Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 1-7293 | |
Entity Registrant Name | TENET HEALTHCARE CORP | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 95-2557091 | |
Entity Address, Address Line One | 1445 Ross Avenue, Suite 1400 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75202 | |
City Area Code | 469 | |
Local Phone Number | 893-2200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 103,448,475 | |
Entity Central Index Key | 0000070318 | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus (i.e. Q1,Q2,Q3,FY) | Q2 | |
Amendment Flag | false | |
Common stock | New York Stock Exchange | ||
Title of 12(b) Security | Common stock | |
Trading Symbol | THC | |
Security Exchange Name | NYSE | |
6.875% Senior Notes due 2031 | New York Stock Exchange | ||
Title of 12(b) Security | 6.875% Senior Notes due 2031 | |
Trading Symbol | THC31 | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 249 | $ 411 |
Accounts receivable | 2,734 | 2,595 |
Inventories of supplies, at cost | 309 | 305 |
Income tax receivable | 19 | 21 |
Assets held for sale | 0 | 107 |
Other current assets | 1,393 | 1,197 |
Total current assets | 4,704 | 4,636 |
Investments and other assets | 2,297 | 1,456 |
Deferred income taxes | 268 | 312 |
Property and equipment, at cost, less accumulated depreciation and amortization ($5,526 at June 30, 2019 and $5,221 at December 31, 2018) | 6,995 | 6,993 |
Goodwill | 7,298 | 7,281 |
Other intangible assets, at cost, less accumulated amortization ($1,051 at June 30, 2019 and $1,013 at December 31, 2018) | 1,645 | 1,731 |
Total assets | 23,207 | 22,409 |
Current liabilities: | ||
Current portion of long-term debt | 664 | 182 |
Accounts payable | 1,088 | 1,207 |
Accrued compensation and benefits | 720 | 838 |
Professional and general liability reserves | 228 | 216 |
Accrued interest payable | 233 | 240 |
Liabilities held for sale | 0 | 43 |
Other current liabilities | 1,217 | 1,131 |
Total current liabilities | 4,150 | 3,857 |
Long-term debt, net of current portion | 14,312 | 14,644 |
Professional and general liability reserves | 669 | 666 |
Defined benefit plan obligations | 507 | 521 |
Deferred income taxes | 36 | 36 |
Other long-term liabilities | 1,354 | 578 |
Total liabilities | 21,028 | 20,302 |
Commitments and contingencies | ||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | 1,462 | 1,420 |
Shareholders’ equity: | ||
Common stock, $0.05 par value; authorized 262,500,000 shares; 151,684,478 shares issued at June 30, 2019 and 150,897,143 shares issued at December 31, 2018 | 7 | 7 |
Additional paid-in capital | 4,755 | 4,747 |
Accumulated other comprehensive loss | (219) | (223) |
Accumulated deficit | (2,237) | (2,236) |
Common stock in treasury, at cost, 48,348,348 shares at June 30, 2019 and 48,359,705 shares at December 31, 2018 | (2,414) | (2,414) |
Total shareholders’ deficit | (108) | (119) |
Noncontrolling interests | 825 | 806 |
Total equity | 717 | 687 |
Total liabilities and equity | $ 23,207 | $ 22,409 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation and amortization | $ 5,526 | $ 5,221 |
Other intangible assets, accumulated amortization | $ 1,051 | $ 1,013 |
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) | 151,684,478 | 150,897,143 |
Common stock in treasury (in shares) | 48,348,348 | 48,359,705 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net operating revenues | $ 4,560 | $ 4,506 | $ 9,105 | $ 9,205 |
Equity in earnings of unconsolidated affiliates | 42 | 39 | 76 | 64 |
Operating expenses: | ||||
Salaries, wages and benefits | 2,148 | 2,135 | 4,301 | 4,362 |
Supplies | 753 | 748 | 1,494 | 1,522 |
Other operating expenses, net | 1,044 | 1,027 | 2,118 | 2,087 |
Electronic health record incentives | 0 | 0 | (1) | (1) |
Depreciation and amortization | 214 | 194 | 422 | 398 |
Impairment and restructuring charges, and acquisition-related costs | 36 | 30 | 55 | 77 |
Litigation and investigation costs | 18 | 13 | 31 | 19 |
Net losses (gains) on sales, consolidation and deconsolidation of facilities | 1 | (8) | 2 | (118) |
Operating income | 388 | 406 | 759 | 923 |
Interest expense | (247) | (254) | (498) | (509) |
Other non-operating expense, net | (1) | (1) | 0 | (2) |
Loss from early extinguishment of debt | 0 | (1) | (47) | (2) |
Income from continuing operations, before income taxes | 140 | 150 | 214 | 410 |
Income tax expense | (30) | (44) | (47) | (114) |
Income from continuing operations, before discontinued operations | 110 | 106 | 167 | 296 |
Discontinued operations: | ||||
Income from operations | 2 | 2 | 12 | 3 |
Income tax expense | 0 | 0 | (2) | 0 |
Income from discontinued operations | 2 | 2 | 10 | 3 |
Net income | 112 | 108 | 177 | 299 |
Less: Net income available to noncontrolling interests | 95 | 82 | 179 | 174 |
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | 17 | 26 | (2) | 125 |
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders | ||||
Income (loss) from continuing operations, net of tax | 15 | 24 | (12) | 122 |
Income from discontinued operations, net of tax | 2 | 2 | 10 | 3 |
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ 17 | $ 26 | $ (2) | $ 125 |
Basic | ||||
Continuing operations (in dollars per share) | $ 0.15 | $ 0.23 | $ (0.12) | $ 1.20 |
Discontinued operations (in dollars per share) | 0.02 | 0.02 | 0.10 | 0.03 |
Total loss per share, Basic (in dollars per share) | 0.17 | 0.25 | (0.02) | 1.23 |
Diluted | ||||
Continuing operations (in dollars per share) | 0.14 | 0.23 | (0.12) | 1.18 |
Discontinued operations (in dollars per share) | 0.02 | 0.02 | 0.10 | 0.03 |
Total loss per share, Diluted (in dollars per share) | $ 0.16 | $ 0.25 | $ (0.02) | $ 1.21 |
Weighted average shares and dilutive securities outstanding (in thousands): | ||||
Basic (in shares) | 103,198 | 102,147 | 102,993 | 101,770 |
Diluted (in shares) | 104,629 | 104,177 | 102,993 | 103,416 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 112 | $ 108 | $ 177 | $ 299 |
Other comprehensive income: | ||||
Amortization of net actuarial loss included in other non-operating expense, net | 3 | 4 | 6 | 8 |
Foreign currency translation adjustments | 0 | (9) | 0 | (3) |
Other comprehensive income (loss) before income taxes | 3 | (5) | 6 | 5 |
Income tax benefit (expense) related to items of other comprehensive income (loss) | (1) | 1 | (2) | (1) |
Total other comprehensive income (loss), net of tax | 2 | (4) | 4 | 4 |
Comprehensive net income | 114 | 104 | 181 | 303 |
Less: Comprehensive income available to noncontrolling interests | 95 | 82 | 179 | 174 |
Comprehensive income available to Tenet Healthcare Corporation common shareholders | $ 19 | $ 22 | $ 2 | $ 129 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 177 | $ 299 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 422 | 398 |
Deferred income tax expense | 42 | 108 |
Stock-based compensation expense | 23 | 20 |
Impairment and restructuring charges, and acquisition-related costs | 55 | 77 |
Litigation and investigation costs | 31 | 19 |
Net losses (gains) on sales, consolidation and deconsolidation of facilities | 2 | (118) |
Loss from early extinguishment of debt | 47 | 2 |
Equity in earnings of unconsolidated affiliates, net of distributions received | (2) | 10 |
Amortization of debt discount and debt issuance costs | 21 | 22 |
Pre-tax income from discontinued operations | (12) | (3) |
Other items, net | (10) | (1) |
Changes in cash from operating assets and liabilities: | ||
Accounts receivable | (138) | (13) |
Inventories and other current assets | (64) | 144 |
Income taxes | (2) | (18) |
Accounts payable, accrued expenses and other current liabilities | (217) | (371) |
Other long-term liabilities | 4 | (48) |
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (80) | (63) |
Net cash used in operating activities from discontinued operations, excluding income taxes | (5) | (3) |
Net cash provided by operating activities | 294 | 461 |
Cash flows from investing activities: | ||
Purchases of property and equipment — continuing operations | (336) | (268) |
Purchases of businesses or joint venture interests, net of cash acquired | (13) | (89) |
Proceeds from sales of facilities and other assets — continuing operations | 40 | 481 |
Proceeds from sales of facilities and other assets — discontinued operations | 17 | 0 |
Proceeds from sales of marketable securities, long-term investments and other assets | 9 | 143 |
Purchases of equity investments | (9) | (37) |
Other long-term assets | (4) | 3 |
Other items, net | (7) | (8) |
Net cash provided by (used in) investing activities | (303) | 225 |
Cash flows from financing activities: | ||
Repayments of borrowings under credit facility | (1,095) | (360) |
Proceeds from borrowings under credit facility | 1,285 | 360 |
Repayments of other borrowings | (1,668) | (161) |
Proceeds from other borrowings | 1,516 | 14 |
Debt issuance costs | (18) | 0 |
Distributions paid to noncontrolling interests | (144) | (140) |
Proceeds from sales of noncontrolling interests | 9 | 7 |
Purchases of noncontrolling interests | (6) | (642) |
Proceeds from exercise of stock options and employee stock purchase plan | 3 | 14 |
Other items, net | (35) | 14 |
Net cash used in financing activities | (153) | (894) |
Net decrease in cash and cash equivalents | (162) | (208) |
Cash and cash equivalents at beginning of period | 411 | 611 |
Cash and cash equivalents at end of period | 249 | 403 |
Supplemental disclosures: | ||
Interest paid, net of capitalized interest | (484) | (501) |
Income tax payments, net | $ (13) | $ (21) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
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 national, diversified healthcare services company. We operate regionally focused, integrated healthcare delivery networks, primarily in large urban and suburban markets. Through our subsidiaries, partnerships and joint ventures, including USPI Holding Company, Inc. (“USPI”), at June 30, 2019 , we operated 65 hospitals, 23 surgical hospitals and approximately 480 outpatient centers throughout the United States. In addition, 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, 2018 (“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, 2019, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) using the modified retrospective transition approach as of the period of adoption. Our financial statements for periods prior to January 1, 2019 were not modified for the application of the new lease accounting standard. The main difference between the guidance in ASU 2016-02 and previous accounting principles generally accepted in the United States of America (“GAAP”) is the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under previous GAAP. Upon adoption of ASU 2016-02, we recorded $822 million of right-of-use assets, net of deferred rent, associated with operating leases in investments and other assets in our condensed consolidated balance sheet, $147 million of current liabilities associated with operating leases in other current liabilities in our condensed consolidated balance sheet and $715 million of long-term liabilities associated with operating leases in other long-term liabilities in our condensed consolidated balance sheet. We also recognized $1 million of cumulative effect adjustment that decreased accumulated deficit at January 1, 2019. 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 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 six month periods ended June 30, 2019 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; 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 (losses) from early extinguishment of debt; and changes in occupancy levels and patient volumes. Factors that affect service mix, revenue mix, 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, satisfaction, 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 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. Net Operating Revenues 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. 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. 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 $249 million and $411 million at June 30, 2019 and December 31, 2018 , respectively. At June 30, 2019 and December 31, 2018 , our book overdrafts were $251 million and $288 million , respectively, which were classified as accounts payable. At June 30, 2019 and December 31, 2018 , $156 million and $177 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 $2 million and $8 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 June 30, 2019 and December 31, 2018 , we had $80 million and $135 million , respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $53 million and $114 million , respectively, were included in accounts payable. During the six months ended June 30, 2019 and 2018 , we entered into non-cancellable capital (finance) leases of $58 million and $50 million , respectively. Other Intangible Assets The following tables provide information regarding other intangible assets, which are included in the accompanying Condensed Consolidated Balance Sheets at June 30, 2019 and December 31, 2018 : Gross Accumulated Net Book At June 30, 2019: Capitalized software costs $ 1,615 $ (881 ) $ 734 Trade names 102 — 102 Contracts 874 (86 ) 788 Other 105 (84 ) 21 Total $ 2,696 $ (1,051 ) $ 1,645 Gross Accumulated Net Book At December 31, 2018: Capitalized software costs $ 1,667 $ (858 ) $ 809 Trade names 102 — 102 Contracts 871 (76 ) 795 Other 104 (79 ) 25 Total $ 2,744 $ (1,013 ) $ 1,731 Estimated future amortization of intangibles with finite useful lives at June 30, 2019 is as follows: Six Months Years Ending Later Years December 31, Total 2019 2020 2021 2022 2023 Amortization of intangible assets $ 964 $ 76 $ 130 $ 115 $ 99 $ 89 $ 455 We recognized amortization expense of $90 million and $89 million in the accompanying Condensed Consolidated Statements of Operations for the six months ended June 30, 2019 and 2018 , respectively. Investments in Unconsolidated Affiliates We control 232 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 ( 112 of 344 at June 30, 2019 ), as well as additional companies 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 as equity in earnings of unconsolidated affiliates in the accompanying Condensed Consolidated Statements of Operations. Summarized financial information for these equity method investees is included in the following table; among the equity method investees are 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. For investments acquired during the reporting periods, amounts reflect 100% of the investee’s results beginning on the date of our acquisition of the investment. Three Months Ended Six Months Ended 2019 2018 2019 2018 Net operating revenues $ 619 $ 547 $ 1,187 $ 1,121 Net income $ 141 $ 132 $ 291 $ 248 Net income available to the investees $ 87 $ 89 $ 193 $ 160 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended |
Jun. 30, 2019 | |
Accounts Receivable Additional Disclosures [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The principal components of accounts receivable are shown in the table below: June 30, 2019 December 31, 2018 Continuing operations: Patient accounts receivable $ 2,525 $ 2,427 Estimated future recoveries 158 148 Net cost reports and settlements receivable and valuation allowances 49 18 2,732 2,593 Discontinued operations 2 2 Accounts receivable, net $ 2,734 $ 2,595 Accounts that are pursued for collection through Conifer’s business offices are maintained on our hospitals’ books and reflected in patient accounts receivable. Patient accounts receivable, including billed accounts and certain unbilled accounts, as well as 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. 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 had $297 million and $149 million of receivables recorded in other current assets and investments and other assets, respectively, and $91 million and $29 million of payables recorded in other current liabilities and other long-term liabilities, respectively, in the accompanying Condensed Consolidated Balance Sheet at June 30, 2019 related to California’s provider fee program. We had $278 million and $231 million of receivables recorded in other current assets and investments and other assets, respectively, and $100 million and $42 million of payables recorded in other current liabilities and other long-term liabilities, respectively, in the accompanying Condensed Consolidated Balance Sheet at December 31, 2018 related to California’s provider fee program. We also provide financial assistance through our charity and uninsured discount programs to uninsured patients who are unable to pay for the healthcare services they receive. Our policy is not to pursue collection of amounts determined to qualify for financial assistance; 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. Some states have also developed provider fee or other supplemental payment programs to mitigate the shortfall of Medicaid reimbursement compared to the cost of caring for Medicaid 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 uninsured and charity patients in the three and six months ended June 30, 2019 and 2018 : Three Months Ended Six Months Ended 2019 2018 2019 2018 Estimated costs for: Uninsured patients $ 164 $ 159 $ 322 $ 305 Charity care patients 41 28 75 63 Total $ 205 $ 187 $ 397 $ 368 |
CONTRACT BALANCES
CONTRACT BALANCES | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT BALANCES | CONTRACT BALANCES Hospital Operations and Other Segment 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 in the accompanying Condensed Consolidated Balance Sheet at June 30, 2019. The opening and closing balances of contract assets for our Hospital Operations and other segment are as follows: December 31, 2018 $ 169 June 30, 2019 160 Increase/(decrease) $ (9 ) January 1, 2018 $ 171 June 30, 2018 136 Increase/(decrease) $ (35 ) 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 the 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 December 31, 2018 $ 42 $ 11 $ 61 $ 20 June 30, 2019 96 15 67 19 Increase/(decrease) $ 54 $ 4 $ 6 $ (1 ) January 1, 2018 $ 89 $ 10 $ 80 $ 21 June 30, 2018 90 11 78 21 Increase/(decrease) $ 1 $ 1 $ (2 ) $ — 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 six months ended June 30, 2019 and 2018 that was included in the opening current deferred revenue liability was $56 million and $66 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 Accounting Standards Codification 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. During the three months ended June 30, 2019 and 2018 , we recognized amortization expense of $1 million and $3 million , respectively. During the six months ended June 30, 2019 and 2018 , we recognized amortization expense of $2 million and $6 million , respectively. At June 30, 2019 and December 31, 2018, the unamortized customer contract costs were $27 million and $28 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 from continuing operations: Three Months Ended Six Months Ended 2019 2018 2019 2018 Hospital Operations and other: Net patient service revenues from hospitals and related outpatient facilities Medicare $ 721 $ 701 $ 1,479 $ 1,483 Medicaid 316 314 630 635 Managed care 2,330 2,273 4,684 4,641 Uninsured 11 8 12 45 Indemnity and other 169 147 324 282 Total 3,547 3,443 7,129 7,086 Physician practices revenues 282 271 552 551 Health plans 1 — 1 6 Revenue from other sources (3 ) 19 7 37 Hospital Operations and other total prior to inter-segment eliminations 3,827 3,733 7,689 7,680 Ambulatory Care 524 531 1,004 1,029 Conifer 355 386 704 790 Inter-segment eliminations (146 ) (144 ) (292 ) (294 ) Net operating revenues $ 4,560 $ 4,506 $ 9,105 $ 9,205 Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the six months ended June 30, 2019 and 2018 by $17 million and $11 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 for our Ambulatory Care segment: Three Months Ended Six Months Ended 2019 2018 2019 2018 Net patient service revenues $ 496 $ 500 $ 947 $ 969 Management fees 23 23 46 46 Revenue from other sources 5 8 11 14 Net operating revenues $ 524 $ 531 $ 1,004 $ 1,029 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Six Months Ended 2019 2018 2019 2018 Revenue cycle services – Tenet $ 142 $ 139 $ 284 $ 283 Revenue cycle services – other customers 187 220 367 452 Other services – Tenet 4 5 8 11 Other services – other customers 22 22 45 44 Net operating revenues $ 355 $ 386 $ 704 $ 790 Other services represent 8% of Conifer’s revenue and include value-based care services, consulting services and other client-defined projects. 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 primarily 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 Common Spirit, 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 Common Spirit ends in 2032. Six Months Years Ending Later Years December 31, Total 2019 2020 2021 2022 2023 Performance obligations $ 7,587 $ 298 $ 597 $ 594 $ 594 $ 594 $ 4,910 |
ASSETS AND LIABILITIES HELD FOR
ASSETS AND LIABILITIES HELD FOR SALE | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operation, Additional Disclosures [Abstract] | |
ASSETS AND LIABILITIES HELD FOR SALE | ASSETS AND LIABILITIES HELD FOR SALE There were no assets or liabilities classified as held for sale at June 30, 2019 . 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 $107 million as “assets held for sale” in current assets and the related liabilities of $43 million as “liabilities held for sale” in current liabilities in the accompanying Condensed Consolidated Balance Sheet at December 31, 2018. These assets and liabilities, which were in our Hospital Operations and other segment until their divestiture on January 28, 2019, 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 in the three months ended March 31, 2018 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. The following table provides information on significant components of our business that have been disposed of since January 1, 2018: Three Months Ended Six Months Ended 2019 2018 2019 2018 Significant disposals: Income (loss) from continuing operations, before income taxes Chicago-area (includes a $6 million loss on sale in the 2019 year-to-date period and $17 million of impairment charges in the 2018 year-to-date period) $ 1 $ 1 $ (11 ) $ (15 ) Philadelphia (includes a $2 million loss on sale in the 2018 year-to-date period) — (2 ) 1 (11 ) MacNeal (includes a $95 million gain on sale in the 2018 year-to-date period) 1 (4 ) 2 97 Aspen (includes a $4 million of impairment charges in the 2018 year-to-date period) — (3 ) — — Total $ 2 $ (8 ) $ (8 ) $ 71 |
IMPAIRMENT AND RESTRUCTURING CH
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 , we recorded impairment and restructuring charges and acquisition-related costs of $55 million , consisting of $5 million of impairment charges , $47 million of restructuring charges and $3 million of acquisition-related costs . Restructuring charges consisted of $18 million of employee severance costs , $2 million of contract and lease termination fees , and $27 million of other restructuring costs . Acquisition-related costs consisted of $3 million of transaction costs . Our impairment charges for the six months ended June 30, 2019 were comprised of $4 million from our Hospital Operations and other segment and $1 million from our Ambulatory Care segment. During the six months ended June 30, 2018 , we recorded impairment and restructuring charges and acquisition-related costs of $77 million , consisting of $23 million of impairment charges , $47 million of restructuring charges and $7 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 Chicago-area facilities , $4 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for Aspen and $2 million of other impairment charges. Restructuring charges consisted of $26 million of employee severance costs , $5 million of contract and lease termination fees , and $16 million of other restructuring costs . Acquisition-related costs consisted of $5 million of transaction costs and $2 million of acquisition integration charges . Our impairment charges for the six months ended June 30, 2018 were comprised of $19 million from our Hospital Operations and other segment and $4 million from our Ambulatory Care 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 each facility’s most recent projections. If these projections are not met, or if in the future negative trends occur that impact our future outlook, impairments of long-lived assets and goodwill may occur, and we may incur additional restructuring charges, which could be material. At June 30, 2019 , 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. |
LEASES (Notes)
LEASES (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The following table presents the components of our right-of-use assets and liabilities related to leases and their classification in our Condensed Consolidated Balance Sheet at June 30, 2019 : Component of Lease Balances Classification in Condensed Consolidated Balance Sheet June 30, 2019 Assets: Operating lease assets Investments and other assets $ 874 Finance lease assets Property and equipment, at cost, less 439 Total leased assets $ 1,313 Liabilities: Operating lease liabilities: Current Other current liabilities $ 149 Long-term Other long-term liabilities 819 Total operating lease liabilities 968 Finance lease liabilities: Current Current portion of long-term debt 141 Long-term Long-term debt, net of current portion 214 Total finance lease liabilities 355 Total lease liabilities $ 1,323 We determine if an arrangement is a lease at inception of the contract. Our right-of-use assets represent our right to use the underlying assets for the lease term and our lease liabilities represent our obligation to make lease payments arising from the leases. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. For our Hospital Operations and other and Conifer segments, we estimate our incremental borrowing rates for our portfolio of leases using documented rates included in our recent equipment finance leases or, if applicable, recent secured debt issuances that correspond to various lease terms. We also give consideration to information obtained from our bankers, our secured debt fair value and publicly available data for instruments with similar characteristics. For our Ambulatory Care segment, we estimate an incremental borrowing rate for each center by utilizing historical and projected financial data, estimating a hypothetical credit rating using publicly available market data and adjusting the market data to reflect the effects of collateralization. Our operating leases are primarily for real estate, including off-campus outpatient facilities, medical office buildings, and corporate and other administrative offices, as well as medical and office equipment. Our finance leases are primarily for medical equipment and information technology and telecommunications assets. Our real estate lease agreements typically have initial terms of five to 10 years, and our equipment lease agreements typically have initial terms of three years. We do not record leases with an initial term of 12 months or less (“short-term leases”) in our consolidated balance sheets. Our real estate leases may include one or more options to renew, with renewals that can extend the lease term from five to 10 years. The exercise of lease renewal options is at our sole discretion. In general, we do not consider renewal options to be reasonably likely to be exercised, therefore, renewal options are generally not recognized as part of our right-of-use assets and lease liabilities. Certain leases also include options to purchase the leased property. The useful life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The majority of our medical equipment leases have terms of three years with a bargain purchase option that is reasonably certain of exercise, so these assets are depreciated over their useful life, typically ranging from five to seven years. Similarly, some of our leases of information technology and telecommunications assets include a transfer of title and, therefore, have useful lives of 15 years. Certain of our lease agreements for real estate include payments based on actual common area maintenance expenses and others include rental payments adjusted periodically for inflation. These variable lease payments are recognized in other operating expenses, net, but are not included in the right-of-use asset or liability balances. Our lease agreements do not contain any material residual value guarantees, restrictions or covenants. We have elected the practical expedient that allows lessees to choose to not separate lease and non-lease components by class of underlying asset and are applying this expedient to all relevant asset classes. We have also elected the practical expedient package to not reassess at adoption (i) expired or existing contracts for whether they are or contain a lease, (ii) the lease classification of any existing leases or (iii) initial indirect costs for existing leases. The following table presents the components of our lease expense and their classification in our Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2019 : Classification on Condensed Consolidated Three Months Ended Six Months Ended Component of Lease Expense Statements of Operations June 30, 2019 June 30, 2019 Operating lease expense Other operating expenses, net $ 52 $ 102 Finance lease expense: Amortization of leased assets Depreciation and amortization 23 41 Interest on lease liabilities Interest expense 3 8 Total finance lease expense 26 49 Variable and short term-lease expense Other operating expenses, net 33 67 Total lease expense $ 111 $ 218 The weighted-average lease terms and discount rates for operating and finance leases are presented in the following table: June 30, 2019 Weighted-average remaining lease term (years) Operating leases 7.7 Finance leases 6.0 Weighted-average discount rate Operating leases 5.5 % Finance leases 5.6 % Cash flow and other information related to leases is included in the following table: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 95 Operating cash outflows from finance leases $ 9 Financing cash outflows from finance leases $ 75 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 139 Finance leases $ 58 Future maturities of lease liabilities at June 30, 2019 are presented in the following table: Operating Leases Finance Leases Total 2019 $ 149 $ 141 $ 290 2020 176 128 304 2021 163 72 235 2022 145 19 164 2023 124 13 137 Later years 492 124 616 Total lease payments 1,249 497 1,746 Less: Imputed interest 281 142 423 Total lease obligations 968 355 1,323 Less: Current obligations 149 141 290 Long-term lease obligations $ 819 $ 214 $ 1,033 Future maturities of lease liabilities at December 31, 2018 , prior to our adoption of ASU 2016-02, are presented in the following table: Years Ending December 31, Later Years Total 2019 2020 2021 2022 2023 Capital lease obligations $ 425 $ 140 $ 95 $ 57 $ 37 $ 21 $ 75 Long-term non-cancelable operating leases $ 932 $ 171 $ 151 $ 133 $ 113 $ 92 $ 272 |
LEASES | LEASES The following table presents the components of our right-of-use assets and liabilities related to leases and their classification in our Condensed Consolidated Balance Sheet at June 30, 2019 : Component of Lease Balances Classification in Condensed Consolidated Balance Sheet June 30, 2019 Assets: Operating lease assets Investments and other assets $ 874 Finance lease assets Property and equipment, at cost, less 439 Total leased assets $ 1,313 Liabilities: Operating lease liabilities: Current Other current liabilities $ 149 Long-term Other long-term liabilities 819 Total operating lease liabilities 968 Finance lease liabilities: Current Current portion of long-term debt 141 Long-term Long-term debt, net of current portion 214 Total finance lease liabilities 355 Total lease liabilities $ 1,323 We determine if an arrangement is a lease at inception of the contract. Our right-of-use assets represent our right to use the underlying assets for the lease term and our lease liabilities represent our obligation to make lease payments arising from the leases. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. For our Hospital Operations and other and Conifer segments, we estimate our incremental borrowing rates for our portfolio of leases using documented rates included in our recent equipment finance leases or, if applicable, recent secured debt issuances that correspond to various lease terms. We also give consideration to information obtained from our bankers, our secured debt fair value and publicly available data for instruments with similar characteristics. For our Ambulatory Care segment, we estimate an incremental borrowing rate for each center by utilizing historical and projected financial data, estimating a hypothetical credit rating using publicly available market data and adjusting the market data to reflect the effects of collateralization. Our operating leases are primarily for real estate, including off-campus outpatient facilities, medical office buildings, and corporate and other administrative offices, as well as medical and office equipment. Our finance leases are primarily for medical equipment and information technology and telecommunications assets. Our real estate lease agreements typically have initial terms of five to 10 years, and our equipment lease agreements typically have initial terms of three years. We do not record leases with an initial term of 12 months or less (“short-term leases”) in our consolidated balance sheets. Our real estate leases may include one or more options to renew, with renewals that can extend the lease term from five to 10 years. The exercise of lease renewal options is at our sole discretion. In general, we do not consider renewal options to be reasonably likely to be exercised, therefore, renewal options are generally not recognized as part of our right-of-use assets and lease liabilities. Certain leases also include options to purchase the leased property. The useful life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The majority of our medical equipment leases have terms of three years with a bargain purchase option that is reasonably certain of exercise, so these assets are depreciated over their useful life, typically ranging from five to seven years. Similarly, some of our leases of information technology and telecommunications assets include a transfer of title and, therefore, have useful lives of 15 years. Certain of our lease agreements for real estate include payments based on actual common area maintenance expenses and others include rental payments adjusted periodically for inflation. These variable lease payments are recognized in other operating expenses, net, but are not included in the right-of-use asset or liability balances. Our lease agreements do not contain any material residual value guarantees, restrictions or covenants. We have elected the practical expedient that allows lessees to choose to not separate lease and non-lease components by class of underlying asset and are applying this expedient to all relevant asset classes. We have also elected the practical expedient package to not reassess at adoption (i) expired or existing contracts for whether they are or contain a lease, (ii) the lease classification of any existing leases or (iii) initial indirect costs for existing leases. The following table presents the components of our lease expense and their classification in our Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2019 : Classification on Condensed Consolidated Three Months Ended Six Months Ended Component of Lease Expense Statements of Operations June 30, 2019 June 30, 2019 Operating lease expense Other operating expenses, net $ 52 $ 102 Finance lease expense: Amortization of leased assets Depreciation and amortization 23 41 Interest on lease liabilities Interest expense 3 8 Total finance lease expense 26 49 Variable and short term-lease expense Other operating expenses, net 33 67 Total lease expense $ 111 $ 218 The weighted-average lease terms and discount rates for operating and finance leases are presented in the following table: June 30, 2019 Weighted-average remaining lease term (years) Operating leases 7.7 Finance leases 6.0 Weighted-average discount rate Operating leases 5.5 % Finance leases 5.6 % Cash flow and other information related to leases is included in the following table: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 95 Operating cash outflows from finance leases $ 9 Financing cash outflows from finance leases $ 75 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 139 Finance leases $ 58 Future maturities of lease liabilities at June 30, 2019 are presented in the following table: Operating Leases Finance Leases Total 2019 $ 149 $ 141 $ 290 2020 176 128 304 2021 163 72 235 2022 145 19 164 2023 124 13 137 Later years 492 124 616 Total lease payments 1,249 497 1,746 Less: Imputed interest 281 142 423 Total lease obligations 968 355 1,323 Less: Current obligations 149 141 290 Long-term lease obligations $ 819 $ 214 $ 1,033 Future maturities of lease liabilities at December 31, 2018 , prior to our adoption of ASU 2016-02, are presented in the following table: Years Ending December 31, Later Years Total 2019 2020 2021 2022 2023 Capital lease obligations $ 425 $ 140 $ 95 $ 57 $ 37 $ 21 $ 75 Long-term non-cancelable operating leases $ 932 $ 171 $ 151 $ 133 $ 113 $ 92 $ 272 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Long-term Debt and Lease Obligation [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The table below shows our long-term debt at June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 Senior unsecured notes: 5.500% due 2019 $ — $ 468 6.750% due 2020 — 300 8.125% due 2022 2,800 2,800 6.750% due 2023 1,872 1,872 7.000% due 2025 478 478 6.875% due 2031 362 362 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 5.125% due 2025 1,410 1,410 6.250% due 2027 1,500 — Credit facility due 2020 190 — Finance leases and mortgage notes 467 500 Unamortized issue costs and note discounts (173 ) (184 ) Total long-term debt 14,976 14,826 Less current portion 664 182 Long-term debt, net of current portion $ 14,312 $ 14,644 Senior Secured and Senior Unsecured Notes On February 5, 2019, we sold $1.5 billion aggregate principal amount of 6.250% senior secured second lien notes, which will mature on February 1, 2027 (the “2027 Senior Secured Second Lien Notes”). We will pay interest on the 2027 Senior Secured Second Lien Notes semi-annually in arrears on February 1 and August 1 of each year, which payments commenced on August 1, 2019. The proceeds from the sale of the 2027 Senior Secured Second Lien Notes were used, after payment of fees and expenses, together with cash on hand and borrowings under our senior secured revolving credit facility, to fund the redemption of all $300 million aggregate principal amount of our outstanding 6.750% senior notes due 2020 and all $750 million aggregate principal amount of our outstanding 7.500% senior secured second lien notes due 2022, as well as the repayment upon maturity of all $468 million aggregate principal amount of our outstanding 5.500% senior unsecured notes due March 1, 2019. In connection with the redemptions, we recorded a loss from early extinguishment of debt of approximately $47 million in the three months ended March 31, 2019 , primarily related to the difference between the redemption prices and the par values of the notes, as well as the write-off of the 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 June 30, 2019 , we had $190 million of cash borrowings outstanding under the Credit Agreement subject to a weighted average interest rate of 3.77% , and we had $2 million of standby letters of credit outstanding. Based on our eligible receivables, $808 million was available for borrowing under the Credit Agreement at June 30, 2019 . 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 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 accrues 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 June 30, 2019 , we had $100 million of standby letters of credit outstanding under the LC Facility. |
GUARANTEES
GUARANTEES | 6 Months Ended |
Jun. 30, 2019 | |
Guarantees [Abstract] | |
GUARANTEES | GUARANTEES At June 30, 2019 , 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 $138 million . We had a total liability of $112 million recorded for these guarantees included in other current liabilities at June 30, 2019 . At June 30, 2019 , 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 $24 million . Of the total, $8 million relates to the obligations of consolidated subsidiaries, which obligations are recorded in the accompanying Condensed Consolidated Balance Sheet at June 30, 2019 . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2019 | |
Defined Benefit Plan [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Share-Based Compensation Plans In recent years, we have granted options and restricted stock units to certain of our employees and directors pursuant to our stock incentive plans. 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 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 June 30, 2019 , assuming outstanding performance-based restricted stock units and options for which performance has not yet been determined will achieve target performance, approximately 8.0 million shares of common stock were available under our 2019 Stock Incentive Plan for future stock option grants and other equity incentive awards, including restricted stock units (approximately 7.7 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). The accompanying Condensed Consolidated Statements of Operations for the six months ended June 30, 2019 and 2018 include $23 million and $20 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 six months ended June 30, 2019 : Options Weighted Average Aggregate Weighted Average (In Millions) Outstanding at December 31, 2018 2,262,743 $ 19.12 Granted 230,713 28.28 Exercised (76,159 ) 4.56 Forfeited/Expired (120,871 ) 19.25 Outstanding at June 30, 2019 2,296,426 $ 20.52 $ 3 6.4 years Vested and expected to vest at June 30, 2019 2,296,426 $ 20.52 $ 3 6.4 years Exercisable at June 30, 2019 684,628 $ 19.03 $ 2 3.1 years There were 76,159 and 581,120 stock options exercised during the six months ended June 30, 2019 and 2018 , respectively, with aggregate intrinsic values of approximately $1 million and $3 million , respectively. At June 30, 2019 , there were $6 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 1.9 years . On March 29, 2019, we granted an aggregate of 7,862 performance-based stock options to a new senior officer. The options will all vest on the third anniversary of the grant date, subject to the achievement of a closing stock price of at least $36.05 (a 25% premium above the March 29, 2019 grant-date closing stock price of $28.84 ) 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. On February 27, 2019, we granted to certain of our senior officers an aggregate of 222,851 performance-based stock options. The options will all vest on the third anniversary of the grant date, subject to the achievement of a closing stock price of at least $35.33 (a 25% premium above the February 27, 2019 grant-date closing stock price of $28.26 ) 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 June 30, 2018, we granted new senior officers 31,184 performance-based stock options. 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 to certain of our senior officers an aggregate of 604,012 performance-based stock options. 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. The weighted average estimated fair value of stock options we granted in the six months ended June 30, 2019 and 2018 was $12.50 and $9.16 per share, respectively. These fair values were calculated based on each grant date, using a Monte Carlo simulation with the following assumptions: February 27, 2019 February 28, 2018 Expected volatility 48% 46% Expected dividend yield 0% 0% Expected life 6.2 years 6.2 years Expected forfeiture rate 0% 0% Risk-free interest rate 2.53% 2.72% The expected volatility used for the 2019 and 2018 Monte Carlo simulations 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 expected 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 historical share-price volatility for 2019 and 2018 excludes the movements in our stock price for the period from August 15, 2017 through November 30, 2017 due to impact that the announcement of the departure of certain board members and officers, as well as reports that we were exploring a potential sale of the company, had on our stock price during that time. 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 June 30, 2019 : Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted Average Weighted Average Number of Weighted Average $16.43 to $19.759 1,246,675 5.7 years 18.15 413,960 16.46 $19.76 to $35.430 1,049,751 7.1 years 23.33 270,668 22.94 2,296,426 6.4 years $ 20.52 684,628 $ 19.03 Restricted Stock Units The following table summarizes restricted stock unit activity during the six months ended June 30, 2019 : Restricted Stock Units Weighted Average Grant Unvested at December 31, 2018 1,884,130 $ 32.25 Granted 1,235,876 26.20 Vested (817,820 ) 27.55 Forfeited (298,680 ) 25.02 Unvested at June 30, 2019 2,003,506 $ 31.52 In the six months ended June 30, 2019 , we granted an aggregate of 1,235,876 restricted stock units. Of these, 243,506 will vest and be settled ratably over a three -year period from the grant date, 566,172 will vest and be settled ratably over a 27 month period from the grant date, and 318,327 will vest and be settled on the third anniversary of the grant date. In addition, in May 2019, we made an annual grant of 100,444 restricted stock units to our non-employee directors for the 2019-2020 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. We also granted 7,427 additional restricted stock units that vested and settled immediately as a result of our level of achievement with respect to a performance goal on a 2013 grant. In the six months ended June 30, 2018, we granted an aggregate of 730,577 restricted stock units. Of these, 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 26,356 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 June 30, 2019 , there were $34 million of total unrecognized compensation costs related to restricted stock units. These costs are expected to be recognized over a weighted average period of 1.9 years . Employee Retirement Plans In the six months ended June 30, 2019 and 2018 , we recognized (i) service cost related to one of our frozen nonqualified defined benefit pension plans of less than $1 million and approximately $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 $11 million and $8 million , respectively, in other non-operating expense, net, in the accompanying Condensed Consolidated Statements of Operations. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Changes in Shareholders’ Equity The following tables show the changes in consolidated equity during the six months ended June 30, 2019 and 2018 (dollars in millions, share amounts in thousands): Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2018 102,537 $ 7 $ 4,747 $ (223 ) $ (2,236 ) $ (2,414 ) $ 806 $ 687 Net income (loss) — — — — (19 ) — 37 18 Distributions paid to noncontrolling interests — — — — — — (37 ) (37 ) Other comprehensive income — — — 2 — — — 2 Accretion of redeemable noncontrolling interests — — (5 ) — — — — (5 ) Purchases (sales) of businesses and noncontrolling interests — — (2 ) — — — 2 — Cumulative effect of accounting change — — — — 1 — — 1 Stock-based compensation expense, tax benefit and issuance of common stock 543 — 8 — — — — 8 Balances at March 31, 2019 103,080 $ 7 $ 4,748 $ (221 ) $ (2,254 ) $ (2,414 ) $ 808 $ 674 Net income — — — — 17 — 47 64 Distributions paid to noncontrolling interests — — — — — — (35 ) (35 ) Other comprehensive income — — — 2 — — — 2 Accretion of redeemable noncontrolling interests — — (4 ) — — — — (4 ) Purchases of businesses and noncontrolling interests — — — — — — 5 5 Stock-based compensation expense, tax benefit and issuance of common stock 256 — 11 — — — — 11 Balances at June 30, 2019 103,336 $ 7 $ 4,755 $ (219 ) $ (2,237 ) $ (2,414 ) $ 825 $ 717 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 ) 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 Our noncontrolling interests balances at June 30, 2019 and December 31, 2018 were comprised of $116 million and $112 million , respectively, from our Hospital Operations and other segment, and $709 million and $694 million , respectively, from our Ambulatory Care segment. Our net income available to noncontrolling interests for the six months ended June 30, 2019 and 2018 in the table above were comprised of $7 million and $4 million , respectively, from our Hospital Operations and other segment, and $77 million and $69 million , respectively, from our Ambulatory Care segment. |
NET OPERATING REVENUES
NET OPERATING REVENUES | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
NET OPERATING REVENUES | CONTRACT BALANCES Hospital Operations and Other Segment 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 in the accompanying Condensed Consolidated Balance Sheet at June 30, 2019. The opening and closing balances of contract assets for our Hospital Operations and other segment are as follows: December 31, 2018 $ 169 June 30, 2019 160 Increase/(decrease) $ (9 ) January 1, 2018 $ 171 June 30, 2018 136 Increase/(decrease) $ (35 ) 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 the 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 December 31, 2018 $ 42 $ 11 $ 61 $ 20 June 30, 2019 96 15 67 19 Increase/(decrease) $ 54 $ 4 $ 6 $ (1 ) January 1, 2018 $ 89 $ 10 $ 80 $ 21 June 30, 2018 90 11 78 21 Increase/(decrease) $ 1 $ 1 $ (2 ) $ — 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 six months ended June 30, 2019 and 2018 that was included in the opening current deferred revenue liability was $56 million and $66 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 Accounting Standards Codification 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. During the three months ended June 30, 2019 and 2018 , we recognized amortization expense of $1 million and $3 million , respectively. During the six months ended June 30, 2019 and 2018 , we recognized amortization expense of $2 million and $6 million , respectively. At June 30, 2019 and December 31, 2018, the unamortized customer contract costs were $27 million and $28 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 from continuing operations: Three Months Ended Six Months Ended 2019 2018 2019 2018 Hospital Operations and other: Net patient service revenues from hospitals and related outpatient facilities Medicare $ 721 $ 701 $ 1,479 $ 1,483 Medicaid 316 314 630 635 Managed care 2,330 2,273 4,684 4,641 Uninsured 11 8 12 45 Indemnity and other 169 147 324 282 Total 3,547 3,443 7,129 7,086 Physician practices revenues 282 271 552 551 Health plans 1 — 1 6 Revenue from other sources (3 ) 19 7 37 Hospital Operations and other total prior to inter-segment eliminations 3,827 3,733 7,689 7,680 Ambulatory Care 524 531 1,004 1,029 Conifer 355 386 704 790 Inter-segment eliminations (146 ) (144 ) (292 ) (294 ) Net operating revenues $ 4,560 $ 4,506 $ 9,105 $ 9,205 Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the six months ended June 30, 2019 and 2018 by $17 million and $11 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 for our Ambulatory Care segment: Three Months Ended Six Months Ended 2019 2018 2019 2018 Net patient service revenues $ 496 $ 500 $ 947 $ 969 Management fees 23 23 46 46 Revenue from other sources 5 8 11 14 Net operating revenues $ 524 $ 531 $ 1,004 $ 1,029 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Six Months Ended 2019 2018 2019 2018 Revenue cycle services – Tenet $ 142 $ 139 $ 284 $ 283 Revenue cycle services – other customers 187 220 367 452 Other services – Tenet 4 5 8 11 Other services – other customers 22 22 45 44 Net operating revenues $ 355 $ 386 $ 704 $ 790 Other services represent 8% of Conifer’s revenue and include value-based care services, consulting services and other client-defined projects. 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 primarily 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 Common Spirit, 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 Common Spirit ends in 2032. Six Months Years Ending Later Years December 31, Total 2019 2020 2021 2022 2023 Performance obligations $ 7,587 $ 298 $ 597 $ 594 $ 594 $ 594 $ 4,910 |
PROPERTY AND PROFESSIONAL AND G
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 through March 31, 2020, 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 $40 million for California earthquakes, $25 million for floods and named windstorms, 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 We are self-insured for the majority of our professional and general liability claims and purchase insurance from third-parties to cover catastrophic claims. At June 30, 2019 and December 31, 2018 , the aggregate current and long-term professional and general liability reserves in the accompanying Condensed Consolidated Balance Sheets were $897 million and $882 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 1.87% at June 30, 2019 and 2.59% at December 31, 2018 . 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 $205 million and $163 million for the six months ended June 30, 2019 and 2018 , respectively. |
CLAIMS AND LAWSUITS
CLAIMS AND LAWSUITS | 6 Months Ended |
Jun. 30, 2019 | |
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 (“NPA”), as described in our Annual Report. 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, but are subject to significant uncertainty regarding numerous factors that could affect the ultimate loss levels. 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. Given the inherent uncertainties involved in these matters, especially those involving governmental agencies, and the indeterminate damages sought in some of these matters, there is significant uncertainty as to the ultimate liability we may incur from these matters, and an adverse outcome in one or more of these matters could be material to our results of operations or cash flows for any particular reporting period. Shareholder Derivative Litigation In January 2017, the Dallas County District Court consolidated two previously disclosed shareholder derivative lawsuits filed on behalf of the Company by purported shareholders of the Company’s common stock 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. The consolidated shareholder derivative petition alleged 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 alleged 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 claimed 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, in July 2018, the defendants filed pleadings seeking dismissal of the lawsuit. In October 2018, the judge granted defendants’ motion to dismiss, but also agreed to give the plaintiffs 30 days to replead their complaint. In January 2019, the court issued a final judgment and order of dismissal after the plaintiffs elected not to replead. In February 2019, the plaintiffs filed an appeal of the court’s ruling that dismissal was appropriate because the plaintiffs failed to adequately plead that a pre-suit demand on the Company’s board of directors, a precondition to their action, should be excused as futile. 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 alleged 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 sought unspecified damages (subject to trebling under federal law), interest, costs and attorneys’ fees. In January 2019, the district court issued an opinion denying the plaintiffs’ motion for class certification. The plaintiffs’ subsequent appeal of the district court’s decision to the U.S. Court of Appeals for the Fifth Circuit was denied on March 26, 2019. On April 30, 2019, the appellate court denied the plaintiffs’ request for further review of the district court’s ruling. The district court has ordered the plaintiffs to advise the court by August 6, 2019 if they will be dismissing the action or proceeding with the individually named plaintiffs. If necessary, we will continue to vigorously defend against the plaintiffs’ allegations. Government Investigation of Detroit Medical Center Detroit Medical Center (“DMC”) is subject to an ongoing investigation by the U.S. Attorney’s Office for the Eastern District of Michigan and the U.S. Department of Justice (“DOJ”) for potential violations of the Stark law, the Medicare and Medicaid anti-kickback and anti-fraud and abuse amendments codified under Section 1128B(b) of the Social Security Act (the “Anti-kickback Statute”), and the federal False Claims Act (“FCA”) related to DMC’s employment of nurse practitioners and physician assistants (“Mid-Level Practitioners”) from 2006 through 2017. As previously disclosed, a media report was published in August 2017 alleging that 14 Mid-Level Practitioners were terminated by DMC earlier in 2017 due to compliance concerns. We are cooperating with the investigation and continue to produce documents on a schedule agreed upon with the DOJ. Because the government’s review is in its preliminary stages, we are unable to determine the potential exposure, if any, at this time. Oklahoma Surgical Hospital Qui Tam Action In May 2016, a relator filed a qui tam lawsuit under seal in the Western District of Oklahoma against, among other parties, (i) Oklahoma Center for Orthopaedic & Multispecialty Surgery (“OCOM”), a surgical hospital jointly owned by USPI, a healthcare system partner and physicians, (ii) Southwest Orthopaedic Specialists, an independent physician practice group, (iii) Tenet, and (iv) other related entities and individuals. The complaint alleges various violations of the FCA, the Anti-kickback Statute, the Stark law and the Oklahoma Medicaid False Claims Act. In May 2018, Tenet and its affiliates learned that they were parties to the suit when the court unsealed the complaint and the DOJ declined to intervene with respect to the issues involving Tenet, USPI, OCOM and individually named employees. In June 2018, the relator filed an amended complaint more fully describing the claims and adding additional defendants. Tenet, USPI, OCOM and individually named employees filed motions to dismiss the case in October 2018, but the court has not yet ruled on the motions. The litigation is currently stayed until October 2019. Pursuant to the obligations under our NPA, we reported the unsealed qui tam action to the DOJ. At this time, we are investigating the claims contained in the amended complaint and cooperating fully with the DOJ. We anticipate meeting with the DOJ and the Office of Inspector General of the U.S. Department of Health and Human Services in the three months ending September 30, 2019 to begin discussing potential resolution of these matters. Because these proceedings and investigations remain at a preliminary stage, we are unable to predict with any certainty the terms, or potential impact on our business or financial condition, of any potential resolution of these matters. Other Matters On July 1, 2019, certain of the entities that purchased the operations of Hahnemann University Hospital and St. Christopher’s Hospital for Children in Philadelphia from us commenced Chapter 11 bankruptcy proceedings. As previously disclosed in our Form 8-K filed September 1, 2017, the purchasers assumed our funding obligations under the Pension Fund for Hospital and Health Care Employees of Philadelphia and Vicinity (the “Fund”), a pension plan related to the operations at Hahnemann University Hospital and, pursuant to rules under the Employee Retirement Income Security Act of 1974, as amended, under certain circumstances we could become liable for withdrawal liability in the event a withdrawal is triggered with respect to the Fund. In July 2019, the Fund notified us of a withdrawal liability assessment of approximately $63 million . We dispute and intend to contest this assessment in accordance with applicable law. We are also subject to 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 in continuing operations during the six months ended June 30, 2019 and 2018 . No amounts were recorded in discontinued operations in those periods. Balances at Beginning of Period Litigation and Investigation Costs Cash Payments Balances at End of Period Six Months Ended June 30, 2019 $ 8 $ 31 $ (24 ) $ 15 Six Months Ended June 30, 2018 $ 12 $ 19 $ (11 ) $ 20 For the six months ended June 30, 2019 and 2018 , we recorded costs of $31 million and $19 million , respectively, in continuing operations in connection with significant legal proceedings and governmental investigations. |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES | 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 six months ended June 30, 2019 and 2018 : Six Months Ended 2019 2018 Balances at beginning of period $ 1,420 $ 1,866 Net income 95 101 Distributions paid to noncontrolling interests (72 ) (70 ) Accretion of redeemable noncontrolling interests 9 160 Purchases and sales of businesses and noncontrolling interests, net 10 (628 ) Balances at end of period $ 1,462 $ 1,429 The following tables show the composition by segment of our redeemable noncontrolling interests balances at June 30, 2019 and December 31, 2018 , as well as our net income available to redeemable noncontrolling interests for the six months ended June 30, 2019 and 2018 : June 30, 2019 December 31, 2018 Hospital Operations and other $ 408 $ 431 Ambulatory Care 737 713 Conifer 317 276 Redeemable noncontrolling interests $ 1,462 $ 1,420 Six Months Ended 2019 2018 Hospital Operations and other $ (15 ) $ (6 ) Ambulatory Care 69 70 Conifer 41 37 Net income available to redeemable noncontrolling interests $ 95 $ 101 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES During the three months ended June 30, 2019 , we recorded income tax expense of $30 million in continuing operations on pre-tax income of $140 million compared to income tax expense of $44 million on pre-tax income of $150 million during the three months ended June 30, 2018 . During the six months ended June 30, 2019 , we recorded income tax expense of $47 million in continuing operations on pre-tax income of $214 million compared to income tax expense of $114 million on pre-tax income of $410 million during the six months ended June 30, 2018 . 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 noncontrolling 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 and the amount calculated at the statutory federal tax rate is shown in the following table: Three Months Ended Six Months Ended 2019 2018 2019 2018 Tax expense at statutory federal rate of 21% $ 29 $ 31 $ 45 $ 86 State income taxes, net of federal income tax benefit 6 7 9 17 Tax attributable to noncontrolling interests (19 ) (16 ) (36 ) (34 ) Nondeductible goodwill — 2 — 7 Nontaxable gains — — (1 ) — Stock-based compensation 1 — — 4 Change in valuation allowance-interest expense limitation 11 18 35 30 Other items 2 2 (5 ) 4 Income tax expense $ 30 $ 44 $ 47 $ 114 During the six months ended June 30, 2019 , there were no adjustments to our estimated liabilities for uncertain tax positions. The total amount of unrecognized tax benefits at June 30, 2019 was $45 million , of which $43 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 June 30, 2019 were $4 million , all of which related to continuing operations. At June 30, 2019 , approximately $10 million of unrecognized federal and state tax benefits, as well as reserves for interest and penalties, may decrease in the next 12 months as a result of the settlement of audits, the filing of amended tax returns or the expiration of statutes of limitations. |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 and 2018 . 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 June 30, 2019 Net income available to Tenet Healthcare Corporation common shareholders $ 15 103,198 $ 0.15 Effect of dilutive stock options, restricted stock units and deferred compensation units — 1,431 (0.01 ) Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share $ 15 104,629 $ 0.14 Three Months Ended June 30, 2018 Net income available to Tenet Healthcare Corporation common shareholders $ 24 102,147 $ 0.23 Effect of dilutive stock options, restricted stock units and deferred compensation units — 2,030 — Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share $ 24 104,177 $ 0.23 Six Months Ended June 30, 2019 Net loss attributable to Tenet Healthcare Corporation common shareholders $ (12 ) 102,993 $ (0.12 ) 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 $ (12 ) 102,993 $ (0.12 ) Six Months Ended June 30, 2018 Net income available to Tenet Healthcare Corporation common shareholders $ 122 101,770 $ 1.20 Effect of dilutive stock options, restricted stock units and deferred compensation units — 1,646 (0.02 ) Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share $ 122 103,416 $ 1.18 All potentially dilutive securities were excluded from the calculation of diluted loss per share for the six months ended June 30, 2019 because we did not report income from continuing operations available to common shareholders in that period. 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 six months ended June 30, 2019 , 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 1,592 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
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 table presents this information and indicates 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. December 31, 2018 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 39 $ — $ 39 $ — Long-lived assets held and used 130 — 130 — 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 June 30, 2019 and December 31, 2018 , the estimated fair value of our long-term debt was approximately 102.1% and 97.3% , respectively, of the carrying value of the debt. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Preliminary purchase price allocations (representing the fair value of the consideration conveyed) for all acquisitions made during the six months ended June 30, 2019 and 2018 are as follows: Six Months Ended 2019 2018 Current assets $ 6 $ 3 Property and equipment 8 3 Other intangible assets 3 3 Goodwill 18 132 Other long-term assets, including previously held equity method investments 5 1 Current liabilities (3 ) (2 ) Long-term liabilities (6 ) (1 ) Redeemable noncontrolling interests in equity of consolidated subsidiaries (9 ) (8 ) Noncontrolling interests (4 ) (42 ) Cash paid, net of cash acquired (13 ) (89 ) Gains on consolidations $ 5 $ — The goodwill generated from these transactions, the majority of which will 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 $18 million from acquisitions completed during the six months ended June 30, 2019 was recorded in our Ambulatory Care segment. Approximately $3 million and $5 million in transaction costs related to prospective and closed acquisitions were expensed during the six month periods ended June 30, 2019 and 2018 , 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 2019 and 2018 acquisitions; therefore, those purchase price allocations are subject to adjustment once the valuations are completed. During the six months ended June 30, 2019 and 2018 , we recognized gains totaling $5 million and less than $1 million , respectively, associated with stepping up our ownership interests in previously held equity method investments, which we began consolidating after we acquired controlling interests. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 , our subsidiaries operated 65 hospitals serving primarily urban and suburban communities in nine 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 June 30, 2019 , USPI had interests in 260 ambulatory surgery centers , 38 urgent care centers operated under the CareSpot brand, 23 imaging centers and 23 surgical hospitals in 27 states . At June 30, 2019 , 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 June 30, 2019 , Conifer provided services to approximately 680 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 June 30, 2019 , 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 in the Condensed Consolidated Statements of Operations, as applicable: June 30, 2019 December 31, 2018 Assets: Hospital Operations and other $ 16,072 $ 15,684 Ambulatory Care 6,057 5,711 Conifer 1,078 1,014 Total $ 23,207 $ 22,409 Three Months Ended Six Months Ended 2019 2018 2019 2018 Capital expenditures: Hospital Operations and other $ 118 $ 108 $ 288 $ 228 Ambulatory Care 21 13 41 28 Conifer 5 4 7 12 Total $ 144 $ 125 $ 336 $ 268 Net operating revenues: Hospital Operations and other total prior to inter-segment eliminations (1) $ 3,827 $ 3,733 $ 7,689 $ 7,680 Ambulatory Care 524 531 1,004 1,029 Conifer Tenet 146 144 292 294 Other customers 209 242 412 496 Total Conifer revenues 355 386 704 790 Inter-segment eliminations (146 ) (144 ) (292 ) (294 ) Total $ 4,560 $ 4,506 $ 9,105 $ 9,205 Equity in earnings of unconsolidated affiliates: Hospital Operations and other $ 8 $ 6 $ 11 $ 4 Ambulatory Care 34 33 65 60 Total $ 42 $ 39 $ 76 $ 64 Adjusted EBITDA (2) : Hospital Operations and other (2) $ 347 $ 345 $ 684 $ 747 Ambulatory Care 207 198 384 363 Conifer 103 91 202 189 Total $ 657 $ 634 $ 1,270 $ 1,299 Depreciation and amortization: Hospital Operations and other $ 185 $ 164 $ 364 $ 339 Ambulatory Care 18 17 36 34 Conifer 11 13 22 25 Total $ 214 $ 194 $ 422 $ 398 Three Months Ended Six Months Ended 2019 2018 2019 2018 Adjusted EBITDA (2) $ 657 $ 634 $ 1,270 $ 1,299 Income (loss) from divested and closed businesses — 1 (1 ) — Depreciation and amortization (214 ) (194 ) (422 ) (398 ) Impairment and restructuring charges, and acquisition-related costs (36 ) (30 ) (55 ) (77 ) Litigation and investigation costs (18 ) (13 ) (31 ) (19 ) Interest expense (247 ) (254 ) (498 ) (509 ) Loss from early extinguishment of debt — (1 ) (47 ) (2 ) Other non-operating expense, net (1 ) (1 ) — (2 ) Net gains (losses) on sales, consolidation and deconsolidation of facilities (1 ) 8 (2 ) 118 Income from continuing operations, before income taxes $ 140 $ 150 $ 214 $ 410 (1) Hospital Operations and other revenues includes health plan revenues of approximately $1 million for both the three and six months ended June 30, 2019 , and less than $1 million and $6 million for the three and six months ended June 30, 2018 , respectively. (2) Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of less than $1 million and $(1) million for the three and six months ended June 30, 2019 , respectively, and $1 million and less than $1 million for the three and six months ended June 30, 2018 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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 national, diversified healthcare services company. We operate regionally focused, integrated healthcare delivery networks, primarily in large urban and suburban markets. Through our subsidiaries, partnerships and joint ventures, including USPI Holding Company, Inc. (“USPI”), at June 30, 2019 , we operated 65 hospitals, 23 surgical hospitals and approximately 480 outpatient centers throughout the United States. In addition, 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, 2018 (“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, 2019, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) using the modified retrospective transition approach as of the period of adoption. Our financial statements for periods prior to January 1, 2019 were not modified for the application of the new lease accounting standard. The main difference between the guidance in ASU 2016-02 and previous accounting principles generally accepted in the United States of America (“GAAP”) is the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under previous GAAP. Upon adoption of ASU 2016-02, we recorded $822 million of right-of-use assets, net of deferred rent, associated with operating leases in investments and other assets in our condensed consolidated balance sheet, $147 million of current liabilities associated with operating leases in other current liabilities in our condensed consolidated balance sheet and $715 million of long-term liabilities associated with operating leases in other long-term liabilities in our condensed consolidated balance sheet. We also recognized $1 million of cumulative effect adjustment that decreased accumulated deficit at January 1, 2019. 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 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 six month periods ended June 30, 2019 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; 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 (losses) from early extinguishment of debt; and changes in occupancy levels and patient volumes. Factors that affect service mix, revenue mix, 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, satisfaction, 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 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. |
Net Operating Revenues | Net Operating Revenues 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. 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. |
Cash and Cash Equivalents | 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 $249 million and $411 million at June 30, 2019 and December 31, 2018 , respectively. At June 30, 2019 and December 31, 2018 , our book overdrafts were $251 million and $288 million , respectively, which were classified as accounts payable. At June 30, 2019 and December 31, 2018 , $156 million and $177 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 $2 million and $8 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 June 30, 2019 and December 31, 2018 , we had $80 million and $135 million , respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $53 million and $114 million , respectively, were included in accounts payable. During the six months ended June 30, 2019 and 2018 , we entered into non-cancellable capital (finance) leases of $58 million and $50 million , respectively. |
Investments in Unconsolidated Affiliates | Investments in Unconsolidated Affiliates We control 232 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 ( 112 of 344 at June 30, 2019 |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018 : Gross Accumulated Net Book At June 30, 2019: Capitalized software costs $ 1,615 $ (881 ) $ 734 Trade names 102 — 102 Contracts 874 (86 ) 788 Other 105 (84 ) 21 Total $ 2,696 $ (1,051 ) $ 1,645 Gross Accumulated Net Book At December 31, 2018: Capitalized software costs $ 1,667 $ (858 ) $ 809 Trade names 102 — 102 Contracts 871 (76 ) 795 Other 104 (79 ) 25 Total $ 2,744 $ (1,013 ) $ 1,731 |
Schedule of estimated future amortization of intangibles with finite useful lives | Estimated future amortization of intangibles with finite useful lives at June 30, 2019 is as follows: Six Months Years Ending Later Years December 31, Total 2019 2020 2021 2022 2023 Amortization of intangible assets $ 964 $ 76 $ 130 $ 115 $ 99 $ 89 $ 455 |
Schedule of equity method investments | Summarized financial information for these equity method investees is included in the following table; among the equity method investees are 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. For investments acquired during the reporting periods, amounts reflect 100% of the investee’s results beginning on the date of our acquisition of the investment. Three Months Ended Six Months Ended 2019 2018 2019 2018 Net operating revenues $ 619 $ 547 $ 1,187 $ 1,121 Net income $ 141 $ 132 $ 291 $ 248 Net income available to the investees $ 87 $ 89 $ 193 $ 160 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Schedule of components of accounts receivable | The principal components of accounts receivable are shown in the table below: June 30, 2019 December 31, 2018 Continuing operations: Patient accounts receivable $ 2,525 $ 2,427 Estimated future recoveries 158 148 Net cost reports and settlements receivable and valuation allowances 49 18 2,732 2,593 Discontinued operations 2 2 Accounts receivable, net $ 2,734 $ 2,595 |
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 uninsured and charity patients in the three and six months ended June 30, 2019 and 2018 : Three Months Ended Six Months Ended 2019 2018 2019 2018 Estimated costs for: Uninsured patients $ 164 $ 159 $ 322 $ 305 Charity care patients 41 28 75 63 Total $ 205 $ 187 $ 397 $ 368 |
CONTRACT BALANCES (Tables)
CONTRACT BALANCES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of opening and closing balances of Company's contract assets | The opening and closing balances of contract assets for our Hospital Operations and other segment are as follows: December 31, 2018 $ 169 June 30, 2019 160 Increase/(decrease) $ (9 ) January 1, 2018 $ 171 June 30, 2018 136 Increase/(decrease) $ (35 ) 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 December 31, 2018 $ 42 $ 11 $ 61 $ 20 June 30, 2019 96 15 67 19 Increase/(decrease) $ 54 $ 4 $ 6 $ (1 ) January 1, 2018 $ 89 $ 10 $ 80 $ 21 June 30, 2018 90 11 78 21 Increase/(decrease) $ 1 $ 1 $ (2 ) $ — |
ASSETS AND LIABILITIES HELD F_2
ASSETS AND LIABILITIES HELD FOR SALE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 January 1, 2018: Three Months Ended Six Months Ended 2019 2018 2019 2018 Significant disposals: Income (loss) from continuing operations, before income taxes Chicago-area (includes a $6 million loss on sale in the 2019 year-to-date period and $17 million of impairment charges in the 2018 year-to-date period) $ 1 $ 1 $ (11 ) $ (15 ) Philadelphia (includes a $2 million loss on sale in the 2018 year-to-date period) — (2 ) 1 (11 ) MacNeal (includes a $95 million gain on sale in the 2018 year-to-date period) 1 (4 ) 2 97 Aspen (includes a $4 million of impairment charges in the 2018 year-to-date period) — (3 ) — — Total $ 2 $ (8 ) $ (8 ) $ 71 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule Of Supplemental Balance Sheet Information Related To Leases | The following table presents the components of our right-of-use assets and liabilities related to leases and their classification in our Condensed Consolidated Balance Sheet at June 30, 2019 : Component of Lease Balances Classification in Condensed Consolidated Balance Sheet June 30, 2019 Assets: Operating lease assets Investments and other assets $ 874 Finance lease assets Property and equipment, at cost, less 439 Total leased assets $ 1,313 Liabilities: Operating lease liabilities: Current Other current liabilities $ 149 Long-term Other long-term liabilities 819 Total operating lease liabilities 968 Finance lease liabilities: Current Current portion of long-term debt 141 Long-term Long-term debt, net of current portion 214 Total finance lease liabilities 355 Total lease liabilities $ 1,323 |
Schedule of Additional Information Related to Lease Expense, Terms and Discount Rates, and Cash Flow Information | The following table presents the components of our lease expense and their classification in our Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2019 : Classification on Condensed Consolidated Three Months Ended Six Months Ended Component of Lease Expense Statements of Operations June 30, 2019 June 30, 2019 Operating lease expense Other operating expenses, net $ 52 $ 102 Finance lease expense: Amortization of leased assets Depreciation and amortization 23 41 Interest on lease liabilities Interest expense 3 8 Total finance lease expense 26 49 Variable and short term-lease expense Other operating expenses, net 33 67 Total lease expense $ 111 $ 218 The weighted-average lease terms and discount rates for operating and finance leases are presented in the following table: June 30, 2019 Weighted-average remaining lease term (years) Operating leases 7.7 Finance leases 6.0 Weighted-average discount rate Operating leases 5.5 % Finance leases 5.6 % Cash flow and other information related to leases is included in the following table: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 95 Operating cash outflows from finance leases $ 9 Financing cash outflows from finance leases $ 75 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 139 Finance leases $ 58 |
Operating Lease Liability Maturity Schedule | Future maturities of lease liabilities at June 30, 2019 are presented in the following table: Operating Leases Finance Leases Total 2019 $ 149 $ 141 $ 290 2020 176 128 304 2021 163 72 235 2022 145 19 164 2023 124 13 137 Later years 492 124 616 Total lease payments 1,249 497 1,746 Less: Imputed interest 281 142 423 Total lease obligations 968 355 1,323 Less: Current obligations 149 141 290 Long-term lease obligations $ 819 $ 214 $ 1,033 |
Finance Lease Liability Maturity Schedule | Future maturities of lease liabilities at June 30, 2019 are presented in the following table: Operating Leases Finance Leases Total 2019 $ 149 $ 141 $ 290 2020 176 128 304 2021 163 72 235 2022 145 19 164 2023 124 13 137 Later years 492 124 616 Total lease payments 1,249 497 1,746 Less: Imputed interest 281 142 423 Total lease obligations 968 355 1,323 Less: Current obligations 149 141 290 Long-term lease obligations $ 819 $ 214 $ 1,033 |
Schedule of Future Minimum Lease Payments for Capital Leases (prior to adoption of ASU 2016-02) | Future maturities of lease liabilities at December 31, 2018 , prior to our adoption of ASU 2016-02, are presented in the following table: Years Ending December 31, Later Years Total 2019 2020 2021 2022 2023 Capital lease obligations $ 425 $ 140 $ 95 $ 57 $ 37 $ 21 $ 75 Long-term non-cancelable operating leases $ 932 $ 171 $ 151 $ 133 $ 113 $ 92 $ 272 |
Schedule of Future Minimum Rental Payments for Operating Leases (prior to adoption of ASU 2016-02) | Future maturities of lease liabilities at December 31, 2018 , prior to our adoption of ASU 2016-02, are presented in the following table: Years Ending December 31, Later Years Total 2019 2020 2021 2022 2023 Capital lease obligations $ 425 $ 140 $ 95 $ 57 $ 37 $ 21 $ 75 Long-term non-cancelable operating leases $ 932 $ 171 $ 151 $ 133 $ 113 $ 92 $ 272 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Long-term Debt and Lease Obligation [Abstract] | |
Summary of long-term debt | The table below shows our long-term debt at June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 Senior unsecured notes: 5.500% due 2019 $ — $ 468 6.750% due 2020 — 300 8.125% due 2022 2,800 2,800 6.750% due 2023 1,872 1,872 7.000% due 2025 478 478 6.875% due 2031 362 362 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 5.125% due 2025 1,410 1,410 6.250% due 2027 1,500 — Credit facility due 2020 190 — Finance leases and mortgage notes 467 500 Unamortized issue costs and note discounts (173 ) (184 ) Total long-term debt 14,976 14,826 Less current portion 664 182 Long-term debt, net of current portion $ 14,312 $ 14,644 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Defined Benefit Plan [Abstract] | |
Summary of stock option activity | The following table summarizes stock option activity during the six months ended June 30, 2019 : Options Weighted Average Aggregate Weighted Average (In Millions) Outstanding at December 31, 2018 2,262,743 $ 19.12 Granted 230,713 28.28 Exercised (76,159 ) 4.56 Forfeited/Expired (120,871 ) 19.25 Outstanding at June 30, 2019 2,296,426 $ 20.52 $ 3 6.4 years Vested and expected to vest at June 30, 2019 2,296,426 $ 20.52 $ 3 6.4 years Exercisable at June 30, 2019 684,628 $ 19.03 $ 2 3.1 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: February 27, 2019 February 28, 2018 Expected volatility 48% 46% Expected dividend yield 0% 0% Expected life 6.2 years 6.2 years Expected forfeiture rate 0% 0% Risk-free interest rate 2.53% 2.72% |
Summary of information about stock options by range of exercise prices | The following table summarizes information about our outstanding stock options at June 30, 2019 : Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted Average Weighted Average Number of Weighted Average $16.43 to $19.759 1,246,675 5.7 years 18.15 413,960 16.46 $19.76 to $35.430 1,049,751 7.1 years 23.33 270,668 22.94 2,296,426 6.4 years $ 20.52 684,628 $ 19.03 |
Summary of restricted stock unit activity | The following table summarizes restricted stock unit activity during the six months ended June 30, 2019 : Restricted Stock Units Weighted Average Grant Unvested at December 31, 2018 1,884,130 $ 32.25 Granted 1,235,876 26.20 Vested (817,820 ) 27.55 Forfeited (298,680 ) 25.02 Unvested at June 30, 2019 2,003,506 $ 31.52 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in consolidated equity | The following tables show the changes in consolidated equity during the six months ended June 30, 2019 and 2018 (dollars in millions, share amounts in thousands): Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2018 102,537 $ 7 $ 4,747 $ (223 ) $ (2,236 ) $ (2,414 ) $ 806 $ 687 Net income (loss) — — — — (19 ) — 37 18 Distributions paid to noncontrolling interests — — — — — — (37 ) (37 ) Other comprehensive income — — — 2 — — — 2 Accretion of redeemable noncontrolling interests — — (5 ) — — — — (5 ) Purchases (sales) of businesses and noncontrolling interests — — (2 ) — — — 2 — Cumulative effect of accounting change — — — — 1 — — 1 Stock-based compensation expense, tax benefit and issuance of common stock 543 — 8 — — — — 8 Balances at March 31, 2019 103,080 $ 7 $ 4,748 $ (221 ) $ (2,254 ) $ (2,414 ) $ 808 $ 674 Net income — — — — 17 — 47 64 Distributions paid to noncontrolling interests — — — — — — (35 ) (35 ) Other comprehensive income — — — 2 — — — 2 Accretion of redeemable noncontrolling interests — — (4 ) — — — — (4 ) Purchases of businesses and noncontrolling interests — — — — — — 5 5 Stock-based compensation expense, tax benefit and issuance of common stock 256 — 11 — — — — 11 Balances at June 30, 2019 103,336 $ 7 $ 4,755 $ (219 ) $ (2,237 ) $ (2,414 ) $ 825 $ 717 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 ) 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 OPERATING REVENUES (Tables)
NET OPERATING REVENUES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 from continuing operations: Three Months Ended Six Months Ended 2019 2018 2019 2018 Hospital Operations and other: Net patient service revenues from hospitals and related outpatient facilities Medicare $ 721 $ 701 $ 1,479 $ 1,483 Medicaid 316 314 630 635 Managed care 2,330 2,273 4,684 4,641 Uninsured 11 8 12 45 Indemnity and other 169 147 324 282 Total 3,547 3,443 7,129 7,086 Physician practices revenues 282 271 552 551 Health plans 1 — 1 6 Revenue from other sources (3 ) 19 7 37 Hospital Operations and other total prior to inter-segment eliminations 3,827 3,733 7,689 7,680 Ambulatory Care 524 531 1,004 1,029 Conifer 355 386 704 790 Inter-segment eliminations (146 ) (144 ) (292 ) (294 ) Net operating revenues $ 4,560 $ 4,506 $ 9,105 $ 9,205 The table below shows the composition of net operating revenues for our Ambulatory Care segment: Three Months Ended Six Months Ended 2019 2018 2019 2018 Net patient service revenues $ 496 $ 500 $ 947 $ 969 Management fees 23 23 46 46 Revenue from other sources 5 8 11 14 Net operating revenues $ 524 $ 531 $ 1,004 $ 1,029 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Six Months Ended 2019 2018 2019 2018 Revenue cycle services – Tenet $ 142 $ 139 $ 284 $ 283 Revenue cycle services – other customers 187 220 367 452 Other services – Tenet 4 5 8 11 Other services – other customers 22 22 45 44 Net operating revenues $ 355 $ 386 $ 704 $ 790 |
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 primarily 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 Common Spirit, 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 Common Spirit ends in 2032. Six Months Years Ending Later Years December 31, Total 2019 2020 2021 2022 2023 Performance obligations $ 7,587 $ 298 $ 597 $ 594 $ 594 $ 594 $ 4,910 |
CLAIMS AND LAWSUITS (Tables)
CLAIMS AND LAWSUITS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 in continuing operations during the six months ended June 30, 2019 and 2018 . No amounts were recorded in discontinued operations in those periods. Balances at Beginning of Period Litigation and Investigation Costs Cash Payments Balances at End of Period Six Months Ended June 30, 2019 $ 8 $ 31 $ (24 ) $ 15 Six Months Ended June 30, 2018 $ 12 $ 19 $ (11 ) $ 20 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 and 2018 : Six Months Ended 2019 2018 Balances at beginning of period $ 1,420 $ 1,866 Net income 95 101 Distributions paid to noncontrolling interests (72 ) (70 ) Accretion of redeemable noncontrolling interests 9 160 Purchases and sales of businesses and noncontrolling interests, net 10 (628 ) Balances at end of period $ 1,462 $ 1,429 The following tables show the composition by segment of our redeemable noncontrolling interests balances at June 30, 2019 and December 31, 2018 , as well as our net income available to redeemable noncontrolling interests for the six months ended June 30, 2019 and 2018 : June 30, 2019 December 31, 2018 Hospital Operations and other $ 408 $ 431 Ambulatory Care 737 713 Conifer 317 276 Redeemable noncontrolling interests $ 1,462 $ 1,420 Six Months Ended 2019 2018 Hospital Operations and other $ (15 ) $ (6 ) Ambulatory Care 69 70 Conifer 41 37 Net income available to redeemable noncontrolling interests $ 95 $ 101 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 and the amount calculated at the statutory federal tax rate is shown in the following table: Three Months Ended Six Months Ended 2019 2018 2019 2018 Tax expense at statutory federal rate of 21% $ 29 $ 31 $ 45 $ 86 State income taxes, net of federal income tax benefit 6 7 9 17 Tax attributable to noncontrolling interests (19 ) (16 ) (36 ) (34 ) Nondeductible goodwill — 2 — 7 Nontaxable gains — — (1 ) — Stock-based compensation 1 — — 4 Change in valuation allowance-interest expense limitation 11 18 35 30 Other items 2 2 (5 ) 4 Income tax expense $ 30 $ 44 $ 47 $ 114 |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 and 2018 . 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 June 30, 2019 Net income available to Tenet Healthcare Corporation common shareholders $ 15 103,198 $ 0.15 Effect of dilutive stock options, restricted stock units and deferred compensation units — 1,431 (0.01 ) Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share $ 15 104,629 $ 0.14 Three Months Ended June 30, 2018 Net income available to Tenet Healthcare Corporation common shareholders $ 24 102,147 $ 0.23 Effect of dilutive stock options, restricted stock units and deferred compensation units — 2,030 — Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share $ 24 104,177 $ 0.23 Six Months Ended June 30, 2019 Net loss attributable to Tenet Healthcare Corporation common shareholders $ (12 ) 102,993 $ (0.12 ) 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 $ (12 ) 102,993 $ (0.12 ) Six Months Ended June 30, 2018 Net income available to Tenet Healthcare Corporation common shareholders $ 122 101,770 $ 1.20 Effect of dilutive stock options, restricted stock units and deferred compensation units — 1,646 (0.02 ) Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share $ 122 103,416 $ 1.18 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table presents this information and indicates 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. December 31, 2018 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 39 $ — $ 39 $ — Long-lived assets held and used 130 — 130 — |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 and 2018 are as follows: Six Months Ended 2019 2018 Current assets $ 6 $ 3 Property and equipment 8 3 Other intangible assets 3 3 Goodwill 18 132 Other long-term assets, including previously held equity method investments 5 1 Current liabilities (3 ) (2 ) Long-term liabilities (6 ) (1 ) Redeemable noncontrolling interests in equity of consolidated subsidiaries (9 ) (8 ) Noncontrolling interests (4 ) (42 ) Cash paid, net of cash acquired (13 ) (89 ) Gains on consolidations $ 5 $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 in the Condensed Consolidated Statements of Operations, as applicable: June 30, 2019 December 31, 2018 Assets: Hospital Operations and other $ 16,072 $ 15,684 Ambulatory Care 6,057 5,711 Conifer 1,078 1,014 Total $ 23,207 $ 22,409 |
Reconciliation of other significant reconciling items from segments to consolidated | Three Months Ended Six Months Ended 2019 2018 2019 2018 Capital expenditures: Hospital Operations and other $ 118 $ 108 $ 288 $ 228 Ambulatory Care 21 13 41 28 Conifer 5 4 7 12 Total $ 144 $ 125 $ 336 $ 268 Net operating revenues: Hospital Operations and other total prior to inter-segment eliminations (1) $ 3,827 $ 3,733 $ 7,689 $ 7,680 Ambulatory Care 524 531 1,004 1,029 Conifer Tenet 146 144 292 294 Other customers 209 242 412 496 Total Conifer revenues 355 386 704 790 Inter-segment eliminations (146 ) (144 ) (292 ) (294 ) Total $ 4,560 $ 4,506 $ 9,105 $ 9,205 Equity in earnings of unconsolidated affiliates: Hospital Operations and other $ 8 $ 6 $ 11 $ 4 Ambulatory Care 34 33 65 60 Total $ 42 $ 39 $ 76 $ 64 Adjusted EBITDA (2) : Hospital Operations and other (2) $ 347 $ 345 $ 684 $ 747 Ambulatory Care 207 198 384 363 Conifer 103 91 202 189 Total $ 657 $ 634 $ 1,270 $ 1,299 Depreciation and amortization: Hospital Operations and other $ 185 $ 164 $ 364 $ 339 Ambulatory Care 18 17 36 34 Conifer 11 13 22 25 Total $ 214 $ 194 $ 422 $ 398 Three Months Ended Six Months Ended 2019 2018 2019 2018 Adjusted EBITDA (2) $ 657 $ 634 $ 1,270 $ 1,299 Income (loss) from divested and closed businesses — 1 (1 ) — Depreciation and amortization (214 ) (194 ) (422 ) (398 ) Impairment and restructuring charges, and acquisition-related costs (36 ) (30 ) (55 ) (77 ) Litigation and investigation costs (18 ) (13 ) (31 ) (19 ) Interest expense (247 ) (254 ) (498 ) (509 ) Loss from early extinguishment of debt — (1 ) (47 ) (2 ) Other non-operating expense, net (1 ) (1 ) — (2 ) Net gains (losses) on sales, consolidation and deconsolidation of facilities (1 ) 8 (2 ) 118 Income from continuing operations, before income taxes $ 140 $ 150 $ 214 $ 410 (1) Hospital Operations and other revenues includes health plan revenues of approximately $1 million for both the three and six months ended June 30, 2019 , and less than $1 million and $6 million for the three and six months ended June 30, 2018 , respectively. (2) Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of less than $1 million and $(1) million for the three and six months ended June 30, 2019 , respectively, and $1 million and less than $1 million for the three and six months ended June 30, 2018 , respectively. |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019USD ($)hospitalcenter | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | |
Business Acquisition | |||
Number of hospitals operated by subsidiaries | hospital | 65 | ||
Number of outpatient centers | center | 480 | ||
Operating lease, right-of-use assets | $ 874 | $ 822 | |
Operating lease liability, current | 149 | 147 | |
Operating lease liabilities, long-term | $ 819 | 715 | |
Cumulative effect of accounting change | 1 | $ 0 | |
United Surgical Partners International | |||
Business Acquisition | |||
Number of surgical hospitals | hospital | 23 | ||
Accounting Standards Update 2016-02 | |||
Business Acquisition | |||
Cumulative effect of accounting change | $ 1 |
BASIS OF PRESENTATION - Cash an
BASIS OF PRESENTATION - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Cash and Cash Equivalents | |||
Cash and cash equivalents | $ 249 | $ 411 | |
Accrued property and equipment purchases for items received but not yet paid | 80 | 135 | |
Non-cancellable capital (finance leases) entered into | 58 | $ 50 | |
Captive insurance subsidiaries | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents | 156 | 177 | |
Health plan-related businesses | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents | 2 | 8 | |
Accounts payable | |||
Cash and Cash Equivalents | |||
Book overdrafts classified as accounts payable | 251 | 288 | |
Accrued property and equipment purchases for items received but not yet paid | $ 53 | $ 114 |
BASIS OF PRESENTATION - Other I
BASIS OF PRESENTATION - Other Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Other intangible assets | ||
Gross Carrying Amount | $ 2,696 | $ 2,744 |
Accumulated Amortization | (1,051) | (1,013) |
Net Book Value | 1,645 | 1,731 |
Capitalized software costs | ||
Other intangible assets | ||
Gross Carrying Amount | 1,615 | 1,667 |
Accumulated Amortization | (881) | (858) |
Net Book Value | 734 | 809 |
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 | 874 | 871 |
Accumulated Amortization | (86) | (76) |
Net Book Value | 788 | 795 |
Other | ||
Other intangible assets | ||
Gross Carrying Amount | 105 | 104 |
Accumulated Amortization | (84) | (79) |
Net Book Value | $ 21 | $ 25 |
BASIS OF PRESENTATION - Amortiz
BASIS OF PRESENTATION - Amortization of Intangible Assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Amortization of intangible assets | ||
Total | $ 964 | |
Six months ending 2019 | 76 | |
Year Ending 2020 | 130 | |
Year Ending 2021 | 115 | |
Year Ending 2022 | 99 | |
Year Ending 2023 | 89 | |
Later Years | 455 | |
Amortization expense | $ 90 | $ 89 |
BASIS OF PRESENTATION - Investm
BASIS OF PRESENTATION - Investments in Unconsolidated Affiliates (Details) $ in Millions | Mar. 01, 2018hospital | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)hospital | Jun. 30, 2018USD ($) |
Schedule of Equity Method Investments [Line Items] | |||||
Investee results reflected | 1 | ||||
Net operating revenues | $ | $ 619 | $ 547 | $ 1,187 | $ 1,121 | |
Net income | $ | 141 | 132 | 291 | 248 | |
Net income available to the investees | $ | $ 87 | $ 89 | $ 193 | $ 160 | |
Ambulatory Care | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of outpatient centers recorded not using equity method | 232 | ||||
Number of outpatient centers recorded using equity method | 112 | ||||
Number of outpatient centers | 344 | ||||
Hospital Operations and other | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Number of hospitals recorded using equity method | 4 |
ACCOUNTS RECEIVABLE - Component
ACCOUNTS RECEIVABLE - Components (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable and allowance for doubtful accounts | ||
Accounts receivable, net | $ 2,734 | $ 2,595 |
Continuing Operations | ||
Accounts receivable and allowance for doubtful accounts | ||
Patient accounts receivable | 2,525 | 2,427 |
Estimated future recoveries | 158 | 148 |
Net cost reports and settlements receivable and valuation allowances | 49 | 18 |
Accounts receivable, net | 2,732 | 2,593 |
Discontinued operations | ||
Accounts receivable and allowance for doubtful accounts | ||
Accounts receivable, net | $ 2 | $ 2 |
ACCOUNTS RECEIVABLE - Narrative
ACCOUNTS RECEIVABLE - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable and allowance for doubtful accounts | ||
Receivables | $ 2,734 | $ 2,595 |
Payables | 1,088 | 1,207 |
California's Provider Fee Program | Other current assets | ||
Accounts receivable and allowance for doubtful accounts | ||
Receivables | 297 | 278 |
California's Provider Fee Program | Other assets | ||
Accounts receivable and allowance for doubtful accounts | ||
Receivables | 149 | 231 |
California's Provider Fee Program | Other current liabilities | ||
Accounts receivable and allowance for doubtful accounts | ||
Payables | 91 | 100 |
California's Provider Fee Program | Other long-term liabilities | ||
Accounts receivable and allowance for doubtful accounts | ||
Payables | $ 29 | $ 42 |
ACCOUNTS RECEIVABLE - Allowance
ACCOUNTS RECEIVABLE - Allowance (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounts receivable and allowance for doubtful accounts | ||||
Estimated costs of caring | $ 205 | $ 187 | $ 397 | $ 368 |
Uninsured patients | ||||
Accounts receivable and allowance for doubtful accounts | ||||
Estimated costs of caring | 164 | 159 | 322 | 305 |
Charity care patients | ||||
Accounts receivable and allowance for doubtful accounts | ||||
Estimated costs of caring | $ 41 | $ 28 | $ 75 | $ 63 |
CONTRACT BALANCES - Hospital Op
CONTRACT BALANCES - Hospital Operations and Other Segment (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Receivables | ||
Percentage of contract assets that meet the conditions for unconditional right to payment payment (percentage) | 89.00% | |
Hospital Operations And Other Total Prior To Inter-Segment Eliminations | ||
Receivables | ||
Balance at beginning of period | $ 169 | $ 171 |
Balance at end of period | 160 | 136 |
Increase/(decrease) | $ (9) | $ (35) |
CONTRACT BALANCES - Conifer Seg
CONTRACT BALANCES - Conifer Segment (Details) - Conifer - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Receivables | ||
Beginning balance | $ 42 | $ 89 |
Ending balance | 96 | 90 |
Increase/(decrease) | 54 | 1 |
Contract Asset-Unbilled Revenue | ||
Beginning balance | 11 | 10 |
Ending balance | 15 | 11 |
Increase/(decrease) | 4 | 1 |
Contract Liability-Current Deferred Revenue | ||
Balance at beginning of period | 61 | 80 |
Balance at end of period | 67 | 78 |
Contract Liability-Long-term Deferred Revenue | ||
Balance at beginning of period | 20 | 21 |
Balance at end of period | 19 | 21 |
Amount of revenue recognized included in current deferred revenue liability | 56 | 66 |
Long-term Contract with Customer | ||
Contract Liability-Current Deferred Revenue | ||
Increase/(decrease) | (1) | 0 |
Contract Liability-Long-term Deferred Revenue | ||
Increase/(decrease) | (1) | 0 |
Short-term Contract with Customer | ||
Contract Liability-Current Deferred Revenue | ||
Increase/(decrease) | 6 | (2) |
Contract Liability-Long-term Deferred Revenue | ||
Increase/(decrease) | $ 6 | $ (2) |
CONTRACT BALANCES - Contract Co
CONTRACT BALANCES - Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||||
Amortization expense | $ 1 | $ 3 | $ 2 | $ 6 | |
Unamortized customer contract costs | $ 27 | $ 27 | $ 28 |
ASSETS AND LIABILITIES HELD F_3
ASSETS AND LIABILITIES HELD FOR SALE (Details) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018USD ($) | Dec. 31, 2017hospital | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Current Assets and Liabilities Held for Sale | |||||
Assets held for sale | $ 0 | ||||
Liabilities held for sale | 0 | ||||
Impairment charges | $ 5,000,000 | $ 23,000,000 | |||
Chicago-area | |||||
Current Assets and Liabilities Held for Sale | |||||
Assets held for sale | $ 107,000,000 | ||||
Liabilities held for sale | $ 43,000,000 | ||||
Impairment charges | $ 17,000,000 | ||||
Chicago-area | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Current Assets and Liabilities Held for Sale | |||||
Number of hospitals | hospital | 3 |
ASSETS AND LIABILITIES HELD F_4
ASSETS AND LIABILITIES HELD FOR SALE - Significant Disposals (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Impairment charges | $ 5 | $ 23 | |||
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 | $ 2 | $ (8) | (8) | 71 | |
Chicago-area | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Impairment charges | $ 17 | ||||
Chicago-area | 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 | 1 | (11) | (15) | |
Gain (loss) on disposition of business | (6) | ||||
Impairment charges | 17 | ||||
Philadelphia | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain (loss) on disposition of business | (2) | ||||
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 | 0 | (2) | 1 | (11) | |
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 | 1 | (4) | 2 | 97 | |
Gain (loss) on disposition of business | 95 | ||||
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 | $ 0 | $ (3) | $ 0 | 0 | |
Impairment charges | $ 4 |
IMPAIRMENT AND RESTRUCTURING _2
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net impairment and restructuring charges and acquisition-related costs | $ 55 | $ 77 | |
Impairment charges | 5 | 23 | |
Restructuring charges | 47 | 47 | |
Acquisition costs | 3 | 7 | |
Employee severance costs | 18 | 26 | |
Contract and lease termination costs | 2 | 5 | |
Other restructuring costs | 27 | 16 | |
Acquisition-related transaction costs | $ 3 | 5 | |
Acquisition integration charges | 2 | ||
Other impairment charges | 2 | ||
Number of operating segments | segment | 3 | ||
Chicago-area | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment charges | $ 17 | ||
Charges to write-down assets held for sale to their estimated fair value | 17 | ||
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 | 4 | ||
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 | $ 4 | 19 | |
Ambulatory Care Segment | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net impairment and restructuring charges and acquisition-related costs | $ 1 | $ 4 |
LEASES - Balance Sheet Compone
LEASES - Balance Sheet Components (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Operating lease assets | $ 874 | $ 822 |
Finance lease assets | 439 | |
Total leased assets | 1,313 | |
Operating lease liability, current | 149 | 147 |
Operating lease liabilities, long-term | 819 | $ 715 |
Total operating lease liabilities | 968 | |
Finance lease liabilities, current | 141 | |
Finance lease liabilities, long-term | 214 | |
Total finance lease liabilities | 355 | |
Total lease obligations | $ 1,323 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Finite-lived intangible asset, useful life | 15 years |
Finance lease renewal term | 5 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Finance lease renewal term | 10 years |
Real Estate | Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract | 5 years |
Real Estate | Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract | 10 years |
Equipment | Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease renewal term | 3 years |
Medical Equipment | |
Lessee, Lease, Description [Line Items] | |
Finance lease, term of contract | 3 years |
Useful life | 5 years |
Medical Equipment | Minimum | |
Lessee, Lease, Description [Line Items] | |
Useful life | 7 years |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating lease expense | $ 52 | $ 102 |
Finance lease expense: | ||
Amortization of leased assets | 23 | 41 |
Interest on lease liabilities | 3 | 8 |
Total finance lease expense | 26 | 49 |
Variable and short term-lease expense | 33 | 67 |
Total lease expense | $ 111 | $ 218 |
Weighted-average remaining lease term, operating leases (years) | 7 years 8 months 12 days | 7 years 8 months 12 days |
Weighted-average remaining lease term, finance leases (years) | 6 years | 6 years |
Weighted-average discount rate, operating leases (percentage) | 5.50% | 5.50% |
Weighted-average discount rate, finance leases (percentage) | 5.60% | 5.60% |
LEASES - Supplemental Cash Flo
LEASES - Supplemental Cash Flow Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cash Paid For Amounts Included In The Measurement Of Lease Liabilities [Abstract] | |
Operating cash outflows from operating leases | $ 95 |
Operating cash outflows from finance leases | 9 |
Financing cash outflows from finance leases | 75 |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases | 139 |
Finance leases | $ 58 |
LEASES - Schedule of Lease Matu
LEASES - Schedule of Lease Maturities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 |
Operating Leases | ||
2019 | $ 149 | |
2020 | 176 | |
2021 | 163 | |
2022 | 145 | |
2023 | 124 | |
Later years | 492 | |
Total lease payments | 1,249 | |
Less: Imputed interest | 281 | |
Total operating lease liabilities | 968 | |
Less: Current obligations | 149 | $ 147 |
Long-term lease obligations | 819 | $ 715 |
Finance Leases | ||
2019 | 141 | |
2020 | 128 | |
2021 | 72 | |
2022 | 19 | |
2023 | 13 | |
Later years | 124 | |
Total lease payments | 497 | |
Less: Imputed interest | 142 | |
Total finance lease liabilities | 355 | |
Less: Current obligations | 141 | |
Long-term lease obligations | 214 | |
Total | ||
2019 | 290 | |
2020 | 304 | |
2021 | 235 | |
2022 | 164 | |
2023 | 137 | |
Later years | 616 | |
Total lease payments | 1,746 | |
Less: Imputed interest | 423 | |
Total lease obligations | 1,323 | |
Less: Current obligations | 290 | |
Long-term lease obligations | $ 1,033 |
LEASES - Lease Obligations Prio
LEASES - Lease Obligations Prior to Adoption of ASU 2016-02 (Details) $ in Millions | Dec. 31, 2018USD ($) |
Capital lease obligations | |
Total | $ 425 |
2019 | 140 |
2020 | 95 |
2021 | 57 |
2022 | 37 |
2023 | 21 |
Later Years | 75 |
Long-term non-cancelable operating leases | |
Total | 932 |
2019 | 171 |
2020 | 151 |
2021 | 133 |
2022 | 113 |
2023 | 92 |
Later Years | $ 272 |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Feb. 05, 2019 | Dec. 31, 2018 |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Finance leases and mortgage notes | $ 467 | $ 500 | |
Unamortized issue costs and note discounts | (173) | (184) | |
Total long-term debt | 14,976 | 14,826 | |
Less current portion | 664 | 182 | |
Long-term debt, net of current portion | 14,312 | 14,644 | |
5.500% due 2019 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Stated interest rate, percentage | 5.50% | ||
7.500% due 2022 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Stated interest rate, percentage | 7.50% | ||
6.250% due 2027 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Stated interest rate, percentage | 6.25% | ||
Senior Notes | 5.500% due 2019 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 0 | 468 | |
Stated interest rate, percentage | 5.50% | ||
Senior Notes | 6.750% due 2020 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 0 | 300 | |
Stated interest rate, percentage | 6.75% | 6.75% | |
Senior Notes | 8.125% due 2022 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 2,800 | 2,800 | |
Stated interest rate, percentage | 8.125% | ||
Senior Notes | 6.750% due 2023 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 1,872 | 1,872 | |
Stated interest rate, percentage | 6.75% | ||
Senior Notes | 7.000% due 2025 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 478 | 478 | |
Stated interest rate, percentage | 7.00% | ||
Senior Notes | 6.875% due 2031 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 362 | 362 | |
Stated interest rate, percentage | 6.875% | ||
Senior Notes | 4.750% due 2020 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 500 | 500 | |
Stated interest rate, percentage | 4.75% | ||
Senior Notes | 6.000% due 2020 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 1,800 | 1,800 | |
Stated interest rate, percentage | 6.00% | ||
Senior Notes | 4.500% due 2021 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 850 | 850 | |
Stated interest rate, percentage | 4.50% | ||
Senior Notes | 4.375% due 2021 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 1,050 | 1,050 | |
Stated interest rate, percentage | 4.375% | ||
Senior Notes | 4.625% due 2024 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 1,870 | 1,870 | |
Stated interest rate, percentage | 4.625% | ||
Senior Notes | 7.500% due 2022 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 0 | 750 | |
Stated interest rate, percentage | 7.50% | ||
Senior Notes | 5.125% due 2025 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 1,410 | 1,410 | |
Stated interest rate, percentage | 5.125% | ||
Senior Notes | 6.250% due 2027 | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 1,500 | 0 | |
Stated interest rate, percentage | 6.25% | ||
Letter of Credit Facility | |||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||
Carrying amount | $ 190 | $ 0 |
LONG-TERM DEBT - Senior Secured
LONG-TERM DEBT - Senior Secured and Senior Secured Notes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Feb. 05, 2019 | |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||||||
Loss from early extinguishment of debt | $ 0 | $ 47,000,000 | $ 1,000,000 | $ 47,000,000 | $ 2,000,000 | |
6.250% due 2027 | ||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||||||
Stated interest rate, percentage | 6.25% | |||||
7.500% due 2022 | ||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||||||
Stated interest rate, percentage | 7.50% | |||||
5.500% due 2019 | ||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||||||
Stated interest rate, percentage | 5.50% | |||||
Senior Notes | 6.250% due 2027 | ||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||||||
Long term debt, face amount | $ 1,500,000,000 | |||||
Stated interest rate, percentage | 6.25% | 6.25% | ||||
Senior Notes | 6.750% due 2020 | ||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||||||
Stated interest rate, percentage | 6.75% | 6.75% | 6.75% | |||
Repurchased face amount | $ 300,000,000 | |||||
Senior Notes | 7.500% due 2022 | ||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||||||
Stated interest rate, percentage | 7.50% | 7.50% | ||||
Repurchased face amount | 750,000,000 | |||||
Senior Notes | 5.500% due 2019 | ||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||||||
Stated interest rate, percentage | 5.50% | 5.50% | ||||
Repurchased face amount | $ 468,000,000 |
LONG-TERM DEBT - Credit Agreeme
LONG-TERM DEBT - Credit Agreement and Letter of Credit Facility (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
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 | |
Interest rate on cash borrowings outstanding under the Credit Agreement (percentage) | 3.77% | |
Standby letters of credit outstanding | $ 2,000,000 | |
Amount available for borrowing under revolving credit facility | $ 808,000,000 | |
Credit Agreement | Minimum | ||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||
Unused commitment fee (percentage) | 0.25% | |
Credit Agreement | Maximum | ||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||
Unused commitment fee (percentage) | 0.375% | |
Credit Agreement | Base rate | Minimum | ||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||
Margin on variable rate (percentage) | 0.25% | |
Credit Agreement | Base rate | Maximum | ||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||
Margin on variable rate (percentage) | 0.75% | |
Credit Agreement | LIBOR | Minimum | ||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||
Margin on variable rate (percentage) | 1.25% | |
Credit Agreement | LIBOR | Maximum | ||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||
Margin on variable rate (percentage) | 1.75% | |
Letter of Credit Facility | ||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ||
Revolving credit facility, maximum borrowing capacity (up to) | $ 180,000,000 | |
Carrying amount | 190,000,000 | $ 0 |
Standby letters of credit outstanding | 100,000,000 | |
Borrowing capacity after increase subject to certain conditions (up to) | $ 200,000,000 | |
Unused commitment fee after step down (up to) (percentage) | 0.50% | |
Secured debt to EBITDA ratio | 3 | |
Issuance fee (percentage) | 1.50% | |
Issuance fee, based on face amount (percentage) | 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 |
GUARANTEES (Details)
GUARANTEES (Details) $ in Millions | Jun. 30, 2019USD ($) |
Income and Revenue Collection Guarantee | |
GUARANTEES | |
Maximum potential amount of future payments under guarantees | $ 138 |
Income and Revenue Collection Guarantee | Other current liabilities | |
GUARANTEES | |
Liability for the fair value of guarantees | 112 |
Guaranteed Investees Of Third Parties | |
GUARANTEES | |
Liability for the fair value of guarantees | 24 |
Guaranteed Investees Of Third Parties | Other current liabilities | |
GUARANTEES | |
Guarantee obligations for consolidated subsidiaries | $ 8 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
EMPLOYEE BENEFIT PLANS | ||
Shares available for issuance under the plan (in shares) | 8,000,000 | |
Shares available assuming maximum performance (in shares) | 7,700,000 | |
Stock-based compensation costs, pretax | $ 23 | $ 20 |
Stock Options | ||
EMPLOYEE BENEFIT PLANS | ||
Expiration period from the date of grant | 10 years | |
Vesting period | 3 years | |
Portion of awards vesting on each of the first three anniversary dates of the grant | 33.33% | |
Restricted Stock Units | ||
EMPLOYEE BENEFIT PLANS | ||
Contractual right to receive shares of common stock for a stock based award (in shares) | 1 | |
Vesting period | 3 years | |
Portion of awards vesting on each of the first three anniversary dates of the grant | 33.33% |
EMPLOYEE BENEFIT PLANS - Stock
EMPLOYEE BENEFIT PLANS - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 29, 2019 | Feb. 27, 2019 | May 31, 2018 | Feb. 28, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Weighted Average Remaining Life | ||||||||
Weighted average estimated fair value of awards granted (in dollars per share) | $ 12.50 | $ 9.16 | ||||||
Stock Options | ||||||||
Options | ||||||||
Outstanding at the beginning of the period (in shares) | 2,262,743 | |||||||
Granted (in shares) | 230,713 | |||||||
Exercised (in shares) | (76,159) | (581,120) | ||||||
Forfeited/Expired (in shares) | (120,871) | |||||||
Outstanding at the end of the period (in shares) | 2,296,426 | |||||||
Vested and expected to vest at the end of the period (in shares) | 2,296,426 | |||||||
Exercisable at the end of the period (in shares) | 684,628 | |||||||
Weighted Average Exercise Price Per Share | ||||||||
Outstanding at the beginning of the period (in dollars per share) | $ 19.12 | |||||||
Granted (in dollars per share) | 28.28 | |||||||
Exercised (in dollars per share) | 4.56 | |||||||
Forfeited/Expired (in dollars per share) | 19.25 | |||||||
Outstanding at the end of the period (in dollars per share) | 20.52 | |||||||
Vested and expected to vest at the end of the period (in dollars per share) | 20.52 | |||||||
Exercisable at the end of the period (in dollars per share) | $ 19.03 | |||||||
Aggregate Intrinsic Value | ||||||||
Outstanding at the end of the period | $ 3 | |||||||
Vested and expected to vest at the end of the period | 3 | |||||||
Exercisable at the end of the period | $ 2 | |||||||
Weighted Average Remaining Life | ||||||||
Outstanding at the end of the period | 6 years 4 months 24 days | |||||||
Vested and expected to vest at the end of the period | 6 years 4 months 24 days | |||||||
Exercisable at the end of the period | 3 years 1 month 6 days | |||||||
Exercised (in shares) | 76,159 | 581,120 | ||||||
Aggregate Intrinsic value of awards exercised | $ 1 | $ 3 | ||||||
Unrecognized compensation costs | $ 6 | |||||||
Period for recognition of unrecognized compensation costs | 1 year 10 months 24 days | |||||||
Assumptions used to calculate fair value of awards granted to top eleven employees | ||||||||
Expected volatility | 48.00% | 46.00% | ||||||
Expected dividend yield | 0.00% | 0.00% | ||||||
Expected life | 6 years 2 months 12 days | 6 years 2 months 12 days | ||||||
Expected forfeiture rate | 0.00% | 0.00% | ||||||
Risk-free interest rate | 2.53% | 2.72% | ||||||
Performance-based Stock Options | Senior Officers | ||||||||
Options | ||||||||
Granted (in shares) | 7,862 | 31,184 | 604,012 | |||||
Weighted Average Remaining Life | ||||||||
Target closing stock price (in dollars per share) | $ 36.05 | $ 44.29 | $ 44.29 | |||||
Stock price premium | 25.00% | 25.00% | ||||||
Share price (in dollars per share) | $ 28.84 | $ 35.43 | ||||||
Vesting date of grant anniversary subject to specific conditions | 3 years | 3 years | ||||||
Number of consecutive trading days (at least) | 20 days | 20 days | 20 days | |||||
Non-Performance Employee Stock Option | Senior Officers | ||||||||
Options | ||||||||
Granted (in shares) | 222,851 | |||||||
Weighted Average Remaining Life | ||||||||
Target closing stock price (in dollars per share) | $ 35.33 | $ 25.75 | $ 25.75 | |||||
Stock price premium | 25.00% | 25.00% | ||||||
Share price (in dollars per share) | $ 28.26 | $ 20.60 | ||||||
Vesting date of grant anniversary subject to specific conditions | 3 years | 3 years | ||||||
Number of consecutive trading days (at least) | 20 days |
EMPLOYEE BENEFIT PLANS - Range
EMPLOYEE BENEFIT PLANS - Range of Exercise Prices (Details) - Stock Options | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 2,296,426 |
Weighted Average Remaining Contractual Life | 6 years 4 months 24 days |
Weighted Average Exercise Price (in dollars per share) | $ 20.52 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 684,628 |
Weighted Average Exercise Price (in dollars per share) | $ 19.03 |
$16.43 to $19.759 | |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 1,246,675 |
Weighted Average Remaining Contractual Life | 5 years 8 months 12 days |
Weighted Average Exercise Price (in dollars per share) | $ 18.15 |
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 | |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 1,049,751 |
Weighted Average Remaining Contractual Life | 7 years 1 month 6 days |
Weighted Average Exercise Price (in dollars per share) | $ 23.33 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 270,668 |
Weighted Average Exercise Price (in dollars per share) | $ 22.94 |
Minimum | $16.43 to $19.759 | |
Summary information about outstanding stock options | |
Exercise price per share, low end of the range (in dollars per share) | 16.43 |
Minimum | $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 |
Maximum | $16.43 to $19.759 | |
Summary information about outstanding stock options | |
Exercise price per share, high end of the range (in dollars per share) | 19.759 |
Maximum | $19.76 to $35.430 | |
Summary information about outstanding stock options | |
Exercise price per share, high end of the range (in dollars per share) | $ 35.430 |
EMPLOYEE BENEFIT PLANS - Restri
EMPLOYEE BENEFIT PLANS - Restricted Stock Units (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | ||
May 31, 2019shares | May 31, 2018membershares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018shares | |
Weighted Average Grant Date Fair Value Per Unit | ||||
Number of new members appointed to the board of directors | member | 2 | |||
Restricted Stock Units | ||||
Restricted Stock Units | ||||
Unvested at the beginning of the period (in shares) | 1,884,130 | |||
Granted (in shares) | 100,444 | 54,198 | 1,235,876 | 730,577 |
Vested | (817,820) | |||
Forfeited (in shares) | (298,680) | |||
Unvested at the end of the period (in shares) | 2,003,506 | |||
Weighted Average Grant Date Fair Value Per Unit | ||||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 32.25 | |||
Granted (in dollars per share) | $ / shares | 26.20 | |||
Vested (in dollars per share) | $ / shares | 27.55 | |||
Forfeited (in dollars per share) | $ / shares | 25.02 | |||
Unvested at the end of the period (in dollars per share) | $ / shares | $ 31.52 | |||
Vesting period | 3 years | |||
Percentage of restricted stock units, which will vest three years from the grant date | 33.33% | |||
Unrecognized compensation costs | $ | $ 34 | |||
Period for recognition of unrecognized compensation costs | 1 year 10 months 24 days | |||
Restricted Stock Units | Time based vesting, three year period from grant date | ||||
Restricted Stock Units | ||||
Granted (in shares) | 243,506 | 288,325 | ||
Restricted Stock Units | Twenty-seven month vesting | ||||
Restricted Stock Units | ||||
Granted (in shares) | 566,172 | |||
Weighted Average Grant Date Fair Value Per Unit | ||||
Vesting period | 27 months | |||
Restricted Stock Units | Vesting and settled ratably over a three-year period from the grant date | ||||
Weighted Average Grant Date Fair Value Per Unit | ||||
Vesting date of grant anniversary subject to specific conditions | 3 years | 3 years | ||
Number of restricted stock units vested on third anniversary of grant date (in shares) | 318,327 | 26,356 | ||
Restricted Stock Units | Time Based Vesting Two Years | ||||
Restricted Stock Units | ||||
Granted (in shares) | 339,806 | |||
Weighted Average Grant Date Fair Value Per Unit | ||||
Vesting period | 2 years | |||
Restricted Stock Units | Time Based Vesting | Director | ||||
Restricted Stock Units | ||||
Granted (in shares) | 12,154 | |||
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% | |||
Restricted Stock Units | Performance Based Vesting | Officer | ||||
Restricted Stock Units | ||||
Granted (in shares) | 6,068 | |||
Additional Prorated Restricted Stock Units [Member] | Time Based Vesting | Director | ||||
Restricted Stock Units | ||||
Granted (in shares) | 3,670 | |||
2013 Grant | Restricted Stock Units | ||||
Restricted Stock Units | ||||
Granted (in shares) | 7,427 |
EMPLOYEE BENEFIT PLANS - Employ
EMPLOYEE BENEFIT PLANS - Employee Retirement Plans (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($)plan | Jun. 30, 2018USD ($) | |
Employee Retirement Plans | ||
Number of frozen plans | plan | 1 | |
Salaries, wages and benefits expense | ||
Employee Retirement Plans | ||
Service costs (less than in current year) | $ 1 | $ 1 |
Other non-operating income (expense), net | ||
Employee Retirement Plans | ||
Other components | $ 11 | $ 8 |
EQUITY - Changes in Shareholder
EQUITY - Changes in Shareholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | Jan. 01, 2018 | |
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | $ 674 | $ 687 | $ 616 | $ 539 | $ 687 | $ 539 | ||
Net income (loss) | 64 | 18 | 68 | 130 | ||||
Distributions paid to noncontrolling interests | (35) | (37) | (38) | (34) | ||||
Other comprehensive income (loss) | 2 | 2 | (4) | 8 | 4 | 4 | ||
Accretion of redeemable noncontrolling interests | (4) | (5) | (123) | (37) | ||||
Purchases (sales) of businesses and noncontrolling interests | 5 | 0 | 43 | (6) | ||||
Cumulative effect of accounting change | $ 1 | $ 0 | ||||||
Stock-based compensation expense, tax benefit and issuance of common stock | 11 | 8 | 14 | 16 | ||||
Balances, end of period | $ 717 | $ 674 | $ 576 | $ 616 | $ 717 | $ 576 | ||
Common Stock | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period (in shares) | 103,080 | 102,537 | 101,989 | 100,972 | 102,537 | 100,972 | ||
Balances, beginning of period | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | ||
Stock-based compensation expense, tax benefit and issuance of common stock (in shares) | 256 | 543 | 312 | 1,017 | ||||
Balances, end of period (in shares) | 103,336 | 103,080 | 102,301 | 101,989 | 103,336 | 102,301 | ||
Balances, end of period | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | ||
Additional Paid-In Capital | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | 4,748 | 4,747 | 4,833 | 4,859 | 4,747 | 4,859 | ||
Accretion of redeemable noncontrolling interests | (4) | (5) | (123) | (37) | ||||
Purchases (sales) of businesses and noncontrolling interests | 0 | (2) | (2) | (4) | ||||
Stock-based compensation expense, tax benefit and issuance of common stock | 11 | 8 | 14 | 15 | ||||
Balances, end of period | 4,755 | 4,748 | 4,722 | 4,833 | 4,755 | 4,722 | ||
Accumulated Other Comprehensive Loss | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (221) | (223) | (239) | (204) | (223) | (204) | ||
Other comprehensive income (loss) | 2 | 2 | (4) | 8 | ||||
Cumulative effect of accounting change | (43) | |||||||
Balances, end of period | (219) | (221) | (243) | (239) | (219) | (243) | ||
Accumulated Deficit | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (2,254) | (2,236) | (2,248) | (2,390) | (2,236) | (2,390) | ||
Net income (loss) | 17 | (19) | 26 | 99 | ||||
Cumulative effect of accounting change | $ 1 | $ 43 | ||||||
Balances, end of period | (2,237) | (2,254) | (2,222) | (2,248) | (2,237) | (2,222) | ||
Treasury Stock | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (2,414) | (2,414) | (2,418) | (2,419) | (2,414) | (2,419) | ||
Stock-based compensation expense, tax benefit and issuance of common stock | 0 | 1 | ||||||
Balances, end of period | (2,414) | (2,414) | (2,418) | (2,418) | (2,414) | (2,418) | ||
Noncontrolling Interests | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | 808 | 806 | 681 | 686 | 806 | 686 | ||
Net income (loss) | 47 | 37 | 42 | 31 | ||||
Distributions paid to noncontrolling interests | (35) | (37) | (38) | (34) | ||||
Purchases (sales) of businesses and noncontrolling interests | 5 | 2 | 45 | (2) | ||||
Balances, end of period | $ 825 | $ 808 | $ 730 | $ 681 | $ 825 | $ 730 |
EQUITY - Changes in Sharehold_2
EQUITY - Changes in Shareholders' Equity - Noncontrolling interests (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Stockholders equity balance | $ 717 | $ 674 | $ 576 | $ 616 | $ 717 | $ 576 | $ 687 | $ 539 |
Net income | 64 | 18 | 68 | 130 | ||||
Noncontrolling Interests | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Stockholders equity balance | 825 | 808 | 730 | 681 | 825 | 730 | 806 | $ 686 |
Net income | 47 | $ 37 | $ 42 | $ 31 | ||||
Noncontrolling Interests | Hospital Operations and other | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Stockholders equity balance | 116 | 116 | 112 | |||||
Net income | 7 | 4 | ||||||
Noncontrolling Interests | Ambulatory Care | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Stockholders equity balance | $ 709 | 709 | $ 694 | |||||
Net income | $ 77 | $ 69 |
NET OPERATING REVENUES (Details
NET OPERATING REVENUES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,560 | $ 4,506 | $ 9,105 | $ 9,205 |
Adjustments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 17 | 11 | ||
Hospital Operations and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 524 | 531 | 1,004 | 1,029 |
Hospital Operations and other | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 5 | 8 | 11 | 14 |
Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 355 | 386 | 704 | 790 |
Operating segments | Hospital Operations and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 3,827 | 3,733 | 7,689 | 7,680 |
Operating segments | Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 524 | 531 | 1,004 | 1,029 |
Operating segments | Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 355 | 386 | 704 | 790 |
Inter-segment eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | (146) | (144) | (292) | (294) |
Continuing Operations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 4,560 | 4,506 | 9,105 | 9,205 |
Continuing Operations | Operating segments | Hospital Operations and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 3,827 | 3,733 | 7,689 | 7,680 |
Continuing Operations | Operating segments | Hospital Operations and other | Physician practices revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 282 | 271 | 552 | 551 |
Continuing Operations | Operating segments | Hospital Operations and other | Health plans | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 1 | 0 | 1 | 6 |
Continuing Operations | Operating segments | Hospital Operations and other | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | (3) | 19 | 7 | 37 |
Continuing Operations | Operating segments | Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 524 | 531 | 1,004 | 1,029 |
Continuing Operations | Operating segments | Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 355 | 386 | 704 | 790 |
Continuing Operations | Inter-segment eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | (146) | (144) | (292) | (294) |
Acute Care Hospitals and Related Outpatient Facilities | Continuing Operations | Operating segments | Hospital Operations and other | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 721 | 701 | 1,479 | 1,483 |
Acute Care Hospitals and Related Outpatient Facilities | Continuing Operations | Operating segments | Hospital Operations and other | Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 316 | 314 | 630 | 635 |
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 | 2,330 | 2,273 | 4,684 | 4,641 |
Acute Care Hospitals and Related Outpatient Facilities | Continuing Operations | Operating segments | Hospital Operations and other | Uninsured | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 11 | 8 | 12 | 45 |
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 | 169 | 147 | 324 | 282 |
Acute Care Hospitals and Related Outpatient Facilities | Continuing Operations | Operating segments | Hospital Operations and other | Total | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 3,547 | $ 3,443 | $ 7,129 | $ 7,086 |
NET OPERATING REVENUES - Ambula
NET OPERATING REVENUES - Ambulatory Care (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,560 | $ 4,506 | $ 9,105 | $ 9,205 |
Hospital Operations and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 524 | 531 | 1,004 | 1,029 |
Hospital Operations and other | Net patient service revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 496 | 500 | 947 | 969 |
Hospital Operations and other | Management fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 23 | 23 | 46 | 46 |
Hospital Operations and other | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 5 | $ 8 | $ 11 | $ 14 |
NET OPERATING REVENUES - Conife
NET OPERATING REVENUES - Conifer (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,560 | $ 4,506 | $ 9,105 | $ 9,205 |
Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 355 | 386 | 704 | 790 |
Conifer | Revenue cycle services | Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 142 | 139 | 284 | 283 |
Conifer | Revenue cycle services | Non-Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 187 | 220 | 367 | 452 |
Conifer | Other services | Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 4 | 5 | 8 | 11 |
Conifer | Other services | Non-Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 22 | $ 22 | $ 45 | $ 44 |
Conifer | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues, percentage of total | 8.00% |
NET OPERATING REVENUES - Perfor
NET OPERATING REVENUES - Performance Obligations (Details) - Conifer $ in Millions | Jun. 30, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 298 |
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 | 597 |
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 | 594 |
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 | 594 |
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 | 594 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | 4,910 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 7,587 |
NET OPERATING REVENUES NET OPER
NET OPERATING REVENUES NET OPERATING REVENUES - Performance Obligations, Timing of Satisfaction (Details) | Jun. 30, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
PROPERTY AND PROFESSIONAL AND_2
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE (Details) - Scenario, Forecast $ in Millions | 12 Months Ended |
Mar. 31, 2020USD ($) | |
Insurance coverage | |
Insurance, maximum coverage per incident | $ 850 |
Floods | |
Insurance coverage | |
Insurance, maximum coverage per incident | 100 |
Earthquake | |
Insurance coverage | |
Insurance, maximum coverage per incident | 200 |
Insurance deductible | 40 |
Windstorms | |
Insurance coverage | |
Insurance, maximum coverage per incident | 200 |
Fire and other perils | |
Insurance coverage | |
Insurance, maximum coverage per incident | $ 850 |
Flood, earthquake and windstorm | |
Insurance coverage | |
Insurance deductible as a percent | 5.00% |
Insurance deductible | $ 25 |
New Madrid Fault Earthquakes | |
Insurance coverage | |
Insurance deductible as a percent | 2.00% |
Insurance deductible | $ 25 |
Other Catastrophic Events | |
Insurance coverage | |
Insurance deductible | $ 1 |
PROPERTY AND PROFESSIONAL AND_3
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE - Professional and General Liability Reserves (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Other operating expense, net | |||
Insurance coverage | |||
Malpractice expense | $ 205 | $ 163 | |
Professional and General Liability Reserves | |||
Insurance coverage | |||
Self insurance reserve | $ 897 | $ 882 | |
Loss contingency discount rate, maturity rate period | 7 years | ||
Risk-free discount rate, percentage | 1.87% | 2.59% |
CLAIMS AND LAWSUITS (Details)
CLAIMS AND LAWSUITS (Details) $ in Millions | 1 Months Ended | ||
Jun. 30, 2006hospital | Jul. 31, 2019USD ($) | Jan. 31, 2017lawsuit | |
Shareholder Derivative Litigation | |||
Loss Contingencies | |||
Consolidated lawsuits | lawsuit | 2 | ||
Maderazo V. VHS San Antonio Partners, L.P. D/B/A Baptist Health Systems | |||
Loss Contingencies | |||
Number of hospital systems alleging violation | hospital | 3 | ||
Maximum | Subsequent event | |||
Loss Contingencies | |||
Estimate of possible liability | $ | $ 63 |
CLAIMS AND LAWSUITS - Reconcili
CLAIMS AND LAWSUITS - Reconciliations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Loss Contingency Accrual [Roll Forward] | ||||
Litigation and Investigation Costs | $ 18 | $ 13 | $ 31 | $ 19 |
Claims, lawsuits, and regulatory proceedings | Continuing Operations | ||||
Loss Contingency Accrual [Roll Forward] | ||||
Litigation reserve, balance at beginning of period | 8 | 12 | ||
Litigation and Investigation Costs | 31 | 19 | ||
Cash Payments | (24) | (11) | ||
Litigation reserve, balance at end of period | $ 15 | $ 20 | $ 15 | $ 20 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES - Changes in Redeemable Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ||||||
Net income | $ 95 | $ 101 | ||||
Distributions paid to noncontrolling interests | $ (35) | $ (37) | $ (38) | $ (34) | ||
Redeemable noncontrolling interests | ||||||
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ||||||
Balances at beginning of period | $ 1,420 | $ 1,866 | 1,420 | 1,866 | ||
Net income | 95 | 101 | ||||
Distributions paid to noncontrolling interests | (72) | (70) | ||||
Accretion of redeemable noncontrolling interests | 9 | 160 | ||||
Purchases and sales of businesses and noncontrolling interests, net | 10 | (628) | ||||
Balances at end of period | $ 1,462 | $ 1,429 | $ 1,462 | $ 1,429 |
REDEEMABLE NONCONTROLLING INT_4
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES - Segment Details (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
REDEEMABLE NONCONTROLLING INTEREST | ||||
Net income available to redeemable noncontrolling interests | $ 95 | $ 101 | ||
Redeemable noncontrolling interests | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 1,462 | 1,429 | $ 1,420 | $ 1,866 |
Net income available to redeemable noncontrolling interests | 95 | 101 | ||
Redeemable noncontrolling interests | Hospital Operations and other | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 408 | 431 | ||
Net income available to redeemable noncontrolling interests | (15) | (6) | ||
Redeemable noncontrolling interests | Ambulatory Care | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 737 | 713 | ||
Net income available to redeemable noncontrolling interests | 69 | 70 | ||
Redeemable noncontrolling interests | Conifer | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 317 | $ 276 | ||
Net income available to redeemable noncontrolling interests | $ 41 | $ 37 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes | ||||
Income tax expense | $ (30) | $ (44) | $ (47) | $ (114) |
Continued operations pre-tax earnings | 140 | 150 | 214 | 410 |
Unrecognized tax benefits | 45 | 45 | ||
Unrecognized tax benefits which, if recognized, would impact effective tax rate | 43 | 43 | ||
Interest and penalties related to accrued liabilities for uncertain tax positions, recognized | 4 | 4 | ||
Unrecognized federal and state tax benefits and reserves for interest and penalties, which may decrease in the next 12 months | 10 | 10 | ||
Continuing Operations | ||||
Income Taxes | ||||
Income tax expense | $ (30) | $ (44) | $ (47) | $ (114) |
INCOME TAXES - Federal Tax Reco
INCOME TAXES - Federal Tax Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
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% | $ 29 | $ 31 | $ 45 | $ 86 |
State income taxes, net of federal income tax benefit | 6 | 7 | 9 | 17 |
Tax attributable to noncontrolling interests | (19) | (16) | (36) | (34) |
Nondeductible goodwill | 0 | 2 | 0 | 7 |
Nontaxable gains | 0 | 0 | (1) | 0 |
Stock-based compensation | 1 | 0 | 0 | 4 |
Change in valuation allowance-interest expense limitation | 11 | 18 | 35 | 30 |
Other items | 2 | 2 | (5) | 4 |
Income tax expense | $ 30 | $ 44 | $ 47 | $ 114 |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net Income Available (Loss Attributable) to Common Shareholders (Numerator) | ||||
Net income (loss) available to Tenet Healthcare Corporation common shareholders for basic earnings (loss) per share | $ 15 | $ 24 | $ (12) | $ 122 |
Net income (loss) available to Tenet Healthcare Corporation common shareholders for diluted earnings (loss) per share | $ 15 | $ 24 | $ (12) | $ 122 |
Weighted Average Shares (Denominator) | ||||
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders for basic earnings (loss) per share (in shares) | 103,198 | 102,147 | 102,993 | 101,770 |
Effect of dilutive stock options, restricted stock units and deferred compensation units (in shares) | 1,431 | 2,030 | 0 | 1,646 |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders for diluted earnings (loss) per share (in shares) | 104,629 | 104,177 | 102,993 | 103,416 |
Per-Share Amount | ||||
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders for basic earnings (loss) per share (in dollars per share) | $ 0.15 | $ 0.23 | $ (0.12) | $ 1.20 |
Effect of dilutive stock options, restricted stock units and deferred compensation units (in dollars per share) | (0.01) | 0 | 0 | (0.02) |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders for diluted earnings (loss) per share (in dollars per share) | $ 0.14 | $ 0.23 | $ (0.12) | $ 1.18 |
EARNINGS (LOSS) PER COMMON SH_4
EARNINGS (LOSS) PER COMMON SHARE - Antidilutive securities (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2019shares | |
Employee stock options, restricted stock units and deferred compensation units | |
Antidilutive securities | |
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 1,592 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held and used | $ 130 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held and used | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held and used | 130 | |
Significant Unobservable Inputs (Level 3) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held and used | 0 | |
Nonrecurring | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held for sale | 39 | |
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 | |
Nonrecurring | Significant Other Observable Inputs (Level 2) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held for sale | 39 | |
Nonrecurring | Significant Unobservable Inputs (Level 3) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held for sale | $ 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 (percentage) | 102.10% | 97.30% |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Final purchase price allocations | |||
Goodwill | $ 7,298 | $ 7,281 | |
Gains on consolidations | 5 | $ 1 | |
Transaction costs related to prospective and closed acquisitions | 3 | 5 | |
Series of individual business acquisitions | |||
Final purchase price allocations | |||
Current assets | 6 | 3 | |
Property and equipment | 8 | 3 | |
Other intangible assets | 3 | 3 | |
Goodwill | 18 | 132 | |
Other long-term assets, including previously held equity method investments | 5 | 1 | |
Current liabilities | (3) | (2) | |
Long-term liabilities | (6) | (1) | |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | (9) | (8) | |
Noncontrolling interests | (4) | (42) | |
Cash paid, net of cash acquired | (13) | (89) | |
Gains on consolidations | 5 | 0 | |
Transaction costs related to prospective and closed acquisitions | $ 3 | $ 5 |
SEGMENT INFORMATION - General I
SEGMENT INFORMATION - General Information and Customer Concentration (Details) | Aug. 17, 2018hospital | Jun. 30, 2019hospitalstate |
Segment Reporting Information [Line Items] | ||
Number of hospitals operated by subsidiaries | 65 | |
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 | 260 | |
Number of urgent care centers | 38 | |
Number of diagnostic imaging centers | 23 | |
Number of surgical hospitals | 23 | |
European Surgical Partners Ltd | United Surgical Partners International | ||
Segment Reporting Information [Line Items] | ||
Number of facilities owned by subsidiaries | 9 | |
Hospital Operations and other | ||
Segment Reporting Information [Line Items] | ||
Number of states where operations occur | state | 9 | |
Conifer | Minimum | ||
Segment Reporting Information [Line Items] | ||
Number of hospitals to which segment of the entity provides revenue cycle services | 680 | |
United Surgical Partners International | Ambulatory Care | ||
Segment Reporting Information [Line Items] | ||
Ownership percentage by parent | 95.00% |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciling Items (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||||
Assets: | $ 23,207 | $ 23,207 | $ 22,409 | |||
Capital expenditures: | 144 | $ 125 | 336 | $ 268 | ||
Net operating revenues: | 4,560 | 4,506 | 9,105 | 9,205 | ||
Equity in earnings of unconsolidated affiliates: | 42 | 39 | 76 | 64 | ||
Adjusted EBITDA | 657 | 634 | 1,270 | 1,299 | ||
Depreciation and amortization: | 214 | 194 | 422 | 398 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Adjusted EBITDA | 657 | 634 | 1,270 | 1,299 | ||
Income (loss) from divested and closed businesses (i.e., the Company’s health plan businesses) | 0 | 1 | (1) | 0 | ||
Depreciation and amortization | (214) | (194) | (422) | (398) | ||
Impairment and restructuring charges, and acquisition-related costs | (36) | (30) | (55) | (77) | ||
Litigation and investigation costs | (18) | (13) | (31) | (19) | ||
Interest expense | (247) | (254) | (498) | (509) | ||
Loss from early extinguishment of debt | 0 | $ (47) | (1) | (47) | (2) | |
Other non-operating expense, net | (1) | (1) | 0 | (2) | ||
Net gains (losses) on sales, consolidation and deconsolidation of facilities | (1) | 8 | (2) | 118 | ||
Income from continuing operations, before income taxes | 140 | 150 | 214 | 410 | ||
Adjusted EBITDA attributable to health plans | 1 | 1 | (1) | 1 | ||
Inter-segment eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Net operating revenues: | (146) | (144) | (292) | (294) | ||
Hospital Operations and other | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets: | 16,072 | 16,072 | 15,684 | |||
Net operating revenues: | 524 | 531 | 1,004 | 1,029 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Health plan revenues (less than in the current year) | 1 | 1 | 1 | 6 | ||
Hospital Operations and other | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures: | 118 | 108 | 288 | 228 | ||
Net operating revenues: | 3,827 | 3,733 | 7,689 | 7,680 | ||
Equity in earnings of unconsolidated affiliates: | 8 | 6 | 11 | 4 | ||
Adjusted EBITDA | 347 | 345 | 684 | 747 | ||
Depreciation and amortization: | 185 | 164 | 364 | 339 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Adjusted EBITDA | 347 | 345 | 684 | 747 | ||
Depreciation and amortization | (185) | (164) | (364) | (339) | ||
Ambulatory Care | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets: | 6,057 | 6,057 | 5,711 | |||
Ambulatory Care | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures: | 21 | 13 | 41 | 28 | ||
Net operating revenues: | 524 | 531 | 1,004 | 1,029 | ||
Equity in earnings of unconsolidated affiliates: | 34 | 33 | 65 | 60 | ||
Adjusted EBITDA | 207 | 198 | 384 | 363 | ||
Depreciation and amortization: | 18 | 17 | 36 | 34 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Adjusted EBITDA | 207 | 198 | 384 | 363 | ||
Depreciation and amortization | (18) | (17) | (36) | (34) | ||
Conifer | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets: | 1,078 | 1,078 | $ 1,014 | |||
Net operating revenues: | 355 | 386 | 704 | 790 | ||
Conifer | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures: | 5 | 4 | 7 | 12 | ||
Net operating revenues: | 355 | 386 | 704 | 790 | ||
Adjusted EBITDA | 103 | 91 | 202 | 189 | ||
Depreciation and amortization: | 11 | 13 | 22 | 25 | ||
Adjusted EBITDA and Other Reconciling Items | ||||||
Adjusted EBITDA | 103 | 91 | 202 | 189 | ||
Depreciation and amortization | (11) | (13) | (22) | (25) | ||
Conifer | Operating segments | Tenet | ||||||
Segment Reporting Information [Line Items] | ||||||
Net operating revenues: | 146 | 144 | 292 | 294 | ||
Conifer | Operating segments | Other customers | ||||||
Segment Reporting Information [Line Items] | ||||||
Net operating revenues: | $ 209 | $ 242 | $ 412 | $ 496 |