ 362 | 430 | |||
Senior Notes | 4.750% due 2020 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 4.75% | ||||
Carrying amount | $ 500 | 500 | |||
Senior Notes | 6.000% due 2020 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 6.00% | ||||
Carrying amount | $ 1,800 | 1,800 | |||
Senior Notes | 4.500% due 2021 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 4.50% | ||||
Carrying amount | $ 850 | 850 | |||
Senior Notes | 4.375% due 2021 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 4.375% | ||||
Carrying amount | $ 1,050 | 1,050 | |||
Senior Notes | 4.625% due 2024 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 4.625% | ||||
Carrying amount | $ 1,870 | 1,870 | |||
Senior Notes | 7.500% due 2022 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 7.50% | ||||
Carrying amount | $ 750 | 750 | |||
Senior Notes | 5.125% due 2025 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Interest rate, stated percentage | 5.125% | ||||
Carrying amount | $ 1,410 | $ 1,410 |
LONG-TERM DEBT AND LEASE OBLI_4
LONG-TERM DEBT AND LEASE OBLIGATIONS - Senior Secured and Senior Secured Notes (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Aug. 31, 2018 | May 31, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||
Loss from early extinguishment of debt | $ 0 | $ 1 | $ 138 | $ 2 | $ 164 | ||||
Senior Notes | |||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||
Repurchase of debt | $ 51 | ||||||||
Repurchase of debt, accrued and unpaid interest | 1 | ||||||||
Senior Notes | 6.875% due 2031 | |||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||
Repurchased face amount | $ 38 | $ 30 | |||||||
Interest rate, stated percentage | 6.875% | 6.875% | 6.875% | 6.875% | |||||
Repurchase of debt | $ 36 | $ 28 | |||||||
Loss from early extinguishment of debt | $ 1 | ||||||||
Repurchase of debt, accrued and unpaid interest | $ 1 | ||||||||
Senior Notes | 6.750% due 2023 | |||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||
Repurchased face amount | $ 28 | $ 28 | |||||||
Interest rate, stated percentage | 6.75% | 6.75% | 6.75% | 6.75% | |||||
Senior Notes | 7.000% due 2025 | |||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||
Repurchased face amount | $ 22 | $ 22 | |||||||
Interest rate, stated percentage | 7.00% | 7.00% | 7.00% | 7.00% |
LONG-TERM DEBT AND LEASE OBLI_5
LONG-TERM DEBT AND LEASE OBLIGATIONS - Credit Agreement and Letter of Credit Facility (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Credit Agreement | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Revolving credit facility, maximum borrowing capacity (up to) | $ 1,000,000,000 |
Line of credit facility, subfacility maximum available capacity | 300,000,000 |
Borrowings outstanding | 0 |
Standby letters of credit outstanding | 2,000,000 |
Amount available for borrowing under revolving credit facility | $ 998,000,000 |
Credit Agreement | Minimum | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Unused commitment fee | 0.25% |
Credit Agreement | Maximum | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Unused commitment fee | 0.375% |
Credit Agreement | Base rate | Minimum | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Margin on variable rate | 0.25% |
Credit Agreement | Base rate | Maximum | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Margin on variable rate | 0.75% |
Credit Agreement | LIBOR | Minimum | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Margin on variable rate | 1.25% |
Credit Agreement | LIBOR | Maximum | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Margin on variable rate | 1.75% |
Letter of Credit Facility | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Revolving credit facility, maximum borrowing capacity (up to) | $ 180,000,000 |
Unused commitment fee | 0.25% |
Standby letters of credit outstanding | $ 96,000,000 |
Borrowing capacity after increase subject to certain conditions (up to) | $ 200,000,000 |
Secured debt to EBITDA ratio | 3 |
Issuance fee | 1.50% |
Issuance fee, based on face amount | 0.125% |
Letter of Credit Facility | Maximum | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Number of business days after notice, for reimbursement of amount drawn | 3 days |
Unused commitment fee after step down (up to) | 0.375% |
Letter of Credit Facility | Base rate | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |
Margin on variable rate | 0.50% |
GUARANTEES (Details)
GUARANTEES (Details) $ in Millions | Sep. 30, 2018USD ($) |
Income and Revenue Collection Guarantee | |
GUARANTEES | |
Maximum potential amount of future payments under guarantees | $ 186 |
Income and Revenue Collection Guarantee | Other current liabilities | |
GUARANTEES | |
Liability for the fair value of guarantees | 138 |
Guaranteed Investees Of Third Parties | |
GUARANTEES | |
Liability for the fair value of guarantees | 27 |
Guaranteed Investees Of Third Parties | Other current liabilities | |
GUARANTEES | |
Guarantee obligations for consolidated subsidiaries | $ 18 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
EMPLOYEE BENEFIT PLANS | ||
Shares available for issuance under the plan (in shares) | 5,200,000 | |
Shares available assuming maximum performance (in shares) | 4,100,000 | |
Stock-based compensation costs, pretax | $ 34 | $ 44 |
Stock Options | ||
EMPLOYEE BENEFIT PLANS | ||
Expiration period from the date of grant | 10 years | |
Portion of awards vesting on each of the first three anniversary dates of the grant | 33.33% | |
Vesting period | 3 years | |
Restricted Stock Units | ||
EMPLOYEE BENEFIT PLANS | ||
Contractual right to receive shares of common stock for a stock based award (in shares) | 1 | |
Portion of awards vesting on each of the first three anniversary dates of the grant | 33.33% | |
Vesting period | 3 years |
EMPLOYEE BENEFIT PLANS - Stock
EMPLOYEE BENEFIT PLANS - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | May 31, 2018 | Feb. 28, 2018 | Sep. 29, 2017 | Mar. 01, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Weighted Average Remaining Life | |||||||||||
Weighted average estimated fair value of awards granted (in dollars per share) | $ 9.16 | $ 7.68 | |||||||||
Stock Options | |||||||||||
Options | |||||||||||
Outstanding at the beginning of the period (in shares) | 2,564,822 | 2,564,822 | |||||||||
Granted (in shares) | 635,196 | ||||||||||
Exercised (in shares) | (612,074) | (16,525) | |||||||||
Forfeited/Expired (in shares) | (299,581) | ||||||||||
Outstanding at the end of the period (in shares) | 2,288,363 | 2,288,363 | |||||||||
Vested and expected to vest at the end of the period (in shares) | 2,288,363 | 2,288,363 | |||||||||
Exercisable at the end of the period (in shares) | 774,812 | 774,812 | |||||||||
Weighted Average Exercise Price Per Share | |||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ 20.35 | $ 20.35 | |||||||||
Granted (in dollars per share) | 21.33 | ||||||||||
Exercised (in dollars per share) | 18.36 | ||||||||||
Forfeited/Expired (in dollars per share) | 36.21 | ||||||||||
Outstanding at the end of the period (in dollars per share) | $ 19.08 | 19.08 | |||||||||
Vested and expected to vest at the end of the period (in dollars per share) | 19.08 | 19.08 | |||||||||
Exercisable at the end of the period (in dollars per share) | $ 17.34 | $ 17.34 | |||||||||
Aggregate Intrinsic Value | |||||||||||
Outstanding at the end of the period | $ 22 | $ 22 | |||||||||
Vested and expected to vest at the end of the period | 22 | 22 | |||||||||
Exercisable at the end of the period | 9 | $ 9 | |||||||||
Weighted Average Remaining Life | |||||||||||
Outstanding at the end of the period | 7 years | ||||||||||
Vested and expected to vest at the end of the period | 7 years | ||||||||||
Exercisable at the end of the period | 3 years 4 months 24 days | ||||||||||
Aggregate Intrinsic value of awards exercised (less than $1 million - 2017) | $ 4 | $ 1 | |||||||||
Unrecognized compensation costs | $ 7 | $ 7 | |||||||||
Period for recognition of unrecognized compensation costs | 2 years 1 month 6 days | ||||||||||
Assumptions used to calculate fair value of awards granted to top eleven employees | |||||||||||
Expected volatility | 46.00% | 49.00% | 46.00% | ||||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | ||||||||
Expected life | 3 years | 6 years 2 months 12 days | 6 years 2 months 12 days | ||||||||
Expected forfeiture rate | 0.00% | 0.00% | 0.00% | ||||||||
Risk-free interest rate | 1.92% | 2.15% | 2.72% | ||||||||
Performance-based Stock Options | Senior Officers | |||||||||||
Options | |||||||||||
Granted (in shares) | 31,184 | 408,526 | 987,781 | ||||||||
Weighted Average Remaining Life | |||||||||||
Target closing stock price (in dollars per share) | $ 44.29 | ||||||||||
Stock price premium | 25.00% | ||||||||||
Share price (in dollars per share) | $ 35.43 | ||||||||||
Number of consecutive trading days (at least) | 30 days | 20 days | |||||||||
Non-Performance Employee Stock Option | Senior Officers | |||||||||||
Options | |||||||||||
Granted (in shares) | 604,012 | ||||||||||
Weighted Average Remaining Life | |||||||||||
Target closing stock price (in dollars per share) | $ 25.75 | $ 20.53 | $ 23.74 | ||||||||
Stock price premium | 25.00% | 25.00% | 25.00% | ||||||||
Share price (in dollars per share) | $ 20.60 | $ 16.43 | $ 18.99 | ||||||||
Number of consecutive trading days (at least) | 20 days | ||||||||||
Vesting date of grant anniversary subject to specific conditions | 4 years | 3 years |
EMPLOYEE BENEFIT PLANS - Range
EMPLOYEE BENEFIT PLANS - Range of Exercise Prices (Details) - Stock Options | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 2,288,363 |
Weighted Average Remaining Contractual Life | 7 years |
Weighted Average Exercise Price (in dollars per share) | $ 19.08 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 774,812 |
Weighted Average Exercise Price (in dollars per share) | $ 17.34 |
$0.00 to $4.569 | |
Summary information about outstanding stock options | |
Exercise price per share, low end of the range (in dollars per share) | 0 |
Exercise price per share, high end of the range (in dollars per share) | $ 4.569 |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 90,184 |
Weighted Average Remaining Contractual Life | 4 months 24 days |
Weighted Average Exercise Price (in dollars per share) | $ 4.56 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 90,184 |
Weighted Average Exercise Price (in dollars per share) | $ 4.56 |
$4.57 to $19.759 | |
Summary information about outstanding stock options | |
Exercise price per share, low end of the range (in dollars per share) | 4.57 |
Exercise price per share, high end of the range (in dollars per share) | $ 19.759 |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 1,292,315 |
Weighted Average Remaining Contractual Life | 7 years |
Weighted Average Exercise Price (in dollars per share) | $ 18.18 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 413,960 |
Weighted Average Exercise Price (in dollars per share) | $ 16.46 |
$19.76 to $35.430 | |
Summary information about outstanding stock options | |
Exercise price per share, low end of the range (in dollars per share) | 19.76 |
Exercise price per share, high end of the range (in dollars per share) | $ 35.430 |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 905,864 |
Weighted Average Remaining Contractual Life | 7 years 8 months 12 days |
Weighted Average Exercise Price (in dollars per share) | $ 21.81 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 270,668 |
Weighted Average Exercise Price (in dollars per share) | $ 22.94 |
EMPLOYEE BENEFIT PLANS - Restri
EMPLOYEE BENEFIT PLANS - Restricted Stock Units (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended |
May 31, 2018directorshares | Sep. 30, 2018USD ($)$ / sharesshares | |
Weighted Average Grant Date Fair Value Per Unit | ||
Number of newly appointed directors | director | 2 | |
Restricted Stock Units | ||
Restricted Stock Units | ||
Unvested at the beginning of the period (in shares) | 2,253,988 | |
Granted (in shares) | 12,154 | 734,091 |
Vested (in shares) | (872,062) | |
Forfeited (in shares) | (128,074) | |
Unvested at the end of the period (in shares) | 1,987,943 | |
Weighted Average Grant Date Fair Value Per Unit | ||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 35.20 | |
Granted (in dollars per share) | $ / shares | 24.70 | |
Vested (in dollars per share) | $ / shares | 34.03 | |
Forfeited (in dollars per share) | $ / shares | 36.24 | |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 31.77 | |
Vesting period | 3 years | |
Percentage of restricted stock units, which will vest three years from the grant date | 33.33% | |
Unrecognized compensation costs | $ | $ 22 | |
Period for recognition of unrecognized compensation costs | 1 year 7 months 6 days | |
Restricted Stock Units | Non-Employee Director | ||
Restricted Stock Units | ||
Granted (in shares) | 54,198 | |
Restricted Stock Units | Director | ||
Restricted Stock Units | ||
Granted (in shares) | 3,670 | |
Restricted Stock Units | Vesting and settled ratably over a three-year period from the grant date | ||
Restricted Stock Units | ||
Granted (in shares) | 288,325 | |
Weighted Average Grant Date Fair Value Per Unit | ||
Vesting period | 3 years | |
Restricted Stock Units | Vesting and settled ratably over a two-year period from the grant date | ||
Restricted Stock Units | ||
Granted (in shares) | 339,806 | |
Weighted Average Grant Date Fair Value Per Unit | ||
Vesting period | 2 years | |
Restricted Stock Units | Vesting and settled on the third anniversary of the grant date | ||
Restricted Stock Units | ||
Granted (in shares) | 29,870 | |
Restricted Stock Units | Performance-based vesting | ||
Restricted Stock Units | ||
Granted (in shares) | 6,068 | |
Restricted Stock Units | Performance-based vesting | Minimum | ||
Weighted Average Grant Date Fair Value Per Unit | ||
Percentage of restricted stock units, which will vest three years from the grant date | 0.00% | |
Restricted Stock Units | Performance-based vesting | Maximum | ||
Weighted Average Grant Date Fair Value Per Unit | ||
Percentage of restricted stock units, which will vest three years from the grant date | 200.00% |
EMPLOYEE BENEFIT PLANS - Employ
EMPLOYEE BENEFIT PLANS - Employee Retirement Plans (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2018USD ($)plan | Sep. 30, 2017USD ($)plan | |
Defined Benefit Plan [Abstract] | ||
Number of frozen plans | plan | 1 | 1 |
Salaries, wages and benefits expense | ||
Employee Retirement Plans | ||
Service costs | $ 2 | $ 1 |
Other non-operating income (expense), net | ||
Employee Retirement Plans | ||
Other components | $ 12 | $ 20 |
EQUITY - Changes in Shareholder
EQUITY - Changes in Shareholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | $ 576 | $ 616 | $ 539 | $ 1,055 | $ 1,094 | $ 1,082 | $ 539 | $ 1,082 |
Net income (loss) | 31 | 68 | 130 | (339) | (20) | (17) | ||
Distributions paid to noncontrolling interests | (40) | (38) | (34) | (28) | (29) | (36) | ||
Other comprehensive income (loss) | 41 | (4) | 8 | 4 | 13 | 3 | 45 | 20 |
Accretion of redeemable noncontrolling interests | (6) | (123) | (37) | (3) | (29) | |||
Purchases (sales) of businesses and noncontrolling interests | 39 | 43 | (6) | (11) | 4 | 3 | ||
Cumulative effect of accounting change | 0 | 56 | ||||||
Stock-based compensation expense, tax benefit and issuance of common stock | 17 | 14 | 16 | 17 | 22 | 3 | ||
Balances, end of period | $ 658 | $ 576 | $ 616 | $ 695 | $ 1,055 | $ 1,094 | $ 658 | $ 695 |
Common Stock | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period (in shares) | 102,301 | 101,989 | 100,972 | 100,710 | 100,421 | 99,686 | 100,972 | 99,686 |
Balances, beginning of period | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 |
Stock-based compensation expense, tax benefit and issuance of common stock (in shares) | 146 | 312 | 1,017 | 121 | 289 | 735 | ||
Balances, end of period (in shares) | 102,447 | 102,301 | 101,989 | 100,831 | 100,710 | 100,421 | 102,447 | 100,831 |
Balances, end of period | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 |
Additional Paid-In Capital | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | 4,722 | 4,833 | 4,859 | 4,819 | 4,834 | 4,827 | 4,859 | 4,827 |
Accretion of redeemable noncontrolling interests | (6) | (123) | (37) | (3) | (29) | |||
Purchases (sales) of businesses and noncontrolling interests | 3 | (2) | (4) | 0 | (8) | 4 | ||
Stock-based compensation expense, tax benefit and issuance of common stock | 14 | 14 | 15 | 19 | 22 | 3 | ||
Balances, end of period | 4,733 | 4,722 | 4,833 | 4,835 | 4,819 | 4,834 | 4,733 | 4,835 |
Accumulated Other Comprehensive Loss | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (243) | (239) | (204) | (242) | (255) | (258) | (204) | (258) |
Other comprehensive income (loss) | 41 | (4) | 8 | 4 | 13 | 3 | ||
Cumulative effect of accounting change | (43) | |||||||
Balances, end of period | (202) | (243) | (239) | (238) | (242) | (255) | (202) | (238) |
Accumulated Deficit | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (2,222) | (2,248) | (2,390) | (1,794) | (1,739) | (1,742) | (2,390) | (1,742) |
Net income (loss) | (9) | 26 | 99 | (367) | (55) | (53) | ||
Cumulative effect of accounting change | 43 | 56 | ||||||
Balances, end of period | (2,231) | (2,222) | (2,248) | (2,161) | (1,794) | (1,739) | (2,231) | (2,161) |
Treasury Stock | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (2,418) | (2,418) | (2,419) | (2,417) | (2,417) | (2,417) | (2,419) | (2,417) |
Stock-based compensation expense, tax benefit and issuance of common stock | 3 | 0 | 1 | (2) | 0 | 0 | ||
Balances, end of period | (2,415) | (2,418) | (2,418) | (2,419) | (2,417) | (2,417) | (2,415) | (2,419) |
Noncontrolling Interests | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | 730 | 681 | 686 | 682 | 664 | 665 | 686 | 665 |
Net income (loss) | 40 | 42 | 31 | 28 | 35 | 36 | ||
Distributions paid to noncontrolling interests | (40) | (38) | (34) | (28) | (29) | (36) | ||
Purchases (sales) of businesses and noncontrolling interests | 36 | 45 | (2) | (11) | 12 | (1) | ||
Balances, end of period | $ 766 | $ 730 | $ 681 | $ 671 | $ 682 | $ 664 | $ 766 | $ 671 |
EQUITY - Changes in Sharehold_2
EQUITY - Changes in Shareholders' Equity - Noncontrolling interests (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stockholders equity balance | $ 658 | $ 576 | $ 616 | $ 695 | $ 1,055 | $ 1,094 | $ 658 | $ 695 | $ 539 | $ 1,082 |
Net income | 31 | 68 | 130 | (339) | (20) | (17) | ||||
Noncontrolling Interests | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stockholders equity balance | 766 | 730 | 681 | 671 | 682 | 664 | 766 | 671 | 686 | $ 665 |
Net income | 40 | $ 42 | $ 31 | $ 28 | $ 35 | $ 36 | ||||
Noncontrolling Interests | Hospital Operations and other | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stockholders equity balance | 67 | 67 | 64 | |||||||
Net income | 6 | 9 | ||||||||
Noncontrolling Interests | Ambulatory Care | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stockholders equity balance | $ 699 | 699 | $ 622 | |||||||
Net income | $ 107 | $ 90 |
NET OPERATING REVENUES (Details
NET OPERATING REVENUES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,489 | $ 4,586 | $ 13,694 | $ 14,201 |
Restatement Adjustment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 11 | 36 | ||
Hospital Operations and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 502 | 468 | 1,531 | 1,395 |
Hospital Operations and other | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 9 | 11 | 23 | 23 |
Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 371 | 401 | 1,161 | 1,203 |
Operating segments | Hospital Operations and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 3,762 | 3,866 | 11,442 | 12,066 |
Operating segments | Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 502 | 468 | 1,531 | 1,395 |
Operating segments | Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 371 | 401 | 1,161 | 1,203 |
Inter-segment eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | (146) | (149) | (440) | (463) |
Continuing operations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 4,489 | 4,586 | 13,694 | 14,201 |
Continuing operations | Operating segments | Hospital Operations and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 3,762 | 3,866 | 11,442 | 12,066 |
Continuing operations | Operating segments | Hospital Operations and other | Physician practices revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 280 | 270 | 825 | 810 |
Continuing operations | Operating segments | Hospital Operations and other | Health plans | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 8 | 10 | 14 | 100 |
Continuing operations | Operating segments | Hospital Operations and other | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 40 | 64 | 83 | 187 |
Continuing operations | Operating segments | Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 502 | 468 | 1,531 | 1,395 |
Continuing operations | Operating segments | Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 371 | 401 | 1,161 | 1,203 |
Continuing operations | Inter-segment eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | (146) | (149) | (440) | (463) |
Acute Care Hospitals and Related Outpatient Facilities | Continuing operations | Operating segments | Hospital Operations and other | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 681 | 773 | 2,164 | 2,455 |
Acute Care Hospitals and Related Outpatient Facilities | Continuing operations | Operating segments | Hospital Operations and other | Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 336 | 252 | 971 | 806 |
Acute Care Hospitals and Related Outpatient Facilities | Continuing operations | Operating segments | Hospital Operations and other | Managed care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 2,228 | 2,327 | 6,869 | 7,211 |
Acute Care Hospitals and Related Outpatient Facilities | Continuing operations | Operating segments | Hospital Operations and other | Self-pay | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 33 | 9 | 78 | 40 |
Acute Care Hospitals and Related Outpatient Facilities | Continuing operations | Operating segments | Hospital Operations and other | Indemnity and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 156 | 161 | 438 | 457 |
Acute Care Hospitals and Related Outpatient Facilities | Continuing operations | Operating segments | Hospital Operations and other | Patient service revenue, excluding physician practices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 3,434 | $ 3,522 | $ 10,520 | $ 10,969 |
NET OPERATING REVENUES - Ambula
NET OPERATING REVENUES - Ambulatory Care (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,489 | $ 4,586 | $ 13,694 | $ 14,201 |
Hospital Operations and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 502 | 468 | 1,531 | 1,395 |
Hospital Operations and other | Net patient service revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 471 | 434 | 1,440 | 1,305 |
Hospital Operations and other | Management fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 22 | 23 | 68 | 67 |
Hospital Operations and other | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 9 | $ 11 | $ 23 | $ 23 |
NET OPERATING REVENUES - Conife
NET OPERATING REVENUES - Conifer (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,489 | $ 4,586 | $ 13,694 | $ 14,201 |
Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 371 | 401 | 1,161 | 1,203 |
Conifer | Revenue cycle services | Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 141 | 142 | 424 | 434 |
Conifer | Revenue cycle services | Non-Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 203 | 229 | 655 | 674 |
Conifer | Other services | Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 5 | 7 | 16 | 29 |
Conifer | Other services | Non-Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 22 | $ 23 | $ 66 | $ 66 |
Conifer | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues, percentage of total | 7.00% |
NET OPERATING REVENUES - Perfor
NET OPERATING REVENUES - Performance Obligations (Details) - Conifer $ in Millions | Sep. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 161 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | 653 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | 653 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | 604 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | 578 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | 5,383 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 8,032 |
PROPERTY AND PROFESSIONAL AND_2
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Property and Professional and General Liablity Insurance [Abstract] | |
Insurance coverage, aggregate limit | $ 850,000,000 |
Flood and Earthquake | |
Insurance coverage | |
Insurance, maximum coverage per incident | 100,000,000 |
Windstorms | |
Insurance coverage | |
Insurance, maximum coverage per incident | $ 200,000,000 |
Flood, earthquake and windstorm | |
Insurance coverage | |
Insurance deductible as a percent | 5.00% |
Flood, earthquake and windstorm | Maximum | |
Insurance coverage | |
Insurance deductible | $ 25,000,000 |
New Madrid fault earthquakes | |
Insurance coverage | |
Insurance deductible as a percent | 2.00% |
New Madrid fault earthquakes | Maximum | |
Insurance coverage | |
Insurance deductible | $ 25,000,000 |
Fire and other perils | Minimum | |
Insurance coverage | |
Insurance deductible | $ 1,000,000 |
PROPERTY AND PROFESSIONAL AND_3
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE - Professional and General Liability Reserves (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Other operating expense, net | |||
Insurance coverage | |||
Malpractice expense | $ 267 | $ 225 | |
Professional and General Liability Reserves | |||
Insurance coverage | |||
Self insurance reserve | $ 857 | $ 854 | |
Loss contingency discount rate, maturity rate period | 7 years | 7 years | |
Risk-free discount rate | 3.01% | 2.33% |
CLAIMS AND LAWSUITS (Details)
CLAIMS AND LAWSUITS (Details) | 1 Months Ended | |
Jun. 30, 2006system | Jan. 31, 2017lawsuit | |
Shareholder Derivative Litigation | ||
Loss Contingencies | ||
Consolidated lawsuits | lawsuit | 2 | |
Antitrust Class Action Lawsuit | ||
Loss Contingencies | ||
Number of hospital systems alleging violation | system | 3 |
CLAIMS AND LAWSUITS - Reconcili
CLAIMS AND LAWSUITS - Reconciliations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Loss Contingency Accrual [Roll Forward] | ||||
Litigation and Investigation Costs | $ 9 | $ 6 | $ 28 | $ 12 |
Claims, lawsuits, and regulatory proceedings | ||||
Loss Contingency Accrual [Roll Forward] | ||||
Litigation reserve, balance at beginning of period | 12 | 12 | ||
Litigation and Investigation Costs | 28 | 12 | ||
Cash Payments | (24) | (14) | ||
Litigation reserve, balance at end of period | 16 | 10 | 16 | 10 |
Claims, lawsuits, and regulatory proceedings | Continuing operations | ||||
Loss Contingency Accrual [Roll Forward] | ||||
Litigation reserve, balance at beginning of period | 12 | 12 | ||
Litigation and Investigation Costs | 28 | 12 | ||
Cash Payments | (24) | (14) | ||
Litigation reserve, balance at end of period | 16 | 10 | 16 | 10 |
Claims, lawsuits, and regulatory proceedings | Discontinued operations | ||||
Loss Contingency Accrual [Roll Forward] | ||||
Litigation reserve, balance at beginning of period | 0 | 0 | ||
Litigation and Investigation Costs | 0 | 0 | ||
Cash Payments | 0 | 0 | ||
Litigation reserve, balance at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES - Ownership percentage (Details) - Redeemable noncontrolling interests - USD ($) $ in Millions | Jul. 03, 2017 | Apr. 30, 2018 | Apr. 30, 2016 | Sep. 30, 2018 |
United Surgical Partners International | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Payment made to purchase shares in joint venture | $ 716 | $ 127 | ||
Joint venture ownership | 80.00% | 56.30% | ||
Joint venture, ownership percentage acquired | 23.70% | |||
Welsh Carson | United Surgical Partners International | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Payment made to purchase shares in joint venture | $ 630 | |||
Joint venture, ownership percentage acquired | 15.00% | |||
Baylor University | United Surgical Partners International | Put Option | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Required equity necessary in joint venture | 5.00% |
REDEEMABLE NONCONTROLLING INT_4
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES - Changes in Redeemable Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ||||||||
Distributions paid to noncontrolling interests | $ (40) | $ (38) | $ (34) | $ (28) | $ (29) | $ (36) | ||
Redeemable noncontrolling interests | ||||||||
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ||||||||
Balances at beginning of period | $ 1,866 | $ 2,393 | $ 1,866 | $ 2,393 | ||||
Net income | 135 | 155 | ||||||
Distributions paid to noncontrolling interests | (107) | (85) | ||||||
Accretion of redeemable noncontrolling interests | 166 | 32 | ||||||
Purchases and sales of businesses and noncontrolling interests, net | (616) | (679) | ||||||
Balances at end of period | $ 1,444 | $ 1,816 | $ 1,444 | $ 1,816 |
REDEEMABLE NONCONTROLLING INT_5
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES - Segment Details (Details) - Redeemable noncontrolling interests - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | $ 1,444 | $ 1,816 | $ 1,866 | $ 2,393 |
Net income available to redeemable noncontrolling interests | 135 | 155 | ||
Hospital Operations and other | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 487 | 519 | ||
Net income available to redeemable noncontrolling interests | (17) | 14 | ||
Ambulatory Care | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 695 | 1,137 | ||
Net income available to redeemable noncontrolling interests | 102 | 103 | ||
Conifer | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 262 | $ 210 | ||
Net income available to redeemable noncontrolling interests | $ 50 | $ 38 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Taxes | |||||
Income tax expense (benefit) | $ 6 | $ (60) | $ 120 | $ (105) | |
Continued operations pre-tax earnings | 71 | (348) | 481 | (325) | |
Tax Cuts and Jobs Act, provisional income tax expense | $ 252 | ||||
Tax Cuts and Jobs Act, measurement period adjustment, income tax expense | 2 | ||||
Unrecognized tax benefits | 46 | 46 | |||
Unrecognized tax benefits which, if recognized, would impact effective tax rate | 44 | 44 | |||
Unrecognized federal and state tax benefits and reserves for interest and penalties, which may decrease in the next 12 months | 4 | 4 | |||
Continuing operations | |||||
Income Taxes | |||||
Income tax expense (benefit) | $ 6 | $ (60) | 120 | $ (105) | |
Interest and penalties related to accrued liabilities for uncertain tax positions, recognized | $ 4 |
INCOME TAXES - Federal Tax Reco
INCOME TAXES - Federal Tax Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation between reported income tax expense (benefit) and income taxes calculated by the statutory federal income tax rate | ||||
Tax expense at statutory federal rate of 21% (35% for 2017) | $ 15 | $ (122) | $ 101 | $ (114) |
State income taxes, net of federal income tax benefit | 3 | 8 | 20 | 13 |
Tax benefit available to noncontrolling interests | (15) | (25) | (49) | (79) |
Nondeductible goodwill | 0 | 104 | 7 | 104 |
Tax benefit related to loss on Aspen sale | (18) | 0 | (18) | 0 |
Change in tax contingency reserves, including interest | 0 | (1) | 0 | (3) |
Stock-based compensation | 0 | 0 | 4 | 9 |
Change in valuation allowance-interest expense limitation | 24 | 0 | 54 | 0 |
Change in indefinite reinvestment assertion | 0 | (30) | 0 | (30) |
Change in valuation allowance-other | 0 | (5) | 0 | (5) |
Other items | (3) | 11 | 1 | 0 |
Income tax expense (benefit) | $ 6 | $ (60) | $ 120 | $ (105) |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Income Available (Loss Attributable) to Common Shareholders (Numerator) | ||||
Net income (loss) available to Tenet Healthcare Corporation common shareholders for basic loss per share | $ (9) | $ (366) | $ 113 | $ (474) |
Effect of dilutive stock options, restricted stock units and deferred compensation units | 0 | 0 | 0 | 0 |
Net income (loss) available to Tenet Healthcare Corporation common shareholders for diluted loss per share | $ (9) | $ (366) | $ 113 | $ (474) |
Weighted Average Shares (Denominator) | ||||
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders for basic loss per share (in shares) | 102,402 | 100,812 | 101,980 | 100,475 |
Effect of dilutive stock options, restricted stock units and deferred compensation units (in shares) | 0 | 0 | 1,822 | 0 |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share (in shares) | 102,402 | 100,812 | 103,802 | 100,475 |
Per-Share Amount | ||||
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders for basic loss per share (in dollars per share) | $ (0.09) | $ (3.63) | $ 1.11 | $ (4.72) |
Effect of dilutive stock options, restricted stock units and deferred compensation units (in dollars per share) | 0 | 0 | (0.02) | 0 |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share (in dollars per share) | $ (0.09) | $ (3.63) | $ 1.09 | $ (4.72) |
EARNINGS (LOSS) PER COMMON SH_4
EARNINGS (LOSS) PER COMMON SHARE - Antidilutive securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | |
Employee stock options, restricted stock units and deferred compensation units | |||
Antidilutive securities | |||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 2,173 | 711 | 747 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair value of assets and liabilities measured on recurring basis | |||
Impairment charges | $ 29 | $ 326 | |
Charges to write-down assets held for sale to their estimated fair value | $ 3 | ||
Other impairment charges | 3 | ||
Chicago Facilities | Discontinued Operations, Held-for-sale | |||
Fair value of assets and liabilities measured on recurring basis | |||
Charges to write-down assets held for sale to their estimated fair value | 17 | ||
Aspen Facilities | Discontinued Operations, Held-for-sale | |||
Fair value of assets and liabilities measured on recurring basis | |||
Charges to write-down assets held for sale to their estimated fair value | 9 | ||
Nonrecurring | |||
Fair value of assets and liabilities measured on recurring basis | |||
Long-lived assets held for sale | 45 | $ 456 | |
Other than temporarily impaired equity method investments | 113 | ||
Non-financial assets | 45 | 569 | |
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of assets and liabilities measured on recurring basis | |||
Long-lived assets held for sale | 0 | 0 | |
Other than temporarily impaired equity method investments | 0 | ||
Non-financial assets | 0 | 0 | |
Nonrecurring | Significant Other Observable Inputs (Level 2) | |||
Fair value of assets and liabilities measured on recurring basis | |||
Long-lived assets held for sale | 45 | 456 | |
Other than temporarily impaired equity method investments | 113 | ||
Non-financial assets | 45 | 569 | |
Nonrecurring | Significant Unobservable Inputs (Level 3) | |||
Fair value of assets and liabilities measured on recurring basis | |||
Long-lived assets held for sale | 0 | 0 | |
Other than temporarily impaired equity method investments | 0 | ||
Non-financial assets | $ 0 | $ 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of assets and liabilities measured on recurring basis | |||
Estimated fair value of the long-term debt instrument as a percentage of carrying value | 100.90% | 100.20% |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Final purchase price allocations | |||
Goodwill | $ 7,313 | $ 7,018 | |
Series of individual business acquisitions | |||
Final purchase price allocations | |||
Current assets | 5 | $ 4 | |
Property and equipment | 12 | 5 | |
Other intangible assets | 7 | 5 | |
Goodwill | 211 | 65 | |
Other long-term assets | 1 | 1 | |
Previously held equity method investment | (19) | 0 | |
Current liabilities | 1 | (4) | |
Long-term liabilities | (16) | (1) | |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | (18) | (18) | |
Noncontrolling interests | (85) | (13) | |
Cash paid, net of cash acquired | (97) | (41) | |
Gains on consolidations | 2 | 3 | |
Transaction costs related to prospective and closed acquisitions | $ 8 | $ 5 |
SEGMENT INFORMATION - General I
SEGMENT INFORMATION - General Information and Customer Concentration (Details) | Aug. 17, 2018hospital | Sep. 30, 2018hospitalstate |
United Surgical Partners International | Redeemable noncontrolling interests | ||
Segment Reporting Information [Line Items] | ||
Ownership percentage by parent | 95.00% | |
Conifer Health Solutions, LLC | ||
Segment Reporting Information [Line Items] | ||
Ownership percentage by parent | 76.20% | |
United Surgical Partners International | ||
Segment Reporting Information [Line Items] | ||
Number of states where operations occur | state | 27 | |
Number of ambulatory surgery centers | 255 | |
Number of urgent care centers | 36 | |
Number of diagnostic imaging centers | 23 | |
Number of surgical hospitals | 21 | |
European Surgical Partners Ltd | ||
Segment Reporting Information [Line Items] | ||
Number of facilities owned by subsidiaries | 9 | |
Hospital Operations and other | ||
Segment Reporting Information [Line Items] | ||
Number of hospitals | 68 | |
Number of states where operations occur | state | 10 | |
Conifer | Minimum | ||
Segment Reporting Information [Line Items] | ||
Number of hospitals to which segment of the entity provides revenue cycle services | 780 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciling Items (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||
Assets | $ 22,265 | $ 22,265 | $ 23,385 | |||
Capital expenditures | 136 | $ 144 | 404 | $ 492 | ||
Net operating revenues | 4,489 | 4,586 | 13,694 | 14,201 | ||
Equity in earnings of unconsolidated affiliates | 33 | 38 | 97 | 95 | ||
Adjusted EBITDA | 577 | 507 | 1,876 | 1,604 | ||
Depreciation and amortization | 204 | 219 | 602 | 662 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Adjusted EBITDA | 577 | 507 | 1,876 | 1,604 | ||
Income (loss) from divested and closed businesses (i.e., the Company’s health plan businesses) | 9 | (6) | 9 | (41) | ||
Depreciation and amortization | (204) | (219) | (602) | (662) | ||
Impairment and restructuring charges, and acquisition-related costs | (46) | (329) | (123) | (403) | ||
Litigation and investigation costs | (9) | (6) | (28) | (12) | ||
Interest expense | (249) | (257) | (758) | (775) | ||
Loss from early extinguishment of debt | 0 | $ (1) | (138) | (2) | (164) | |
Other non-operating expense, net | 0 | (4) | (2) | (14) | ||
Net gains on sales, consolidation and deconsolidation of facilities | (7) | 104 | 111 | 142 | ||
Income (loss) from continuing operations, before income taxes | 71 | (348) | 481 | (325) | ||
Inter-segment eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Net operating revenues | (146) | (149) | (440) | (463) | ||
Hospital Operations and other | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 15,556 | 15,556 | 16,466 | |||
Net operating revenues | 502 | 468 | 1,531 | 1,395 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Health plan revenues (less than) | 8 | 10 | 14 | 100 | ||
Hospital Operations and other | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | 115 | 122 | 343 | 441 | ||
Net operating revenues | 3,762 | 3,866 | 11,442 | 12,066 | ||
Equity in earnings of unconsolidated affiliates | 2 | 4 | 6 | 4 | ||
Adjusted EBITDA | 312 | 269 | 1,059 | 924 | ||
Depreciation and amortization | 175 | 185 | 514 | 560 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Adjusted EBITDA | 312 | 269 | 1,059 | 924 | ||
Depreciation and amortization | (175) | (185) | (514) | (560) | ||
Ambulatory Care | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 5,640 | 5,640 | 5,822 | |||
Ambulatory Care | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | 18 | 16 | 46 | 37 | ||
Net operating revenues | 502 | 468 | 1,531 | 1,395 | ||
Equity in earnings of unconsolidated affiliates | 31 | 34 | 91 | 91 | ||
Adjusted EBITDA | 184 | 159 | 547 | 476 | ||
Depreciation and amortization | 17 | 22 | 51 | 66 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Adjusted EBITDA | 184 | 159 | 547 | 476 | ||
Depreciation and amortization | (17) | (22) | (51) | (66) | ||
Conifer | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets | 1,069 | 1,069 | $ 1,097 | |||
Net operating revenues | 371 | 401 | 1,161 | 1,203 | ||
Conifer | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | 3 | 6 | 15 | 14 | ||
Net operating revenues | 371 | 401 | 1,161 | 1,203 | ||
Adjusted EBITDA | 81 | 79 | 270 | 204 | ||
Depreciation and amortization | 12 | 12 | 37 | 36 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Adjusted EBITDA | 81 | 79 | 270 | 204 | ||
Depreciation and amortization | (12) | (12) | (37) | (36) | ||
Conifer | Operating segments | Tenet | ||||||
Segment Reporting Information [Line Items] | ||||||
Net operating revenues | 146 | 149 | 440 | 463 | ||
Conifer | Operating segments | Other customers | ||||||
Segment Reporting Information [Line Items] | ||||||
Net operating revenues | $ 225 | $ 252 | $ 721 | $ 740 |