Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2013 | Jan. 31, 2014 | Jun. 28, 2013 |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'TENET HEALTHCARE CORP | ' | ' |
Entity Central Index Key | '0000070318 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $3.90 |
Entity Common Stock, Shares Outstanding | ' | 96,989,632 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $113 | $364 |
Accounts receivable, less allowance for doubtful accounts ($589 at December 31, 2013 and $401 at December 31, 2012) | 2,038 | 1,345 |
Inventories of supplies, at cost | 262 | 153 |
Income tax receivable | 0 | 7 |
Current portion of deferred income tax asset | 581 | 354 |
Other current assets | 716 | 458 |
Total current assets | 3,710 | 2,681 |
Investments and other assets | 405 | 162 |
Deferred income taxes, net of current portion | 90 | 342 |
Property and equipment, at cost, less accumulated depreciation and amortization ($3,898 at December 31, 2013 and $3,494 at December 31, 2012) | 7,691 | 4,293 |
Goodwill | 3,042 | 916 |
Other intangible assets, at cost, less accumulated amortization ($523 at December 31, 2013 and $426 at December 31, 2012) | 1,192 | 650 |
Total assets | 16,130 | 9,044 |
Current liabilities: | ' | ' |
Current portion of long-term debt | 149 | 94 |
Accounts payable | 1,075 | 722 |
Accrued compensation and benefits | 631 | 415 |
Professional and general liability reserves | 156 | 64 |
Accrued interest payable | 198 | 125 |
Other current liabilities | 719 | 343 |
Total current liabilities | 2,928 | 1,763 |
Long-term debt, net of current portion | 10,690 | 5,158 |
Professional and general liability reserves | 543 | 292 |
Defined benefit plan obligations | 398 | 292 |
Other long-term liabilities | 446 | 305 |
Total liabilities | 15,005 | 7,810 |
Commitments and contingencies | ' | ' |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | 247 | 16 |
Shareholders' equity: | ' | ' |
Common stock, $0.05 par value; authorized 262,500,000 shares; 144,057,351 shares issued at December 31, 2013 and 142,363,915 shares issued at December 31, 2012 | 7 | 7 |
Additional paid-in capital | 4,572 | 4,471 |
Accumulated other comprehensive loss | -24 | -68 |
Accumulated deficit | -1,422 | -1,288 |
Common stock in treasury, at cost, 47,197,722 shares at December 31, 2013 and 37,730,431 shares at December 31, 2012 | -2,378 | -1,979 |
Total shareholders' equity | 755 | 1,143 |
Noncontrolling interests | 123 | 75 |
Total equity | 878 | 1,218 |
Total liabilities and equity | $16,130 | $9,044 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $589 | $401 |
Property and equipment, accumulated depreciation and amortization (in dollars) | 3,898 | 3,494 |
Other intangible assets, accumulated amortization (in dollars) | $523 | $426 |
Common stock, par value (in dollars per share) | $0.05 | $0.05 |
Common stock, authorized shares | 262,500,000 | 262,500,000 |
Common stock, shares issued | 144,057,351 | 142,363,915 |
Common stock in treasury, shares | 47,197,722 | 37,730,431 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net operating revenues: | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | $12,074 | $9,904 | $9,371 |
Less: Provision for doubtful accounts | 972 | 785 | 717 |
Net operating revenues | 11,102 | 9,119 | 8,654 |
Operating expenses: | ' | ' | ' |
Salaries, wages and benefits | 5,371 | 4,257 | 4,015 |
Supplies | 1,784 | 1,552 | 1,548 |
Other operating expenses, net | 2,701 | 2,147 | 2,020 |
Electronic health record incentives | -96 | -40 | -55 |
Depreciation and amortization | 545 | 430 | 398 |
Impairment and restructuring charges, and acquisition-related costs | 103 | 19 | 20 |
Litigation and investigation costs | 31 | 5 | 55 |
Operating income | 663 | 749 | 653 |
Interest expense | -474 | -412 | -375 |
Loss from early extinguishment of debt | -348 | -4 | -117 |
Investment earnings | 1 | 1 | 3 |
Income (loss) from continuing operations, before income taxes | -158 | 334 | 164 |
Income tax benefit (expense) | 65 | -125 | -61 |
Income (loss) from continuing operations, before discontinued operations | -93 | 209 | 103 |
Discontinued operations: | ' | ' | ' |
Loss from operations | -5 | -2 | -18 |
Impairment of long-lived assets and goodwill, and restructuring charges, net | 0 | -100 | -6 |
Litigation and investigation costs | -2 | 0 | -17 |
Net gains on sales of facilities | 0 | 1 | 0 |
Income tax benefit (expense) | -4 | 25 | 32 |
Loss from discontinued operations | -11 | -76 | -9 |
Net income (loss) | -104 | 133 | 94 |
Less: Preferred stock dividends | 0 | 11 | 24 |
Less: Net income (loss) attributable to noncontrolling interests | ' | ' | ' |
Continuing operations | 30 | 13 | 11 |
Discontinued operations | 0 | -32 | 1 |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders | -134 | 141 | 58 |
Amounts attributable to Tenet Healthcare Corporation common shareholders | ' | ' | ' |
Income (loss) from continuing operations, net of tax | -123 | 185 | 68 |
Loss from discontinued operations, net of tax | -11 | -44 | -10 |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders | ($134) | $141 | $58 |
Basic | ' | ' | ' |
Continuing operations (in dollars per share) | ($1.21) | $1.77 | $0.58 |
Discontinued operations (in dollars per share) | ($0.11) | ($0.42) | ($0.09) |
Total earnings (loss) per share, Basic (in dollars per share) | ($1.32) | $1.35 | $0.49 |
Diluted | ' | ' | ' |
Continuing operations (in dollars per share) | ($1.21) | $1.70 | $0.56 |
Discontinued operations (in dollars per share) | ($0.11) | ($0.40) | ($0.08) |
Total earnings (loss) per share, Diluted (in dollars per share) | ($1.32) | $1.30 | $0.48 |
Weighted average shares and dilutive securities outstanding (in thousands): | ' | ' | ' |
Basic (in shares) | 101,648 | 104,200 | 117,182 |
Diluted (in shares) | 101,648 | 108,926 | 121,295 |
CONSOLIDATED_STATEMENTS_OF_OTH
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS) | ' | ' | ' |
Net income (loss) | ($104) | $133 | $94 |
Other comprehensive income (loss): | ' | ' | ' |
Adjustments for defined benefit plans | 68 | -25 | -15 |
Unrealized gains on securities held as available-for-sale | 1 | 0 | 0 |
Reclassification adjustments for realized losses included in net income | 0 | 0 | 0 |
Other comprehensive income (loss) before income taxes | 69 | -25 | -15 |
Income tax benefit (expense) related to items of other comprehensive loss | -25 | 9 | 6 |
Total other comprehensive income (loss), net of tax | 44 | -16 | -9 |
Comprehensive income (loss) | -60 | 117 | 85 |
Less: Preferred stock dividends | 0 | 11 | 24 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 30 | -19 | 12 |
Comprehensive income (loss) attributable to Tenet Healthcare Corporation common shareholders | ($90) | $125 | $49 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock | Noncontrolling Interests |
In Millions, except Share data in Thousands, unless otherwise specified | ||||||||
Balances at Dec. 31, 2010 | $1,819 | $334 | $7 | $4,469 | ($43) | ($1,522) | ($1,479) | $53 |
Balances (in shares) at Dec. 31, 2010 | ' | 345 | 121,446 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 94 | 0 | 0 | 0 | 0 | 82 | 0 | 12 |
Distributions paid to noncontrolling interests | -10 | 0 | 0 | 0 | 0 | 0 | 0 | -10 |
Other comprehensive income (loss) | -9 | 0 | 0 | 0 | -9 | 0 | 0 | 0 |
Purchases of businesses or joint venture interests | 14 | 0 | 0 | 0 | 0 | 0 | 0 | 14 |
Preferred stock dividends | -24 | 0 | 0 | -24 | 0 | 0 | 0 | 0 |
Repurchases of common stock | -374 | 0 | 0 | 0 | 0 | 0 | -374 | 0 |
Repurchases of common stock (in shares) | ' | 0 | -18,942 | ' | ' | ' | ' | ' |
Stock-based compensation expense and issuance of common stock | -18 | 0 | 0 | -18 | 0 | 0 | 0 | 0 |
Stock-based compensation expense and issuance of common stock (in shares) | ' | 0 | 1,252 | ' | ' | ' | ' | ' |
Balances at Dec. 31, 2011 | 1,492 | 334 | 7 | 4,427 | -52 | -1,440 | -1,853 | 69 |
Balances (in shares) at Dec. 31, 2011 | ' | 345 | 103,756 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 130 | 0 | 0 | 0 | 0 | 152 | 0 | -22 |
Distributions paid to noncontrolling interests | -12 | 0 | 0 | 0 | 0 | 0 | 0 | -12 |
Other comprehensive income (loss) | -16 | 0 | 0 | 0 | -16 | 0 | 0 | 0 |
Contributions from noncontrolling interests | 3 | 0 | 0 | 0 | 0 | 0 | 0 | 3 |
Purchases of businesses or joint venture interests | 37 | 0 | 0 | 0 | 0 | 0 | 0 | 37 |
Preferred stock dividends | -11 | 0 | 0 | -11 | 0 | 0 | 0 | 0 |
Repurchases of common stock | -126 | 0 | 0 | 0 | 0 | 0 | -126 | 0 |
Repurchases of common stock (in shares) | ' | 0 | -4,733 | ' | ' | ' | ' | ' |
Repurchases of preferred stock | -289 | -289 | 0 | 0 | 0 | 0 | 0 | 0 |
Repurchases of preferred stock (in shares) | ' | -299 | 0 | ' | ' | ' | ' | ' |
Conversion of preferred stock to common stock | 0 | -45 | 0 | 45 | 0 | 0 | 0 | 0 |
Conversion of preferred stock to common stock (in shares) | ' | -46 | 1,979 | ' | ' | ' | ' | ' |
Stock-based compensation expense and issuance of common stock | 10 | 0 | 0 | 10 | 0 | 0 | 0 | 0 |
Stock-based compensation expense and issuance of common stock (in shares) | ' | 0 | 3,631 | ' | ' | ' | ' | ' |
Balances at Dec. 31, 2012 | 1,218 | 0 | 7 | 4,471 | -68 | -1,288 | -1,979 | 75 |
Balances (in shares) at Dec. 31, 2012 | ' | 0 | 104,633 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | -113 | 0 | 0 | 0 | 0 | -134 | 0 | 21 |
Distributions paid to noncontrolling interests | -22 | 0 | 0 | 0 | 0 | 0 | 0 | -22 |
Other comprehensive income (loss) | 44 | 0 | 0 | 0 | 44 | 0 | 0 | 0 |
Contributions from noncontrolling interests | 105 | 0 | 0 | 56 | 0 | 0 | 0 | 49 |
Preferred stock dividends | 0 | ' | ' | ' | ' | ' | ' | ' |
Repurchases of common stock | -400 | 0 | 0 | 0 | 0 | 0 | -400 | 0 |
Repurchases of common stock (in shares) | ' | 0 | -9,485 | ' | ' | ' | ' | ' |
Stock-based compensation expense and issuance of common stock | 46 | 0 | 0 | 45 | 0 | 0 | 1 | 0 |
Stock-based compensation expense and issuance of common stock (in shares) | ' | 0 | 1,712 | ' | ' | ' | ' | ' |
Balances at Dec. 31, 2013 | $878 | $0 | $7 | $4,572 | ($24) | ($1,422) | ($2,378) | $123 |
Balances (in shares) at Dec. 31, 2013 | ' | 0 | 96,860 | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ' | ' | ' |
Net income (loss) | ($104) | $133 | $94 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 545 | 430 | 398 |
Provision for doubtful accounts | 972 | 785 | 717 |
Deferred income tax expense (benefit) | -67 | 92 | 81 |
Stock-based compensation expense | 36 | 32 | 24 |
Impairment and restructuring charges, and acquisition-related costs | 103 | 19 | 20 |
Litigation and investigation costs | 31 | 5 | 55 |
Loss from early extinguishment of debt | 348 | 4 | 117 |
Amortization of debt discount and debt issuance costs | 19 | 22 | 30 |
Pre-tax loss (gain) from discontinued operations | 7 | 101 | 41 |
Other items, net | -33 | -12 | -13 |
Changes in cash from operating assets and liabilities: | ' | ' | ' |
Accounts receivable | -1,060 | -868 | -850 |
Inventories and other current assets | -130 | -59 | -35 |
Income taxes | 0 | -5 | -63 |
Accounts payable, accrued expenses and other current liabilities | 38 | 9 | -32 |
Other long-term liabilities | 13 | 3 | -5 |
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | -114 | -63 | -44 |
Net cash used in operating activities from discontinued operations, excluding income taxes | -15 | -35 | -38 |
Net cash provided by operating activities | 589 | 593 | 497 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of property and equipment - continuing operations | -691 | -506 | -467 |
Purchases of property and equipment - discontinued operations | 0 | -2 | -8 |
Purchases of businesses or joint venture interests, net of cash acquired | -1,515 | -211 | -84 |
Proceeds from sales of facilities and other assets - discontinued operations | 16 | 45 | 0 |
Proceeds from sales of marketable securities, long-term investments and other assets | 15 | 17 | 59 |
Other long-term assets | 8 | -9 | -2 |
Other items, net | 3 | 4 | -1 |
Net cash used in investing activities | -2,164 | -662 | -503 |
Cash flows from financing activities: | ' | ' | ' |
Repayments of borrowings under credit facility | -1,286 | -1,773 | -365 |
Proceeds from borrowings under credit facility | 1,691 | 1,693 | 445 |
Repayments of other borrowings | -5,133 | -248 | -843 |
Proceeds from other borrowings | 6,507 | 1,092 | 900 |
Repurchases of preferred stock | 0 | -292 | 0 |
Deferred debt issuance costs | -154 | -17 | -21 |
Repurchases of common stock | -400 | -126 | -374 |
Cash dividends on preferred stock | 0 | -14 | -24 |
Distributions paid to noncontrolling interests | -27 | -15 | -10 |
Contributions from noncontrolling interests | 99 | 3 | 0 |
Proceeds from exercise of stock options | 22 | 11 | 3 |
Other items, net | 5 | 6 | 3 |
Net cash provided by (used in) financing activities | 1,324 | 320 | -286 |
Net increase (decrease) in cash and cash equivalents | -251 | 251 | -292 |
Cash and cash equivalents at beginning of period | 364 | 113 | 405 |
Cash and cash equivalents at end of period | 113 | 364 | 113 |
Supplemental disclosures: | ' | ' | ' |
Interest paid, net of capitalized interest | -426 | -376 | -347 |
Proceeds from interest rate swap agreement | 0 | 0 | 30 |
Income tax payments, net | ($6) | ($13) | ($10) |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Description of Business | |||||||||||
Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is an investor-owned health care services company whose subsidiaries and affiliates as of December 31, 2013 primarily operated 77 hospitals with a total of 20,293 licensed beds, 183 outpatient centers, six health plans, six accountable care networks and Conifer Health Solutions, LLC (“Conifer”), which provides business process solutions to more than 700 hospital and other clients nationwide. | |||||||||||
Basis of Presentation | |||||||||||
Our Consolidated Financial Statements include the accounts of Tenet and its wholly owned and majority-owned subsidiaries. We eliminate intercompany accounts and transactions in consolidation, and we include the results of operations of businesses that are newly acquired in purchase transactions from their dates of acquisition. We account for significant investments in other affiliated companies using the equity method. Unless otherwise indicated, all financial and statistical data included in these notes to our Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). Certain balances in the accompanying Consolidated Financial Statements and these notes have been reclassified to give retrospective presentation for the discontinued operations described in Note 4. Furthermore, all amounts related to shares, share prices and earnings per share have been restated to give retrospective presentation for the reverse stock split described in Note 2. | |||||||||||
Effective October 1, 2013, we acquired the common stock of Vanguard Health Systems, Inc. (“Vanguard”) for $21 per share in an all cash transaction. Vanguard owned and operated 28 hospitals (plus one more under construction), 39 outpatient centers and five health plans with approximately 140,000 members, serving communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas. We paid approximately $4.3 billion to acquire Vanguard, including the assumption of $2.5 billion of Vanguard’s net debt. | |||||||||||
Use of Estimates | |||||||||||
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America (“GAAP”), requires us to make estimates and assumptions that affect the amounts reported in our 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. Although we believe all adjustments considered necessary for a fair presentation have been included, 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. | |||||||||||
Net Operating Revenues Before Provision for Doubtful Accounts | |||||||||||
We recognize net operating revenues before provision for doubtful accounts in the period in which our services are performed. Net operating revenues before provision for doubtful accounts primarily consist of net patient service revenues that are recorded based on established billing rates (i.e., gross charges), less estimated discounts for contractual and other allowances, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under ourCompact with Uninsured Patients (“Compact”) and other uninsured discount and charity programs. | |||||||||||
Gross charges are retail charges. They are not the same as actual pricing, and they generally do not reflect what a hospital is ultimately paid and, therefore, are not displayed in our consolidated statements of operations. Hospitals are typically paid amounts that are negotiated with insurance companies or are set by the government. Gross charges are used to calculate Medicare outlier payments and to determine certain elements of payment under managed care contracts (such as stop-loss payments). Because Medicare requires that a hospital’s gross charges be the same for all patients (regardless of payer category), gross charges are also what hospitals charge all other patients prior to the application of discounts and allowances. | |||||||||||
Revenues under the traditional fee-for-service Medicare and Medicaid programs are based primarily on prospective payment systems. Retrospectively determined cost-based revenues under these programs, which were more prevalent in earlier periods, and certain other payments, such as Indirect Medical Education, Direct Graduate Medical Education, disproportionate share hospital and bad debt expense, which are based on our hospitals’ cost reports, are estimated using historical trends and current factors. Cost report settlements under these programs are subject to audit by Medicare and Medicaid auditors and administrative and judicial review, and it can take several years until final settlement of such matters is determined and completely resolved. Because the laws, regulations, instructions and rule interpretations governing Medicare and Medicaid reimbursement are complex and change frequently, the estimates recorded by us could change by material amounts. | |||||||||||
We have a system and estimation process for recording Medicare net patient revenue and estimated cost report settlements. This results in us recording accruals to reflect the expected final settlements on our cost reports. For filed cost reports, we record the accrual based on those cost reports and subsequent activity, and record a valuation allowance against those cost reports based on historical settlement trends. The accrual for periods for which a cost report is yet to be filed is recorded based on estimates of what we expect to report on the filed cost reports, and a corresponding valuation allowance is recorded as previously described. Cost reports generally must be filed within five months after the end of the annual cost reporting period. After the cost report is filed, the accrual and corresponding valuation allowance may need to be adjusted. Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the years ended December 31, 2013, 2012 and 2011 by $38 million, $114 million ($81 million related to the industry-wide Medicare Budget Neutrality settlement), and $1 million, respectively. Estimated cost report settlements and valuation allowances are included in accounts receivable in the accompanying Consolidated Balance Sheets (see Note 3). 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. | |||||||||||
Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per-diem rates, discounted fee-for-service rates and/or other similar contractual arrangements. These revenues are also subject to review and possible audit by the payers, which can take several years before they are completely resolved. The payers are billed for patient services on an individual patient basis. An individual patient’s bill is subject to adjustment on a patient-by-patient basis in the ordinary course of business by the payers following their review and adjudication of each particular bill. We estimate the discounts for contractual allowances at the individual hospital level utilizing billing data on an individual patient basis. At the end of each month, on an individual hospital basis, we estimate our expected reimbursement for patients of managed care plans based on the applicable contract terms. Contractual allowance estimates are periodically reviewed for accuracy by taking into consideration known contract terms as well as payment history. Although we do not separately accumulate and disclose the aggregate amount of adjustments to the estimated reimbursement for every patient bill, we believe our estimation and review process enables us to identify instances on a timely basis where such estimates need to be revised. We do not believe there were any adjustments to estimates of patient bills that were material to our revenues. In addition, on a corporate-wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans. Managed care accounts, net of contractual allowances recorded, are further reduced to their net realizable value through provision for doubtful accounts based on historical collection trends for these payers and other factors that affect the estimation process. | |||||||||||
We know of no material claims, disputes or unsettled matters with any payer that would affect our revenues for which we have not adequately provided for in the accompanying Consolidated Financial Statements. | |||||||||||
Under our Compact or other uninsured discount programs, the discount offered to certain uninsured patients is recognized as a contractual allowance, which reduces net operating revenues at the time the self-pay accounts are recorded. The uninsured patient accounts, net of contractual allowances recorded, are further reduced to their net realizable value through provision for doubtful accounts based on historical collection trends for self-pay accounts and other factors that affect the estimation process. | |||||||||||
We also provide charity care to patients who are financially unable to pay for the health care services they receive. Most patients who qualify for charity care are charged a per-diem amount for services received, subject to a cap. Except for the per-diem amounts, our policy is not to pursue collection of amounts determined to qualify as charity care; therefore, we do not report these amounts in net operating revenues or in provision for doubtful accounts. Patient advocates from Conifer’s Medical Eligibility Program screen patients in the hospital to determine whether those patients meet eligibility requirements for financial assistance programs. They also expedite the process of applying for these government programs. | |||||||||||
The table below shows the sources of net operating revenues before provision for doubtful accounts from continuing operations: | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
General Hospitals: | |||||||||||
Medicare | $ | 2,357 | $ | 2,195 | $ | 2,068 | |||||
Medicaid | 975 | 783 | 802 | ||||||||
Managed care | 6,277 | 5,382 | 5,128 | ||||||||
Indemnity, self-pay and other | 1,201 | 1,007 | 958 | ||||||||
Acute care hospitals — other revenue | 78 | 69 | 105 | ||||||||
Other: | |||||||||||
Other operations | 1,186 | 468 | 310 | ||||||||
Net operating revenues before provision for doubtful accounts | $ | 12,074 | $ | 9,904 | $ | 9,371 | |||||
Provision for Doubtful Accounts | |||||||||||
Although outcomes vary, our policy is to attempt to collect amounts due from patients, including co-pays and deductibles due from patients with insurance, at the time of service while complying with all federal and state laws and regulations, including, but not limited to, the Emergency Medical Treatment and Active Labor Act (“EMTALA”). Generally, as required by EMTALA, patients may not be denied emergency treatment due to inability to pay. Therefore, services, including the legally required medical screening examination and stabilization of the patient, are performed without delaying to obtain insurance information. In non-emergency circumstances or for elective procedures and services, it is our policy to verify insurance prior to a patient being treated; however, there are various exceptions that can occur. Such exceptions can include, for example, instances where (1) we are unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid or Victims of Crime, and it takes several days or weeks before qualification for such benefits is confirmed or denied, and (3) under physician orders we provide services to patients that require immediate treatment. | |||||||||||
We provide for an allowance against accounts receivable that could become uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. Generally, we estimate this allowance based on the aging of our accounts receivable by hospital, our historical collection experience by hospital and for each type of payer over a look-back period, and other relevant factors. A significant portion of our provision for doubtful accounts relates to self-pay patients, as well as co-pays and deductibles owed to us by patients with insurance. Payment pressure from managed care payers also affects our provision for doubtful accounts. We typically experience ongoing managed care payment delays and disputes; however, we continue to work with these payers to obtain adequate and timely reimbursement for our services. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on unemployment rates and the number of uninsured and underinsured patients, the volume of patients through our emergency departments, the increased burden of co-pays and deductibles to be made by patients with insurance, and business practices related to collection efforts. These factors continuously change and can have an impact on collection trends and our estimation process. | |||||||||||
Electronic Health Record Incentives | |||||||||||
Under certain provisions of the American Recovery and Reinvestment Act of 2009 (“ARRA”), federal incentive payments are available to hospitals, physicians and certain other professionals (“Providers”) when they adopt, implement or upgrade (“AIU”) certified electronic health record (“EHR”) technology or become “meaningful users,” as defined under ARRA, of EHR technology in ways that demonstrate improved quality, safety and effectiveness of care. Providers can become eligible for annual Medicare incentive payments by demonstrating meaningful use of EHR technology in each period over four periods. Medicaid providers can receive their initial incentive payment by satisfying AIU criteria, but must demonstrate meaningful use of EHR technology in subsequent years in order to qualify for additional payments. Hospitals may be eligible for both Medicare and Medicaid EHR incentive payments; however, physicians and other professionals may be eligible for either Medicare or Medicaid incentive payments, but not both. Hospitals that are meaningful users under the Medicare EHR incentive payment program are deemed meaningful users under the Medicaid EHR incentive payment program and do not need to meet additional criteria imposed by a state. Medicaid EHR incentive payments to Providers are 100% federally funded and administered by the states. The Centers for Medicare and Medicaid Services (“CMS”) established calendar year 2011 as the first year states could offer EHR incentive payments. Before a state may offer EHR incentive payments, the state must submit and CMS must approve the state’s incentive plan. | |||||||||||
We recognize Medicaid EHR incentive payments in our consolidated statements of operations for the first payment year when: (1) CMS approves a state’s EHR incentive plan; and (2) our hospital or employed physician acquires certified EHR technology (i.e., when AIU criteria are met). Medicaid EHR incentive payments for subsequent payment years are recognized in the period during which the specified meaningful use criteria are met. We recognize Medicare EHR incentive payments when: (1) the specified meaningful use criteria are met; and (2) contingencies in estimating the amount of the incentive payments to be received are resolved. During the years ended December 31, 2013, 2012 and 2011, certain of our hospitals and physicians satisfied the CMS AIU and/or meaningful use criteria. As a result, we recognized approximately $96 million, $40 million and $55 million of Medicare and Medicaid EHR incentive payments as a reduction to expense in our Consolidated Statement of Operations for years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||
Cash Equivalents | |||||||||||
We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were approximately $113 million and $364 million at December 31, 2013 and 2012, respectively. As of December 31, 2013 and 2012, our book overdrafts were approximately $245 million and $232 million, respectively, which were classified as accounts payable. | |||||||||||
At December 31, 2013 and 2012, approximately $62 million and $65 million, respectively, of total cash and cash equivalents in the accompanying Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries. | |||||||||||
Also at December 31, 2013 and 2012, we had $193 million and $98 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $138 million and $93 million, respectively, were included in accounts payable. | |||||||||||
During the years ended December 31, 2013 and 2012, we entered into non-cancellable capital leases of approximately $341 million and $88 million, respectively, primarily for buildings and equipment. | |||||||||||
Investments in Debt and Equity Securities | |||||||||||
We classify investments in debt and equity securities as either available-for-sale, held-to-maturity or as part of a trading portfolio. At December 31, 2013 and 2012, we had no significant investments in securities classified as either held-to-maturity or trading. We carry securities classified as available-for-sale at fair value. We report their unrealized gains and losses, net of taxes, as accumulated other comprehensive income (loss) unless we determine that a loss is other-than-temporary, at which point we would record a loss in our consolidated statements of operations. We include realized gains or losses in our consolidated statements of operations based on the specific identification method. | |||||||||||
Property and Equipment | |||||||||||
Additions and improvements to property and equipment exceeding established minimum amounts with a useful life greater than one year are capitalized at cost. Expenditures for maintenance and repairs are charged to expense as incurred. We use the straight-line method of depreciation for buildings, building improvements and equipment. The estimated useful life for buildings and improvements is primarily 15 to 40 years and, for equipment, three to 15 years. Newly constructed hospitals are usually depreciated over 50 years. We record capital leases at the beginning of the lease term as assets and liabilities. The value recorded is the lower of either the present value of the minimum lease payments or the fair value of the asset. Such assets, including improvements, are generally amortized over the shorter of either the lease term or their estimated useful life. Interest costs related to construction projects are capitalized. In the years ended December 31, 2013, 2012 and 2011, capitalized interest was $14 million, $6 million and $8 million, respectively. | |||||||||||
We evaluate our long-lived assets for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future undiscounted cash flows. If the estimated future undiscounted cash flows are less than the carrying value of the assets, we calculate the amount of an impairment if the carrying value of the long-lived assets exceeds the fair value of the assets. The fair value of the assets is estimated based on appraisals, established market values of comparable assets or internal estimates of future net cash flows expected to result from the use and ultimate disposition of the asset. The estimates of these future cash flows are based on assumptions and projections we believe to be reasonable and supportable. They require our subjective judgments and take into account assumptions about revenue and expense growth rates. These assumptions may vary by type of facility and presume stable, improving or, in some cases, declining results at our hospitals, depending on their circumstances. | |||||||||||
We report long-lived assets to be disposed of at the lower of their carrying amounts or fair values less costs to sell. In such circumstances, our estimates of fair value are based on appraisals, established market prices for comparable assets or internal estimates of future net cash flows. | |||||||||||
Asset Retirement Obligations | |||||||||||
We recognize the fair value of a liability for legal obligations associated with asset retirements, primarily related to asbestos abatement and costs associated with underground storage tanks, in the period in which it is incurred if a reasonable estimate of the fair value of the obligation can be made. When the liability is initially recorded, we capitalize the cost of the asset retirement obligation by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost associated with the retirement obligation is depreciated over the useful life of the related asset. Upon settlement of the obligation, any difference between the cost to settle the asset retirement obligation and the liability recorded is recognized as a gain or loss in our consolidated statements of operations. | |||||||||||
Goodwill and Other Intangible Assets | |||||||||||
Goodwill represents the excess of costs over the fair value of assets of businesses acquired. Goodwill and other intangible assets acquired in purchase business combinations and determined to have indefinite useful lives are not amortized, but instead are subject to impairment tests performed at least annually. For goodwill, we perform the test at the reporting unit level when events occur that require an evaluation to be performed or at least annually. If we determine the carrying value of goodwill is impaired, or if the carrying value of a business that is to be sold or otherwise disposed of exceeds its fair value, we reduce the carrying value, including any allocated goodwill, to fair value. Estimates of fair value are based on appraisals, established market prices for comparable assets or internal estimates of future net cash flows and presume stable, improving or, in some cases, declining results at our hospitals, depending on their circumstances. | |||||||||||
Other intangible assets primarily consist of capitalized software costs, which are amortized on a straight-line basis over the estimated useful life of the software, which ranges from three to 15 years. Also included in intangible assets are costs associated with the issuance of our long-term debt, which are primarily being amortized under the effective interest method based on the terms of the specific notes, and miscellaneous intangible assets related to our acquisition of Vanguard. | |||||||||||
Accruals for General and Professional Liability Risks | |||||||||||
We accrue for estimated professional and general liability claims, when they are probable and can be reasonably estimated. The accrual, which includes an estimate for incurred but not reported claims, is updated each quarter based on an actuarial calculation of projected payments using case-specific facts and circumstances and our historical loss reporting, development and settlement patterns and is discounted to its net present value using a risk-free discount rate (2.45% at December 31, 2013 and 1.18% at December 31, 2012). To the extent that subsequent claims information varies from our estimates, the liability is adjusted in the period such information becomes available. Malpractice expense is presented within other operating expenses in the accompanying Consolidated Statements of Operations. | |||||||||||
Income Taxes | |||||||||||
We account for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Income tax receivables and liabilities and deferred tax assets and liabilities are recognized based on the amounts that more likely than not will be sustained upon ultimate settlement with taxing authorities. | |||||||||||
Developing our provision for income taxes and analysis of uncertain tax positions items requires significant judgment and knowledge of federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. | |||||||||||
We assess the realization of our deferred tax assets to determine whether an income tax valuation allowance is required. Based on all available evidence, both positive and negative, and the weight of that evidence to the extent such evidence can be objectively verified, we determine whether it is more likely than not that all or a portion of the deferred tax assets will be realized. The main factors that we consider include: | |||||||||||
· Cumulative profits/losses in recent years, adjusted for certain nonrecurring items; | |||||||||||
· Income/losses expected in future years; | |||||||||||
· Unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels; | |||||||||||
· The availability, or lack thereof, of taxable income in prior carryback periods that would limit realization of tax benefits; and | |||||||||||
· The carryforward period associated with the deferred tax assets and liabilities. | |||||||||||
We consider many factors when evaluating our uncertain tax positions, and such judgments are subject to periodic review. Tax benefits associated with uncertain tax positions are recognized in the period in which one of the following conditions is satisfied: (1) the more likely than not recognition threshold is satisfied; (2) the position is ultimately settled through negotiation or litigation; or (3) the statute of limitations for the taxing authority to examine and challenge the position has expired. Tax benefits associated with an uncertain tax position are derecognized in the period in which the more likely than not recognition threshold is no longer satisfied. | |||||||||||
Segment Reporting | |||||||||||
We primarily operate acute care hospitals and related health care facilities. Our general hospitals generated 90.2%, 95.3% and 96.7% of our net operating revenues before provision for doubtful accounts in the years ended December 31, 2013, 2012 and 2011, respectively. Each of our operating regions and markets reports directly to our president of hospital operations. Major decisions, including capital resource allocations, are made at the consolidated level, not at the regional, market or hospital level. | |||||||||||
Historically, our business has consisted of one reportable segment, Hospital Operations and other. However, during 2012, our Hospital Operations and other segment and our Conifer subsidiary entered into formal agreements, pursuant to which it was agreed that services provided by both parties to each other would be billed based on estimated third-party pricing terms. As a result, we have presented Conifer as a separate reportable business segment for all periods presented. 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. | |||||||||||
Costs Associated With Exit or Disposal Activities | |||||||||||
We recognize costs associated with exit (including restructuring) or disposal activities when they are incurred and can be measured at fair value, rather than at the date of a commitment to an exit or disposal plan. |
EQUITY
EQUITY | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
EQUITY | ' | |||||||||||
EQUITY | ' | |||||||||||
NOTE 2. EQUITY | ||||||||||||
Reverse Stock Split | ||||||||||||
On October 11, 2012, our common stock began trading on the New York Stock Exchange on a split-adjusted basis following a one-for-four reverse stock split we announced on October 1, 2012. Every four shares of our issued and outstanding common stock were exchanged for one issued and outstanding share of common stock, without any change in the par value per share, and our authorized shares of common stock were proportionately decreased from 1,050,000,000 shares to 262,500,000 shares. No fractional shares were issued in connection with the stock split. All current and prior period amounts in the accompanying Consolidated Financial Statements and these notes related to shares, share prices and earnings per share have been restated to give retrospective presentation for the reverse stock split. | ||||||||||||
Share Repurchase Programs | ||||||||||||
In October 2012, we announced that our board of directors had authorized the repurchase of up to $500 million of our common stock through a share repurchase program that expired in December 2013. Under the program, shares could be purchased in the open market or through privately negotiated transactions in a manner consistent with applicable securities laws and regulations, including pursuant to a Rule 10b5-1 plan we maintained. Shares were repurchased at times and in amounts based on market conditions and other factors. Pursuant to the share repurchase program, we paid approximately $500 million to repurchase a total of 12,891,298 shares during the period from the commencement of the program through December 31, 2013. | ||||||||||||
Period | Total Number of | Average Price | Total Number of | Maximum Dollar Value | ||||||||
Shares | Paid Per | Shares Purchased as | of Shares That May Yet | |||||||||
Purchased | Share | Part of Publicly | Be Purchased Under the | |||||||||
Announced Program | Program | |||||||||||
(In Thousands) | (In Thousands) | (In Millions) | ||||||||||
November 1, 2012 through December 31, 2012 | 3,406 | $ | 29.36 | 3,406 | $ | 400 | ||||||
January 1, 2013 through | 531 | 37.13 | 531 | 380 | ||||||||
January 31, 2013 | ||||||||||||
February 1, 2013 through | 914 | 39.3 | 914 | 344 | ||||||||
February 28, 2013 | ||||||||||||
March 1, 2013 through | 1,010 | 43.95 | 1,010 | 300 | ||||||||
March 31, 2013 | ||||||||||||
Three Months Ended March 31, 2013 | 2,455 | 40.74 | 2,455 | 300 | ||||||||
May 1, 2013 through | 933 | 46.78 | 933 | 256 | ||||||||
May 31, 2013 | ||||||||||||
June 1, 2013 through | 1,065 | 45.71 | 1,065 | 208 | ||||||||
June 30, 2013 | ||||||||||||
Three Months Ended June 30, 2013 | 1,998 | 46.21 | 1,998 | 208 | ||||||||
July 1, 2013 through | 166 | 46.08 | 166 | 200 | ||||||||
July 31, 2013 | ||||||||||||
August 1, 2013 through | 1,045 | 40.43 | 1,045 | 158 | ||||||||
August 31, 2013 | ||||||||||||
September 1, 2013 through | 1,431 | 40.35 | 1,431 | 100 | ||||||||
September 30, 2013 | ||||||||||||
Three Months Ended September 30, 2013 | 2,642 | 40.75 | 2,642 | 100 | ||||||||
November 1, 2103 through | 796 | 42.28 | 796 | 66 | ||||||||
November 30, 2013 | ||||||||||||
December 1, 2013 through | 1,594 | 41.62 | 1,594 | 0 | ||||||||
December 31, 2013 | ||||||||||||
Three Months Ended December 31, 2013 | 2,390 | 41.84 | 2,390 | 0 | ||||||||
Total | 12,891 | $ | 38.79 | 12,891 | $ | 0 | ||||||
Repurchased shares are recorded based on settlement date and are held as treasury stock. | ||||||||||||
Mandatory Convertible Preferred Stock | ||||||||||||
In April 2012, we repurchased and subsequently retired 298,700 shares of our 7% mandatory convertible preferred stock with a carrying value of $289 million. In a related private financing, we issued an additional $141 million aggregate principal amount of our 61/4% senior secured notes due 2018 at a premium for $142 million of cash proceeds and an additional $150 million aggregate principal amount of our 8% senior notes due 2020. We recorded the difference between the carrying value and the amount paid to redeem the preferred stock in April 2012 as preferred stock dividends in the accompanying Consolidated Statements of Operations. On October 1, 2012, the remaining 46,300 shares outstanding of our mandatory convertible preferred stock automatically converted to 1,978,633 shares of our common stock. We accrued approximately $6 million, or $17.50 per share, for dividends on the preferred stock in the three months ended March 31, 2012 and $1 million in each of the three months ended June 30, 2012 and September 30, 2012, and paid the dividends in April, July and October 2012, respectively. | ||||||||||||
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 year ended December 31, 2013 and 2012: | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Balances at beginning of period | $ | 16 | $ | 16 | ||||||||
Net income | 9 | 0 | ||||||||||
Distributions paid to noncontrolling interests | (5 | ) | 0 | |||||||||
Sales of joint venture interests | 52 | 0 | ||||||||||
Purchases of businesses | 175 | 0 | ||||||||||
Balances at end of period | $ | 247 | $ | 16 | ||||||||
As part of the acquisition of Vanguard, we obtained a 51% controlling interest in a partnership that held the assets and liabilities of Valley Baptist Health System (“Valley Baptist”). The remaining 49% non-controlling interest is held by the former owner of Valley Baptist (the “seller”). The partnership operating agreement includes a put option that the seller may exercise on its 49% non-controlling interest upon either the third or fifth anniversary, September 1, 2014 and September 1, 2016, respectively, of the transaction date. The redemption value is calculated based upon the operating results and the debt of the partnership, but is subject to a floor value. We also have the option to call a stated percentage of the seller’s non-controlling interest in the event the seller does not exercise its put option on either of the anniversary dates. The carrying value of the redeemable noncontrolling interest in Valley Baptist has been determined based upon the calculated acquisition date fair value of the seller’s interest in the partnership, such fair value based upon Level 3 (consistent with the value methodologies for Level 3 described in Note 18) estimates of future operating results of the partnership, plus the seller’s portion of the partnership earnings during the three months ended December 31, 2013. If the seller exercises its put option, we may purchase the non-controlling interest with cash or by issuing stock. |
ACCOUNTS_RECEIVABLE_AND_ALLOWA
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ' | |||||||
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ' | |||||||
NOTE 3. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ||||||||
The principal components of accounts receivable are shown in the table below: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Continuing operations: | ||||||||
Patient accounts receivable | $ | 2,537 | $ | 1,668 | ||||
Allowance for doubtful accounts | (589 | ) | (396 | ) | ||||
Estimated future recoveries from accounts assigned to our Conifer subsidiary | 91 | 88 | ||||||
Net cost report settlements payable and valuation allowances | (4 | ) | (24 | ) | ||||
2,035 | 1,336 | |||||||
Discontinued operations: | ||||||||
Patient accounts receivable | 1 | 11 | ||||||
Allowance for doubtful accounts | 0 | (5 | ) | |||||
Estimated future recoveries from accounts assigned to our Conifer subsidiary | 0 | 2 | ||||||
Net cost report settlements receivable and valuation allowances | 2 | 1 | ||||||
3 | 9 | |||||||
Accounts receivable, net | $ | 2,038 | $ | 1,345 | ||||
As of December 31, 2013 and 2012, our allowance for doubtful accounts was 23.2% and 23.7%, respectively, of our patient accounts receivable. Accounts that are pursued for collection through the regional business offices of Conifer are maintained on our hospitals’ books and reflected in patient accounts receivable with an allowance for doubtful accounts established to reduce the carrying value of such receivables to their estimated net realizable value. Generally, we estimate this allowance based on the aging of our accounts receivable by hospital, our historical collection experience by hospital and for each type of payer, and other relevant factors. As of December 31, 2013 and 2012, our allowance for doubtful accounts for self-pay was 75.9% and 73.8%, respectively, of our self-pay patient accounts receivable, including co-pays and deductibles owed by patients with insurance. As of December 31, 2013 and 2012, our allowance for doubtful accounts for managed care was 5.6% and 9.4%, respectively, of our managed care patient accounts receivable. During the year ended December 31, 2013, we experienced a significant change in the overall composition of our patient accounts receivable due to the acquisition of Vanguard in October 2013. | ||||||||
Accounts assigned to our Conifer subsidiary are written off and excluded from patient accounts receivable and allowance for doubtful accounts; however, an estimate of future recoveries from all accounts at our Conifer subsidiary is determined based on historical experience and recorded on our hospitals’ books as a component of accounts receivable in the accompanying Consolidated Balance Sheets. At the present time, our new acquisitions have not been fully integrated into our Conifer collections processes. | ||||||||
The estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our self-pay patients for the years ended December 31, 2013, 2012 and 2011 were approximately $545 million, $430 million and $379 million, respectively. Our estimated costs (based on the selected operating expenses described above) of caring for charity care patients for the years ended December 31, 2013, 2012 and 2011 were approximately $158 million, $136 million, and $113 million, respectively. 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. Revenues attributable to DSH payments and other state-funded subsidy payments for the years ended December 31, 2013, 2012 and 2011 were approximately $428 million, $283 million and $255 million, respectively. These payments are intended to mitigate our cost of uncompensated care, as well as reduced Medicaid funding levels. Generally, our method of measuring the estimated costs uses adjusted self-pay/charity patient days multiplied by selected operating expenses per adjusted patient day. The adjusted self-pay/charity patient days represents actual self-pay/charity patient days adjusted to include self-pay/charity outpatient services by multiplying actual self-pay/charity patient days by the sum of gross self-pay/charity inpatient revenues and gross self-pay/charity outpatient revenues and dividing the results by gross self-pay/charity inpatient revenues. |
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
DISCONTINUED OPERATIONS | ' | ||||||||||
DISCONTINUED OPERATIONS | ' | ||||||||||
NOTE 4. DISCONTINUED OPERATIONS | |||||||||||
In the year ended December 31, 2013, we recognized a $12 million gain in discontinued operations related to the sale of land. | |||||||||||
In the three months ended June 30, 2012, our Creighton University Medical Center hospital (“CUMC”) in Nebraska was reclassified into discontinued operations based on the guidance in the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 360, “Property, Plant and Equipment,” as a result of our plan to sell CUMC. We recorded an impairment charge in discontinued operations of $100 million, consisting of $98 million for the write-down of CUMC’s long-lived assets to their estimated fair values, less estimated costs to sell, and a $2 million charge for the write-down of goodwill related to CUMC in the three months ended June 30, 2012. We completed the sale of CUMC on August 31, 2012 at a transaction price of $40 million, excluding working capital, and recognized a loss on sale of approximately $1 million in discontinued operations. Because we did not sell the accounts receivable of CUMC, net receivables of approximately $9 million are included in our accounts receivable in the accompanying Consolidated Balance Sheet at December 31, 2012. | |||||||||||
In May 2012, we completed the sale of Diagnostic Imaging Services, Inc. (“DIS”), our former diagnostic imaging center business in Louisiana, for net proceeds of approximately $10 million. As a result of the sale, DIS was reclassified into discontinued operations in the three months ended June 30, 2012, and a gain on sale of approximately $2 million was recognized in discontinued operations. | |||||||||||
We recorded a $6 million impairment charge in discontinued operations during the year ended December 31, 2011 for the write-down of goodwill related to DIS. Material adverse trends in our estimates of future operating results of the centers at that time, primarily due to our limited market presence, indicated that the carrying value of the goodwill exceeded its fair value. As a result, we reduced the carrying value of the goodwill to its fair value as determined based on an appraisal. | |||||||||||
Net operating revenues and loss before income taxes reported in discontinued operations are as follows: | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net operating revenues | $ | 7 | $ | 154 | $ | 216 | |||||
Loss before income taxes | (7 | ) | (101 | ) | (41 | ) | |||||
Included in loss before income taxes from discontinued operations in the year ended December 31, 2011 is approximately $14 million of expense related to the settlement of two Hurricane Katrina-related class action lawsuits, which amount is net of approximately $10 million of recoveries from our reinsurance carriers in connection with the settlement. We had previously recorded a $5 million reserve for this matter as of December 31, 2010. Also included in loss before income taxes from discontinued operations in the year ended December 31, 2011 is approximately $17 million of expense recorded in litigation and investigation costs allocable to certain of our previously divested hospitals related to changes in the reserve estimate established in connection with a governmental review and an accrual for a hospital-related tort claim. | |||||||||||
Should we dispose of additional hospitals or other assets in the future, we may incur additional asset impairment and restructuring charges in future periods. |
IMPAIRMENT_AND_RESTRUCTURING_C
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | 12 Months Ended |
Dec. 31, 2013 | |
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | ' |
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | ' |
NOTE 5. IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | |
We recognized impairment charges on long-lived assets in 2013, 2012 and 2011 because the fair values of those assets or groups of assets indicated that the carrying amount was not recoverable. The fair value estimates were derived from appraisals, established market values of comparable assets, or internal estimates of future net cash flows. These fair value estimates can change by material amounts in subsequent periods. Many factors and assumptions can impact the estimates, including the future financial results of the hospitals, how the hospitals are operated in the future, changes in health care industry trends and regulations, and the nature of the ultimate disposition of the assets. In certain cases, these fair value estimates assume the highest and best use of hospital assets in the future to a market place participant is other than as a hospital. In these cases, the estimates are based on the fair value of the real property and equipment if utilized other than as a hospital. The impairment recognized does not include the costs of closing the hospitals or other future operating costs, which could be substantial. Accordingly, the ultimate net cash realized from the hospitals, should we choose to sell them, could be significantly less than their impaired value. | |
Our impairment tests presume stable, improving or, in some cases, declining operating results in our hospitals, which are based on programs and initiatives being implemented that are designed to achieve the hospital’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. | |
As of December 31, 2013, our continuing operations consisted of two operating segments, our hospital and other operations and our Conifer subsidiary. In the three months ended December 31, 2013, we acquired 28 hospitals (plus one more under construction), 39 outpatient centers and five health plans, serving communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas, through our acquisition of Vanguard, and we moved our hospitals in Philadelphia, Pennsylvania from our Southern States region into our Northeast region. Our hospital and other operations segment was structured as follows as of December 31, 2013: | |
· Our California region included all of our hospitals and other operations in California; | |
· Our Central region included all of our hospitals and other operations in Missouri, New Mexico, Tennessee and Texas, except for those in the San Antonio or South Texas markets; | |
· Our Florida region included all of our hospitals and other operations in Florida; | |
· Our Northeast region included all of our hospitals and other operations in Illinois, Massachusetts and Pennsylvania; | |
· Our Southern States region included all of our hospitals and other operations in Alabama, Georgia, North Carolina and South Carolina; | |
· Our Detroit market region included all of our hospitals and other operations in the Detroit, Michigan area; | |
· Our Phoenix market included all of our hospitals and other operations in the Phoenix, Arizona area; | |
· Our San Antonio market included all of our hospitals and other operations in the San Antonio, Texas area; and | |
· Our South Texas market included all of our hospitals and other operations in the Brownsville, Texas and Harlingen, Texas areas. | |
We periodically incur costs to implement restructuring efforts for specific operations, which are recorded in our statement of operations as they are incurred. Our restructuring plans focus on various aspects of operations, including aligning our operations in the most strategic and cost-effective structure. Certain restructuring and acquisition-related costs are based upon estimates. Changes in estimates are recognized as they occur. | |
Year Ended December 31, 2013 | |
During the year ended December 31, 2013, we recorded impairment and restructuring charges and acquisition-related costs of $103 million. This amount included a $12 million impairment charge for the write-down of buildings and equipment and other long-lived assets, primarily capitalized software costs classified in other intangible assets, of one of our hospitals to their estimated fair values, primarily due to a decline in the fair value of real estate in the market in which the hospital operates and a decline in the estimated fair value of equipment. Material adverse trends in our most recent estimates of future undiscounted cash flows of the hospital indicated the carrying value of the hospital’s long-lived assets was not recoverable from the estimated future cash flows. We believe the most significant factors contributing to the adverse financial trends include reductions in volumes of insured patients, shifts in payer mix from commercial to governmental payers combined with reductions in reimbursement rates from governmental payers, and high levels of uninsured patients. As a result, we updated the estimate of the fair value of the hospital’s long-lived assets and compared the fair value estimate to the carrying value of the hospital’s long-lived assets. Because the fair value estimate was lower than the carrying value of the hospital’s long-lived assets, an impairment charge was recorded for the difference in the amounts. Unless the anticipated future financial trends of this hospital improve to the extent that the estimated future undiscounted cash flows exceed the carrying value of the long-lived assets, this hospital is at risk of future impairments, particularly if we spend significant amounts of capital at the hospital without generating a corresponding increase in the hospital’s fair value or if the fair value of the hospital’s real estate or equipment continues to decline. The aggregate carrying value of assets held and used of the hospital for which an impairment charge was recorded was $44 million as of December 31, 2013 after recording the impairment charge. We also recorded $16 million of restructuring costs, $14 million of employee severance costs, $2 million of lease termination costs, and $59 million in acquisition-related costs, which includes both transaction costs and acquisition integration charges. | |
Year Ended December 31, 2012 | |
During the year ended December 31, 2012, we recorded net impairment and restructuring charges of $19 million, consisting of $3 million relating to the impairment of obsolete assets, $2 million relating to other impairment charges, $8 million of employee severance costs and $6 million of other related costs. | |
Year Ended December 31, 2011 | |
During the year ended December 31, 2011, we recorded net impairment and restructuring charges of $20 million. This amount included a $6 million impairment charge for the write-down of buildings and equipment of one of our previously impaired hospitals to their estimated fair values, primarily due to a decline in the fair value of real estate in the market in which the hospital operates and a decline in the estimated fair value of equipment. Material adverse trends in our estimates of future undiscounted cash flows of the hospital at that time, consistent with our previous estimates in prior years when impairment charges were recorded at this hospital, indicated the carrying value of the hospital’s long-lived assets was not recoverable from the estimated future cash flows. We believed the most significant factors contributing to the adverse financial trends at that time included reductions in volumes of insured patients, shifts in payer mix from commercial to governmental payers combined with reductions in reimbursement rates from governmental payers, and high levels of uninsured patients. As a result, we updated the estimate of the fair value of the hospital’s long-lived assets and compared the fair value estimate to the carrying value of the hospital’s long-lived assets. Because the fair value estimate was lower than the carrying value of the hospital’s long-lived assets, an impairment charge was recorded for the difference in the amounts. The aggregate carrying value of assets held and used of the hospital for which an impairment charge was recorded was $20 million as of December 31, 2011 after recording the impairment charge. In addition, we also recorded impairment charges of $1 million in connection with the sale of seven medical office buildings in Texas, $1 million related to a cost basis investment, $7 million in employee severance costs, $3 million in lease termination costs, $1 million of acceleration of stock-based compensation costs and $1 million of other related costs. |
LONGTERM_DEBT_AND_LEASE_OBLIGA
LONG-TERM DEBT AND LEASE OBLIGATIONS | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ||||||||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ||||||||||||||||||||||
NOTE 6. LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||||||||
The table below shows our long-term debt as of December 31, 2013 and 2012: | |||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Senior notes: | |||||||||||||||||||||||
73/8%, due 2013 | $ | 0 | $ | 55 | |||||||||||||||||||
97/8%, due 2014 | 60 | 60 | |||||||||||||||||||||
91/4%, due 2015 | 474 | 474 | |||||||||||||||||||||
63/4%, due 2020 | 300 | 300 | |||||||||||||||||||||
8%, due 2020 | 750 | 750 | |||||||||||||||||||||
81/8%, due 2022 | 2,800 | 0 | |||||||||||||||||||||
67/8%, due 2031 | 430 | 430 | |||||||||||||||||||||
Senior secured notes: | |||||||||||||||||||||||
61/4%, due 2018 | 1,041 | 1,041 | |||||||||||||||||||||
10%, due 2018 | 0 | 714 | |||||||||||||||||||||
87/8%, due 2019 | 0 | 925 | |||||||||||||||||||||
43/4%, due 2020 | 500 | 500 | |||||||||||||||||||||
6%, due 2020 | 1,800 | 0 | |||||||||||||||||||||
41/2%, due 2021 | 850 | 0 | |||||||||||||||||||||
43/8%, due 2021 | 1,050 | 0 | |||||||||||||||||||||
Credit facility due 2016 | 405 | 0 | |||||||||||||||||||||
Capital leases and mortgage notes | 407 | 119 | |||||||||||||||||||||
Unamortized note discounts and premium | (28 | ) | (116 | ) | |||||||||||||||||||
Total long-term debt | 10,839 | 5,252 | |||||||||||||||||||||
Less current portion | 149 | 94 | |||||||||||||||||||||
Long-term debt, net of current portion | $ | 10,690 | $ | 5,158 | |||||||||||||||||||
Credit Agreement | |||||||||||||||||||||||
We have a senior secured revolving credit facility (as amended, “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. The Credit Agreement has a scheduled maturity date of November 29, 2016, subject to our repayment or refinancing on or before November 3, 2014 of approximately $238 million of the aggregate outstanding principal amount of our 91/4% senior notes due 2015 (approximately $474 million of which was outstanding at December 31, 2013). If such repayment or refinancing does not occur, borrowings under the Credit Agreement will be due November 3, 2014. The revolving credit facility is collateralized by patient accounts receivable of all of our wholly owned acute care and specialty hospitals. In addition, borrowings under the Credit Agreement are guaranteed by our wholly owned hospital subsidiaries. Outstanding revolving loans accrued interest during a six-month initial period that ended in May 2012 at the rate of either (i) a base rate plus a margin of 1.25% or (ii) the London Interbank Offered Rate (“LIBOR”) plus a margin of 2.25% per annum. Outstanding revolving loans now accrue interest at a base rate plus a margin ranging from 1.00% to 1.50% or LIBOR plus a margin ranging from 2.00% to 2.50% per annum based on available credit. An unused commitment fee was payable on the undrawn portion of the revolving loans at a six-month initial rate that ended in May 2012 of 0.438% per annum. The unused commitment fee now ranges from 0.375% to 0.500% per annum based on available credit. Our borrowing availability is based on a specified percentage of eligible accounts receivable, including self-pay accounts. At December 31, 2013, we had $405 million of cash borrowings outstanding under the revolving credit facility subject to an interest rate of 2.38%, and we had approximately $189 million of standby letters of credit outstanding. Based on our eligible receivables, approximately $406 million was available for borrowing under the revolving credit facility at December 31, 2013. | |||||||||||||||||||||||
Senior Notes and Senior Secured Notes | |||||||||||||||||||||||
In October 2013, we sold $2.8 billion aggregate principal amount of 81/8% senior notes, which will mature on April 1, 2022, and $1.8 billion aggregate principal amount of 6% senior secured notes, which will mature on October 1, 2020. We will pay interest on the 81/8% senior notes and 6% senior secured notes semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2014. The proceeds from the sale of the notes were used to finance the acquisition of Vanguard. | |||||||||||||||||||||||
In May 2013, we sold $1.050 billion aggregate principal amount of 43/8% senior secured notes, which will mature on October 1, 2021. We will pay interest on the 43/8% senior secured notes semi-annually in arrears on January 1 and July 1 of each year, commencing on January 1, 2014. We used a portion of the proceeds from the sale of the notes to purchase approximately $767 million aggregate principal amount outstanding of our 87/8% senior secured notes due 2019 in a tender offer and to call approximately $158 million of the remaining aggregate principal amount outstanding of those notes. In connection with the purchase, we recorded a loss from early extinguishment of debt of $171 million, primarily related to the difference between the purchase prices and the par values of the purchased notes, as well as the write-off of unamortized note discounts and issuance costs. | |||||||||||||||||||||||
In February 2013, we sold $850 million aggregate principal amount of 41/2% senior secured notes, which will mature on April 1, 2021. We will pay interest on the 41/2% senior secured notes semi-annually in arrears on April 1 and October 1 of each year, which payments commenced on October 1, 2013. We used a portion of the proceeds from the sale of the notes to purchase approximately $645 million aggregate principal amount outstanding of our 10% senior secured notes due 2018 in a tender offer and to call approximately $69 million of the remaining aggregate principal amount outstanding of those notes. In connection with the purchase, we recorded a loss from early extinguishment of debt of $177 million, primarily related to the difference between the purchase prices and the par values of the purchased notes, as well as the write-off of unamortized note discounts and issuance costs. The remaining net proceeds were used for general corporate purposes, including the repayment of borrowings under our senior secured revolving credit facility. | |||||||||||||||||||||||
In October 2012, we sold $500 million aggregate principal amount of 43/4% senior secured notes due 2020 and $300 million aggregate principal amount of 63/4% senior notes due 2020. The 43/4% senior secured notes will mature on June 1, 2020, and the 63/4% senior notes will mature on February 1, 2020. We will pay interest on the 43/4% senior secured notes semi-annually in arrears on June 1 and December 1 of each year, commencing on June 1, 2013. We will pay interest on the 63/4% senior notes semi-annually in arrears on February 1 and August 1 of each year; payments commenced on February 1, 2013. We used a portion of the proceeds from the sale of the notes to purchase $161 million aggregate principal amount outstanding of our 73/8% senior notes due 2013 in a tender offer. In connection with the purchase, we recorded a loss from early extinguishment of debt of approximately $4 million primarily related to the difference between the purchase prices and the par values of the purchased notes. | |||||||||||||||||||||||
In April 2012, we issued an additional $141 million aggregate principal amount of our 61/4% senior secured notes due 2018 at a premium for $142 million of cash proceeds and an additional $150 million aggregate principal amount of our 8% senior notes due 2020 in a private financing related to our repurchase and subsequent retirement of 298,700 shares of our 7% mandatory convertible preferred stock. | |||||||||||||||||||||||
All of our senior notes are general unsecured senior debt obligations that rank equally in right of payment with all of our other unsecured senior indebtedness, but are effectively subordinated to our senior secured notes described below, the obligations of our subsidiaries and any obligations under our Credit Agreement to the extent of the collateral. We may redeem any series of our senior notes, in whole or in part, at any time at a redemption price equal to 100% of the principal amount of the notes redeemed, plus a make-whole premium specified in the applicable indenture, together with accrued and unpaid interest to the redemption date. | |||||||||||||||||||||||
All of our senior secured notes are guaranteed by our wholly owned hospital company subsidiaries and secured by a first-priority pledge of the capital stock and other ownership interests of those subsidiaries. All of our senior secured notes and the related subsidiary guarantees are our and the subsidiary guarantors’ senior secured obligations. All of our senior secured notes rank equally in right of payment with all of our other senior secured indebtedness. Our senior secured notes rank senior to any subordinated indebtedness that we or such subsidiary guarantors may incur; they are effectively senior to our and such subsidiary guarantors’ existing and future unsecured indebtedness and other liabilities to the extent of the value of the collateral securing the notes and the subsidiary guarantees; they are effectively subordinated to our and such subsidiary guarantors’ obligations under our Credit Agreement to the extent of the value of the collateral securing borrowings thereunder; and they are structurally subordinated to all obligations of our non-guarantor subsidiaries. | |||||||||||||||||||||||
The indentures setting forth the terms of our senior secured notes contain provisions governing our ability to redeem the notes and the terms by which we may do so. At our option, we may redeem our 43/4% senior secured notes and our 61/4% senior secured notes, in whole or in part, at any time at a redemption price equal to 100% of the principal amount of the notes redeemed plus the make-whole premium set forth in the related indenture, together with accrued and unpaid interest thereon, if any, to the redemption date. In addition, we, at our option, may redeem our 87/8% and 10% senior secured notes, in whole or in part, or on or prior to July 1, 2014 in the case of the 87/8% senior secured notes and May 1, 2014 in the case of the 10% senior secured notes, at a redemption price equal to 100% of the principal amount of the notes redeemed plus the applicable make-whole premium set forth in the applicable indenture, together with accrued and unpaid interest thereon, if any, to the redemption date. At any time or from time to time after July 1, 2014 in the case of the 87/8% senior secured notes and May 1, 2014 in the case of the 10% senior secured notes, we, at our option, may redeem the notes, in whole or in part, at the redemption prices set forth in the applicable indenture, together with accrued and unpaid interest thereon, if any, to the redemption date. | |||||||||||||||||||||||
In addition, we may be required to purchase for cash all or any part of each series of our senior secured notes upon the occurrence of a change of control (as defined in the applicable indentures) for a cash purchase price of 101% of the aggregate principal amount of the notes, plus accrued and unpaid interest. | |||||||||||||||||||||||
Covenants | |||||||||||||||||||||||
Our Credit Agreement contains customary covenants for an asset-backed facility, including a minimum fixed charge coverage ratio to be met when the available credit under the revolving credit facility falls below $80 million, as well as limits on debt, asset sales and prepayments of senior debt. The Credit Agreement also includes a provision, which we believe is customary in receivables-backed credit facilities, that gives our banks the right to require that proceeds of collections of substantially all of our consolidated accounts receivable be applied directly to repay outstanding loans and other amounts that are due and payable under the Credit Agreement at any time that unused borrowing availability under the revolving credit facility is less than $100 million or if an event of default has occurred and is continuing thereunder. In that event, we would seek to re-borrow under the Credit Agreement to satisfy our operating cash requirements. Our ability to borrow under the Credit Agreement is subject to conditions that we believe are customary in revolving credit facilities, including that no events of default then exist. | |||||||||||||||||||||||
The indentures governing our senior notes contain covenants and conditions that have, among other requirements, limitations on (1) liens on principal properties and (2) sale and lease-back transactions with respect to principal properties. A principal property is defined in the indentures as a hospital that has an asset value on our books in excess of 5% of our consolidated net tangible assets, as defined. The above limitations do not apply, however, to (1) debt that is not secured by principal properties or (2) debt that is secured by principal properties if the aggregate of such secured debt does not exceed 15% of our consolidated net tangible assets, as further described in the indentures. The indentures also prohibit the consolidation, merger or sale of all or substantially all assets unless no event of default would result after giving effect to such transaction. | |||||||||||||||||||||||
The indentures governing our senior secured notes contain covenants that, among other things, restrict our ability and the ability of our subsidiaries to incur liens, consummate asset sales, enter into sale and lease-back transactions or consolidate, merge or sell all or substantially all of our or their assets, other than in certain transactions between one or more of our wholly owned subsidiaries. These restrictions, however, are subject to a number of important exceptions and qualifications. In particular, there are no restrictions on our ability or the ability of our subsidiaries to incur additional indebtedness, make restricted payments, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, enter into transactions with affiliates or make advances to, or invest in, other entities (including unaffiliated entities). In addition, the indentures governing our senior secured notes contain a covenant that neither we nor any of our subsidiaries will incur secured debt, unless at the time of and after giving effect to the incurrence of such debt, the aggregate amount of all such secured debt (including the aggregate principal amount of senior secured notes outstanding at such time) does not exceed the greater of (i) $3.2 billion or (ii) the amount that would cause the secured debt ratio (as defined in the indentures) to exceed 4.0 to 1.0; provided that the aggregate amount of all such debt secured by a lien on par to the lien securing the senior secured notes may not exceed the greater of (a) $2.6 billion or (b) the amount that would cause the secured debt ratio to exceed 3.0 to 1.0. | |||||||||||||||||||||||
Future Maturities | |||||||||||||||||||||||
Future long-term debt maturities and minimum operating lease payments as of December 31, 2013 are as follows: | |||||||||||||||||||||||
Years Ending December 31, | Later | ||||||||||||||||||||||
Total | 2014 | 2015 | 2016 | 2017 | 2018 | Years | |||||||||||||||||
Long-term debt, including capital lease obligations | $ | 10,867 | $ | 149 | $ | 539 | $ | 430 | $ | 49 | $ | 1,047 | $ | 8,653 | |||||||||
Long-term non-cancelable operating leases | $ | 663 | $ | 137 | $ | 117 | $ | 102 | $ | 80 | $ | 56 | $ | 171 | |||||||||
Rental expense under operating leases, including short-term leases, was $186 million, $156 million and $143 million in the years ended December 31, 2013, 2012 and 2011, respectively. Included in rental expense for each of these periods was sublease income of $8 million, which were recorded as a reduction to rental expense. |
GUARANTEES
GUARANTEES | 12 Months Ended |
Dec. 31, 2013 | |
GUARANTEES | ' |
GUARANTEES | ' |
NOTE 7. GUARANTEES | |
Consistent with our policy on physician relocation and recruitment, we provide income guarantee agreements to certain physicians who agree to relocate to fill a community need in the service area of one of our hospitals and commit to remain in practice in the area for a specified period of time. Under such agreements, we are required to make payments to the physicians in excess of the amounts they earn in their practices up to the amount of the income guarantee. The income guarantee periods are typically 12 months. If a physician does not fulfill his or her commitment period to the community, which is typically three years subsequent to the guarantee period, we seek recovery of the income guarantee payments from the physician on a prorated basis. We also provide revenue collection guarantees to hospital-based physician groups providing certain services at our hospitals with terms generally ranging from one to three years. | |
At December 31, 2013, 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 $108 million. We had a liability of $78 million recorded for these guarantees included in other current liabilities at December 31, 2013. | |
We have also guaranteed minimum rent revenue to certain landlords who built medical office buildings on or near our hospital campuses. The maximum potential amount of future payments under these guarantees at December 31, 2013 was $16 million. We had a liability of $2 million recorded for these guarantees at December 31, 2013, of which $1 million was included in other current liabilities and $1 million was included in other long-term liabilities. |
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | ||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | ||||||||||||||||||||||
NOTE 8. EMPLOYEE BENEFIT PLANS | |||||||||||||||||||||||
Share-Based Compensation Plans | |||||||||||||||||||||||
We currently grant stock-based awards to our directors and key employees pursuant to our 2008 Stock Incentive Plan, which was approved by our shareholders at their 2008 annual meeting. At December 31, 2013, approximately 2.1 million shares of common stock were available under our 2008 Stock Incentive Plan for future stock option grants and other incentive awards, including restricted stock units. Options have an exercise price equal to the fair market value of the shares on the date of grant and generally expire 10 years from the date of grant. A restricted stock unit is a contractual right to receive one share of our common stock or the equivalent value in cash in the future. Options and restricted stock units typically vest one-third on each of the first three anniversary dates of the grant; however, from time to time, we grant performance-based options and restricted stock units that vest subject to the achievement of specified performance goals within a specified timeframe. | |||||||||||||||||||||||
Our income from continuing operations for the years ended December 31, 2013, 2012 and 2011 includes $39 million, $33 million and $25 million, respectively, of pretax compensation costs related to our stock-based compensation arrangements ($24 million, $21 million and $15 million, respectively, after-tax, excluding the impact of the deferred tax valuation allowance). The table below shows certain stock option and restricted stock unit grants and other awards that comprise the $37 million of stock-based compensation expense recorded in salaries, wages and benefits in the year ended December 31, 2013. Compensation cost is measured by the fair value of the awards on their grant dates and is recognized over the requisite service period of the awards, whether or not the awards had any intrinsic value during the period. | |||||||||||||||||||||||
Grant Date | Awards | Exercise Price | Fair Value | Stock-Based | |||||||||||||||||||
Per Share | Per Share at | Compensation Expense | |||||||||||||||||||||
Grant Date | for Year Ended | ||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
(In Thousands) | (In Millions) | ||||||||||||||||||||||
Stock Options: | |||||||||||||||||||||||
February 28, 2013 | 266 | $ | 39.31 | $ | 14.46 | $ | 1 | ||||||||||||||||
February 29, 2012 | 355 | $ | 22.6 | 11.96 | 2 | ||||||||||||||||||
Restricted Stock Units: | |||||||||||||||||||||||
October 31, 2013 | 178 | 47.19 | 1 | ||||||||||||||||||||
June 13, 2013 | 318 | 47.13 | 1 | ||||||||||||||||||||
May 6, 2013 | 30 | 47 | -1 | 1 | |||||||||||||||||||
February 28, 2013 | 841 | 39.31 | 7 | ||||||||||||||||||||
February 29, 2012 | 987 | 22.6 | 6 | ||||||||||||||||||||
January 31, 2012 | 64 | 21.16 | 2 | ||||||||||||||||||||
November 4, 2011 | 60 | 19.44 | -1 | 1 | |||||||||||||||||||
February 23, 2011 | 890 | 27.6 | 9 | ||||||||||||||||||||
Other grants | 6 | ||||||||||||||||||||||
$ | 37 | ||||||||||||||||||||||
(1) End of month fair market value was used for this grant to calculate compensation expense. | |||||||||||||||||||||||
Prior to our shareholders approving the 2008 Stock Incentive Plan, we granted stock-based awards to our directors and employees pursuant to other plans. Stock options remain outstanding under those other plans, but no additional stock-based awards will be granted under them. | |||||||||||||||||||||||
Pursuant to the terms of our stock-based compensation plans, awards granted under the plans vest and may be exercised as determined by the compensation committee of our board of directors. In the event of a change in control, the compensation committee may, at its sole discretion without obtaining shareholder approval, accelerate the vesting or performance periods of the awards. | |||||||||||||||||||||||
Stock Options | |||||||||||||||||||||||
The following table summarizes stock option activity during the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||
Options | Weighted | Aggregate | Weighted | ||||||||||||||||||||
Average | Intrinsic | Average | |||||||||||||||||||||
Exercise | Value | Remaining | |||||||||||||||||||||
Price Per | Life | ||||||||||||||||||||||
Share | |||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||
Outstanding as of December 31, 2010 | 10,788,887 | 39.88 | |||||||||||||||||||||
Granted | 0 | ||||||||||||||||||||||
Exercised | (629,021 | ) | 5.24 | ||||||||||||||||||||
Forfeited/Expired | (1,661,473 | ) | 128.92 | ||||||||||||||||||||
Outstanding as of December 31, 2011 | 8,498,393 | 25.04 | |||||||||||||||||||||
Granted | 477,500 | 22.79 | |||||||||||||||||||||
Exercised | (3,657,127 | ) | 5.77 | ||||||||||||||||||||
Forfeited/Expired | (1,029,574 | ) | 69.72 | ||||||||||||||||||||
Outstanding as of December 31, 2012 | 4,289,192 | 30.49 | |||||||||||||||||||||
Granted | 295,639 | 39.41 | |||||||||||||||||||||
Exercised | (946,086 | ) | 23.34 | ||||||||||||||||||||
Forfeited/Expired | (330,634 | ) | 55.79 | ||||||||||||||||||||
Outstanding as of December 31, 2013 | 3,308,111 | $ | 30.79 | $ | 41 | 3.3 years | |||||||||||||||||
Vested and expected to vest at December 31, 2013 | 3,294,282 | $ | 30.76 | $ | 41 | 3.3 years | |||||||||||||||||
Exercisable as of December 31, 2013 | 2,776,320 | $ | 30.66 | $ | 36 | 2.8 years | |||||||||||||||||
There were 946,086 stock options exercised during the year ended December 31, 2013 with a $18 million aggregate intrinsic value, and 3,657,127 stock options exercised in 2012 with a $71 million aggregate intrinsic value. | |||||||||||||||||||||||
As of December 31, 2013, there were $4 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 1.7 years. | |||||||||||||||||||||||
In the year ended December 31, 2013, we granted an aggregate of 295,639 stock options under our 2008 Stock Incentive Plan to certain of our senior officers. These stock options will all vest on the third anniversary of the grant date, subject to the terms of the plan, and will expire on the fifth anniversary of the grant date. In the year ended December 31, 2012, we granted an aggregate of 477,500 stock options under our 2008 Stock Incentive Plan to certain of our senior officers; 257,500 of these stock options are subject to time-vesting and 220,000 of these stock options were granted subject to performance-based vesting. Because all conditions were met, the performance-based options will vest and be settled ratably over a three-year period from the grant date. | |||||||||||||||||||||||
The weighted average estimated fair value of stock options we granted in the year ended December 31, 2013 and 2012 was $14.46 and $12.05 per share, respectively. These fair values were calculated based on each grant date, using a binomial lattice model with the following assumptions: | |||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Expected volatility | 50% | 52% | |||||||||||||||||||||
Expected dividend yield | 0% | 0% | |||||||||||||||||||||
Expected life | 3.6 years | 6.9 years | |||||||||||||||||||||
Expected forfeiture rate | 6% | 2% | |||||||||||||||||||||
Risk-free interest rate | 0.48% | 1.06%-1.41% | |||||||||||||||||||||
Early exercise threshold | 100% gain | 70% gain | |||||||||||||||||||||
Early exercise rate | 50% per year | 20% per year | |||||||||||||||||||||
The expected volatility used in the binomial lattice model incorporated historical and implied share-price volatility and was based on an analysis of historical prices of our stock and open-market exchanged options. The expected volatility reflects the historical volatility for a duration consistent with the contractual life of the options, and the volatility implied by the trading of options to purchase our stock on open-market exchanges. The historical share-price volatility excludes the movements in our stock price on two dates (one in 2010 and one in 2011) with unusual volatility due to an unsolicited acquisition proposal. The expected life of options granted is derived from the output of the binomial lattice model and represents the period of time that the options are expected to be outstanding. This model incorporates an early exercise assumption in the event of a significant increase in stock price. 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 timeframes. | |||||||||||||||||||||||
The following table summarizes information about our outstanding stock options at December 31, 2013: | |||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||
Range of Exercise Prices | Number of | Weighted Average | Weighted Average | Number of | Weighted Average | ||||||||||||||||||
Options | Remaining | Exercise Price | Options | Exercise Price | |||||||||||||||||||
Contractual Life | |||||||||||||||||||||||
$0.00 to $4.569 | 324,542 | 5.1 years | $ | 4.56 | 324,542 | $ | 4.56 | ||||||||||||||||
$4.57 to $25.089 | 1,027,963 | 5.9 years | 20.83 | 774,623 | 20.17 | ||||||||||||||||||
$25.09 to $32.569 | 518,804 | 2.5 years | 29.64 | 518,804 | 29.64 | ||||||||||||||||||
$32.57 to $42.529 | 798,781 | 2.2 years | 41.17 | 520,330 | 42.17 | ||||||||||||||||||
$42.53 to $55.129 | 638,021 | 0.2 years | 48.11 | 638,021 | 48.11 | ||||||||||||||||||
3,308,111 | 3.3 years | $ | 30.79 | 2,776,320 | $ | 30.66 | |||||||||||||||||
As of December 31, 2013, approximately 78.9% of our outstanding options were held by current employees and approximately 21.1% were held by former employees. Approximately 77.2% of our outstanding options were in-the-money, that is, they had an exercise price less than the $42.12 market price of our common stock on December 31, 2013, and approximately 22.8% were out-of-the-money, that is, they had an exercise price of more than $42.12 as shown in the table below: | |||||||||||||||||||||||
In-the-Money Options | Out-of-the-Money Options | All Options | |||||||||||||||||||||
Outstanding | % of Total | Outstanding | % of Total | Outstanding | % of Total | ||||||||||||||||||
Current employees | 2,177,530 | 85.3 | % | 433,841 | 57.4 | % | 2,611,371 | 78.9 | % | ||||||||||||||
Former employees | 375,227 | 14.7 | % | 321,513 | 42.6 | % | 696,740 | 21.1 | % | ||||||||||||||
Totals | 2,552,757 | 100 | % | 755,354 | 100 | % | 3,308,111 | 100 | % | ||||||||||||||
% of all outstanding options | 77.2 | % | 22.8 | % | 100 | % | |||||||||||||||||
Restricted Stock Units | |||||||||||||||||||||||
The following table summarizes restricted stock unit activity during the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||
Restricted Stock | Weighted Average | ||||||||||||||||||||||
Units | Grant Date Fair Value | ||||||||||||||||||||||
Per Unit | |||||||||||||||||||||||
Unvested as of December 31, 2010 | 1,580,318 | 20.56 | |||||||||||||||||||||
Granted | 1,138,350 | 27.04 | |||||||||||||||||||||
Vested | (722,471 | ) | 19.92 | ||||||||||||||||||||
Forfeited | (68,890 | ) | 23.72 | ||||||||||||||||||||
Unvested as of December 31, 2011 | 1,927,307 | 24.52 | |||||||||||||||||||||
Granted | 1,654,337 | 22.18 | |||||||||||||||||||||
Vested | (1,033,632 | ) | 23.51 | ||||||||||||||||||||
Forfeited | (252,070 | ) | 23.39 | ||||||||||||||||||||
Unvested as of December 31, 2012 | 2,295,942 | 23.4 | |||||||||||||||||||||
Granted | 1,564,224 | 41.2 | |||||||||||||||||||||
Vested | (966,838 | ) | 24.2 | ||||||||||||||||||||
Forfeited | (186,106 | ) | 29.69 | ||||||||||||||||||||
Unvested as of December 31, 2013 | 2,707,222 | $ | 33.34 | ||||||||||||||||||||
In the year ended December 31, 2013, we granted 1,122,811 restricted stock units subject to time-vesting, of which 1,023,112 will vest and be settled ratably over a three-year period from the date of the grant, 80,133 will vest 100% on the fifth anniversary of the grant date and 19,566 will vest 100% on the third anniversary of the grant date. In addition, we granted 206,058 performance-based restricted stock units to certain of our senior officers. If all conditions are met, the performance-based restricted stock units will vest and be settled ratably over a three-year period from the grant date. We also awarded a grant of 23,175 performance-based restricted stock units to one of our senior executives. If target conditions are met, 100% of this grant will vest and be settled three years from the grant date. We also awarded a grant of 212,180 restricted stock units to our chief executive officer, of which 106,090 are subject to time-vesting and 106,090 are performance-based. If target conditions are met, 50% of this grant will vest three years from the grant date and the remaining 50% will vest six years from the grant date. The award also allows for an additional 106,090 shares to be issued if higher performance criteria are met. In the year ended December 31, 2012, we granted 1,538,082 restricted units subject to time-vesting. In addition, we granted 116,255 performance-based restricted stock units to certain of our senior officers. Because all conditions were met, the performance-based restricted stock units will vest and be settled ratably over a three-year period from the grant date. | |||||||||||||||||||||||
As of December 31, 2013, there were $63 million of total unrecognized compensation costs related to restricted stock units. These costs are expected to be recognized over a weighted average period of 2.9 years. | |||||||||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||||||||
We have an employee stock purchase plan under which we are currently authorized to issue up to 5,062,500 shares of common stock to our eligible employees. As of December 31, 2013, there were approximately 405,381 shares available for issuance under our employee stock purchase plan. Under the terms of the plan, eligible employees may elect to have between 1% and 10% of their base earnings withheld each quarter to purchase shares of our common stock. Shares are purchased at a price equal to 95% of the closing price on the last day of the quarter. The plan requires a one-year holding period for all shares issued. The holding period does not apply upon termination of employment. Under the plan, no individual may purchase, in any year, shares with a fair market value in excess of $25,000. The plan is currently not considered to be compensatory. | |||||||||||||||||||||||
We sold the following numbers of shares under our employee stock purchase plan in the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||
Number of shares | 100,217 | 144,021 | 187,409 | ||||||||||||||||||||
Weighted average price | $ | 42.88 | $ | 22.81 | $ | 21.44 | |||||||||||||||||
Employee Retirement Plans | |||||||||||||||||||||||
Substantially all of our employees, upon qualification, are eligible to participate in one of our defined contribution 401(k) plans. Under the plans, employees may contribute a portion of their eligible compensation, and we match such contributions annually up to a maximum percentage for participants actively employed, as defined by the plan documents. Employer matching contributions will vary by plan. Plan expenses, primarily related to our contributions to the plan, were approximately $35 million, $32 million and $32 million for the years ended December 31, 2013, 2012 and 2011, respectively. Such amounts are reflected in salaries, wages and benefits in the accompanying Consolidated Statements of Operations. | |||||||||||||||||||||||
We maintain one active and two frozen non-qualified defined benefit pension plans (“SERPs”) that provide supplemental retirement benefits to certain of our current and former executives. These plans are not funded, and plan obligations for these plans are paid from our working capital. Pension benefits are generally based on years of service and compensation. Upon completing the acquisition of Vanguard on October 1, 2013, we assumed a frozen qualified defined benefit plan (“DMC Pension Plan”) covering substantially all of the employees of our Detroit market that were hired prior to June 1, 2003. The benefits paid under the DMC Pension Plan are primarily based on years of service and final average earnings. The following tables summarize the balance sheet impact, as well as the benefit obligations, funded status and rate assumptions associated with the SERPs and the DMC Pension Plan based on actuarial valuations prepared as of December 31, 2013 and 2012: | |||||||||||||||||||||||
December 31, | |||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Reconciliation of funded status of plans and the amounts included in the Consolidated Balance Sheets: | |||||||||||||||||||||||
Projected benefit obligations(1) | |||||||||||||||||||||||
Beginning obligations | $ | (312 | ) | $ | (285 | ) | |||||||||||||||||
Assumed from acquisition | (1,037 | ) | (0 | ) | |||||||||||||||||||
Service cost | (2 | ) | (2 | ) | |||||||||||||||||||
Interest cost | (25 | ) | (14 | ) | |||||||||||||||||||
Actuarial gain(loss) | 44 | (30 | ) | ||||||||||||||||||||
Plan changes | (2 | ) | (0 | ) | |||||||||||||||||||
Benefits paid/employer contributions | 31 | 19 | |||||||||||||||||||||
Ending obligations | (1,303 | ) | (312 | ) | |||||||||||||||||||
Fair value of plans assets | |||||||||||||||||||||||
Beginning obligations | (0 | ) | (0 | ) | |||||||||||||||||||
Assumed from acquisition | 863 | (0 | ) | ||||||||||||||||||||
Gain on plan assets | 34 | (0 | ) | ||||||||||||||||||||
Benefits paid | (11 | ) | (0 | ) | |||||||||||||||||||
Ending plan assets | 886 | (0 | ) | ||||||||||||||||||||
Funded status of plans | $ | (417 | ) | $ | (312 | ) | |||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets consist of: | |||||||||||||||||||||||
Other current liability | $ | (19 | ) | $ | (20 | ) | |||||||||||||||||
Other long-term liability | (398 | ) | (292 | ) | |||||||||||||||||||
Accumulated other comprehensive loss | 22 | 90 | |||||||||||||||||||||
$ | (395 | ) | $ | (222 | ) | ||||||||||||||||||
SERP Assumptions: | |||||||||||||||||||||||
Discount rate | 5 | % | 4 | % | |||||||||||||||||||
Compensation increase rate | 3 | % | 3 | % | |||||||||||||||||||
Measurement date | December 31, 2013 | December 31, 2012 | |||||||||||||||||||||
DMC Pension Plan Assumptions: | |||||||||||||||||||||||
Discount rate | 5.18 | % | n/a | ||||||||||||||||||||
Compensation increase rate | Frozen | n/a | |||||||||||||||||||||
Measurement date | December 31, 2013 | n/a | |||||||||||||||||||||
(1) The accumulated benefit obligation at December 31, 2013 and 2012 was approximately $1,297 million and $308 million, respectively. | |||||||||||||||||||||||
The components of net periodic benefit costs and related assumptions are as follows: | |||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||
Service costs | $ | 2 | $ | 2 | $ | 2 | |||||||||||||||||
Interest costs | 25 | 14 | 14 | ||||||||||||||||||||
Amortization of prior-year service costs | (15 | ) | 0 | 0 | |||||||||||||||||||
Amortization of net actuarial loss | 7 | 5 | 3 | ||||||||||||||||||||
Net periodic benefit cost | $ | 19 | $ | 21 | $ | 19 | |||||||||||||||||
SERP Assumptions: | |||||||||||||||||||||||
Discount rate | 4 | % | 5 | % | 5.5 | % | |||||||||||||||||
Long-term rate of return on assets | n/a | n/a | n/a | ||||||||||||||||||||
Compensation increase rate | 3 | % | 3 | % | 3 | % | |||||||||||||||||
Measurement date | January 1, 2013 | January 1, 2012 | January 1, 2011 | ||||||||||||||||||||
Census date | January 1, 2013 | January 1, 2012 | January 1, 2011 | ||||||||||||||||||||
DMC Pension Plan Assumptions: | |||||||||||||||||||||||
Discount rate | 5.01 | % | n/a | n/a | |||||||||||||||||||
Long-term rate of return on assets | 7 | % | n/a | n/a | |||||||||||||||||||
Compensation increase rate | Frozen | n/a | n/a | ||||||||||||||||||||
Measurement date | October 1, 2013 | n/a | n/a | ||||||||||||||||||||
Census date | January 1, 2013 | n/a | n/a | ||||||||||||||||||||
Net periodic benefit costs for the current year are based on assumptions determined at the valuation date of the prior year for the SERPs and at the date of acquisition for the DMC Pension Plan. | |||||||||||||||||||||||
We recorded gain/(loss) adjustments of $68 million, ($25) million and ($15) million in other comprehensive income (loss) in the years ended December 31, 2013, 2012 and 2011, respectively, to recognize changes in the funded status of our SERPs and the DMC Pension Plan. Changes in the funded status are recorded as a direct increase or decrease to shareholders’ equity through accumulated other comprehensive loss. Net actuarial gains/(losses) of $63 million, ($30) million and ($19) million during the years ended December 31, 2013, 2012 and 2011, respectively, and the amortization of net prior service costs of less than $1 million for the years ended December 31, 2013, 2012 and 2011 were recognized in other comprehensive income (loss). Cumulative net actuarial losses of $21 million, $90 million and $65 million as of December 31, 2013, 2012 and 2011, respectively, and unrecognized prior service costs of less than $1 million as of each of the years ended December 31, 2013, 2012 and 2011, have not yet been recognized as components of net periodic benefit costs. | |||||||||||||||||||||||
To develop the expected long-term rate of return on plan assets assumption, the DMC Pension Plan considers the current level of expected returns on risk-free investments (primarily government bonds), the historical level of risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns on each asset class. The expected return for each asset class is then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio. The weighted-average asset allocations by asset category as of December 31, 2013, were as follows: | |||||||||||||||||||||||
Asset Category | Target | Actual | |||||||||||||||||||||
Cash and cash equivalents | 6 | % | 6 | % | |||||||||||||||||||
United States government obligations | 1 | % | 1 | % | |||||||||||||||||||
Equity securities | 45 | % | 51 | % | |||||||||||||||||||
Debt Securities | 48 | % | 42 | % | |||||||||||||||||||
The DMC Pension Plan assets are invested in separately managed portfolios using investment management firms. The objective for all asset categories is to maximize total return without assuming undue risk exposure. The DMC Pension Plan maintains a well-diversified asset allocation that best meets these objectives. The DMC Pension Plan assets are largely comprised of equity securities, which include companies with various market capitalization sizes in addition to international and convertible securities. Cash and cash equivalents are comprised of money market funds. Debt securities include domestic and foreign government obligations, corporate bonds, and mortgage-backed securities. Under the investment policy of the DMC Pension Plan, investments in derivative securities are not permitted for the sole purpose of speculating on the direction of market interest rates. Included in this prohibition are leveraging, shorting, swaps, futures, options, forwards, and similar strategies. | |||||||||||||||||||||||
In each investment account, the DMC Pension Plan investment managers are responsible to monitor and react to economic indicators, such as gross domestic product, consumer price index and U.S. monetary policy that may affect the performance of their account. The performance of all managers and the aggregate asset allocation are formally reviewed on a quarterly basis, with a rebalancing of the asset allocation occurring at least once a year. The current asset allocation objective is to maintain a certain percentage with each class allowing for a 10% deviation from the target. | |||||||||||||||||||||||
The following tables summarize the DMC Pension Plan assets measured at fair value on a recurring basis as of December 31, 2013, aggregated by the level in the fair value hierarchy within which those measurements are determined. Fair value methodologies for Level 1, Level 2 and Level 3 are consistent with the inputs described in Note 18. | |||||||||||||||||||||||
December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
Cash and cash equivalents | $ | 53 | $ | 53 | $ | — | $ | — | |||||||||||||||
United States government obligations | 5 | 5 | — | — | |||||||||||||||||||
Corporate bonds | 376 | 376 | — | — | |||||||||||||||||||
Equity securities | 452 | 452 | — | — | |||||||||||||||||||
$ | 886 | $ | 886 | $ | — | $ | — | ||||||||||||||||
The following table presents the estimated future benefit payments to be made from the SERPs and the DMC Pension Plan, a portion of which will be funded from plan assets, for the next five years and in the aggregate for the five years thereafter: | |||||||||||||||||||||||
Years Ending December 31, | Five Years | ||||||||||||||||||||||
Total | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | |||||||||||||||||
Estimated benefit payments | $ | 841 | $ | 88 | $ | 74 | $ | 76 | $ | 80 | $ | 82 | $ | 441 | |||||||||
The SERP and DMC Pension Plan obligations of $417 million at December 31, 2013 are classified in the accompanying Consolidated Balance Sheet as an other current liability ($19 million) and defined benefit plan obligations ($398 million) based on an estimate of the expected payment patterns. We expect to make total contributions to the plans of approximately $28 million for the year ending December 31, 2014. |
CAPITAL_COMMITMENTS
CAPITAL COMMITMENTS | 12 Months Ended |
Dec. 31, 2013 | |
CAPITAL COMMITMENTS | ' |
CAPITAL COMMITMENTS | ' |
NOTE 9. CAPITAL COMMITMENTS | |
In connection with Vanguard’s acquisition of Detroit Medical Center, certain capital commitments were agreed upon to be satisfied at particular dates. If these commitments are not met by these required dates, we are required to escrow cash for the purpose of funding certain capital projects. There was no required escrow balance as of December 31, 2013. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PROPERTY AND EQUIPMENT | ' | |||||||
PROPERTY AND EQUIPMENT | ' | |||||||
NOTE 10. PROPERTY AND EQUIPMENT | ||||||||
The principal components of property and equipment are shown in the table below: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Land | $ | 589 | $ | 341 | ||||
Buildings and improvements | 6,369 | 4,087 | ||||||
Construction in progress | 593 | 140 | ||||||
Equipment | 4,038 | 3,219 | ||||||
11,589 | 7,787 | |||||||
Accumulated depreciation and amortization | (3,898 | ) | (3,494 | ) | ||||
Net property and equipment | $ | 7,691 | $ | 4,293 | ||||
Property and equipment is stated at cost, less accumulated depreciation and amortization and impairment write-downs related to assets held and used. |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||||||||
NOTE 11. GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||||||||
The following table provides information on changes in the carrying amount of goodwill, which is included in the accompanying Consolidated Balance Sheets as of December 31, 2013 and 2012: | |||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Hospital Operations and other | |||||||||||||||||||||||
As of January 1: | |||||||||||||||||||||||
Goodwill | $ | 3,268 | $ | 3,166 | |||||||||||||||||||
Accumulated impairment losses | (2,430 | ) | (2,430 | ) | |||||||||||||||||||
Total | 838 | 736 | |||||||||||||||||||||
Goodwill acquired during the year and purchase price allocation adjustments | 2,121 | 104 | |||||||||||||||||||||
Goodwill allocated to hospital sold | (0 | ) | (2 | ) | |||||||||||||||||||
Impairment of goodwill | 0 | 0 | |||||||||||||||||||||
Total | $ | 2,959 | $ | 838 | |||||||||||||||||||
As of December 31: | |||||||||||||||||||||||
Goodwill | $ | 5,389 | $ | 3,268 | |||||||||||||||||||
Accumulated impairment losses | (2,430 | ) | (2,430 | ) | |||||||||||||||||||
Total | $ | 2,959 | $ | 838 | |||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Conifer | |||||||||||||||||||||||
As of January 1: | |||||||||||||||||||||||
Goodwill | $ | 78 | $ | 0 | |||||||||||||||||||
Accumulated impairment losses | 0 | 0 | |||||||||||||||||||||
Total | 78 | 0 | |||||||||||||||||||||
Goodwill acquired during the year and purchase price allocation adjustments | 5 | 78 | |||||||||||||||||||||
Total | $ | 83 | $ | 78 | |||||||||||||||||||
As of December 31: | |||||||||||||||||||||||
Goodwill | $ | 83 | $ | 78 | |||||||||||||||||||
Accumulated impairment losses | 0 | 0 | |||||||||||||||||||||
Total | $ | 83 | $ | 78 | |||||||||||||||||||
The following table provides information regarding other intangible assets, which are included in the accompanying Consolidated Balance Sheets as of December 31, 2013 and 2012: | |||||||||||||||||||||||
Gross | Accumulated | Net Book | |||||||||||||||||||||
Carrying | Amortization | Value | |||||||||||||||||||||
Amount | |||||||||||||||||||||||
As of December 31, 2013: | |||||||||||||||||||||||
Capitalized software costs | $ | 1,260 | $ | (475 | ) | $ | 785 | ||||||||||||||||
Long-term debt issuance costs | 230 | (31 | ) | 199 | |||||||||||||||||||
Trade Names | 81 | 0 | 81 | ||||||||||||||||||||
Contracts | 64 | (2 | ) | 62 | |||||||||||||||||||
Other | 80 | (15 | ) | 65 | |||||||||||||||||||
Total | $ | 1,715 | $ | (523 | ) | $ | 1,192 | ||||||||||||||||
As of December 31, 2012: | |||||||||||||||||||||||
Capitalized software costs | $ | 927 | $ | (399 | ) | $ | 528 | ||||||||||||||||
Long-term debt issuance costs | 106 | (25 | ) | 81 | |||||||||||||||||||
Other | 43 | (2 | ) | 41 | |||||||||||||||||||
Total | $ | 1,076 | $ | (426 | ) | $ | 650 | ||||||||||||||||
Estimated future amortization of intangibles with finite useful lives as of December 31, 2013 is as follows: | |||||||||||||||||||||||
Years Ending December 31, | Later | ||||||||||||||||||||||
Total | 2014 | 2015 | 2016 | 2017 | 2018 | Years | |||||||||||||||||
Amortization of intangible assets | $ | 1,102 | $ | 224 | $ | 206 | $ | 126 | $ | 82 | $ | 77 | $ | 387 | |||||||||
INVESTMENTS_AND_OTHER_ASSETS
INVESTMENTS AND OTHER ASSETS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INVESTMENTS AND OTHER ASSETS | ' | |||||||
INVESTMENTS AND OTHER ASSETS | ' | |||||||
NOTE 12. INVESTMENTS AND OTHER ASSETS | ||||||||
The principal components of investments and other assets in our accompanying Consolidated Balance Sheets are as follows: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Marketable debt securities | $ | 62 | $ | 15 | ||||
Equity investments in unconsolidated health care entities(1) | 56 | 22 | ||||||
Total investments | 118 | 37 | ||||||
Cash surrender value of life insurance policies | 25 | 21 | ||||||
Long-term deposits | 35 | 16 | ||||||
Land held for expansion, long-term receivables and other assets | 227 | 88 | ||||||
Investments and other assets | $ | 405 | $ | 162 | ||||
(1) Equity earnings of unconsolidated affiliates are included in net operating revenues in the accompanying Consolidated Statements of Operations and were $15 million and $8 million in of the years ended December 31, 2013 and 2012, respectively. | ||||||||
Our policy is to classify investments that may be needed for cash requirements as “available-for-sale.” In doing so, the carrying values of the shares and debt instruments are adjusted at the end of each accounting period to their market values through a credit or charge to other comprehensive income (loss), net of taxes. At both December 31, 2013 and 2012, there were less than $1 million of accumulated unrealized gains on these investments. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | |||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | |||||||
NOTE 13. ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||||||
Our accumulated other comprehensive loss is comprised of the following: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Unamortized realized losses from interest rate lock derivatives | $ | — | $ | (1 | ) | |||
Adjustments for defined benefit plans | (24 | ) | (67 | ) | ||||
Accumulated other comprehensive loss | $ | (24 | ) | $ | (68 | ) | ||
There was a tax effect allocated to the adjustments for our defined benefit plans for the years ended December 31, 2013 and 2012 of $(25) million and $9 million, respectively. |
PROPERTY_AND_PROFESSIONAL_AND_
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | 12 Months Ended |
Dec. 31, 2013 | |
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | ' |
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | ' |
NOTE 14. 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. | |
Professional and General Liability Insurance | |
At December 31, 2013 and 2012, the aggregate current and long-term professional and general liability reserves in our accompanying Consolidated Balance Sheets were approximately $699 million and $356 million, respectively. These reserves include the reserves recorded by our captive insurance subsidiaries and our self-insured retention reserves recorded based on actuarial 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 2.45%, 1.18% and 1.35% at December 31, 2013, 2012 and 2011, respectively. | |
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 Consolidated Statements of Operations is malpractice expense of $112 million, $92 million and $108 million for the years ended December 31, 2013, 2012 and 2011, respectively. |
CLAIMS_AND_LAWSUITS
CLAIMS AND LAWSUITS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
CLAIMS AND LAWSUITS | ' | ||||||||||||||||
CLAIMS AND LAWSUITS | ' | ||||||||||||||||
NOTE 15. CLAIMS AND LAWSUITS | |||||||||||||||||
We operate in a highly regulated and litigious industry. As a result, we commonly become involved in disputes, litigation and regulatory matters incidental to our operations, including governmental investigations, personal injury lawsuits, employment claims and other matters arising out of the normal conduct of our business. | |||||||||||||||||
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. 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. | |||||||||||||||||
Governmental Reviews | |||||||||||||||||
Health care 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. Certain of our individual facilities have received inquiries from government agencies, and our facilities may receive such inquiries in future periods. The following material governmental reviews, which have been previously reported, are currently pending. | |||||||||||||||||
· Kyphoplasty—From March 2009 through July 2010, seven of our hospitals became the subject of a review by the U.S. Department of Justice (“DOJ”) and certain other federal agencies regarding the appropriateness of inpatient treatment for Medicare patients receiving kyphoplasty, which is a surgical procedure used to treat certain spinal conditions. We believe this review is part of a national investigation and is related to a qui tam settlement between the government and the manufacturer and distributor of Kyphon, the product used in performing kyphoplasty procedures. In January 2013, we paid $900,000 to settle potential Medicare reimbursement claims against one of our hospitals subject to this review. Management has established a reserve, as described below, to reflect the current estimate of probable liability for two of the remaining hospitals under review. We are unable to calculate an estimate of loss or a range of loss with respect to the four other hospitals because (i) our external clinical expert has not completed its report on the billing practices of two of those hospitals, and (ii) we have not reached agreement with the DOJ on the appropriate review methodology with respect to the remaining two hospitals. We are engaged in potential settlement discussions with the DOJ to resolve this matter, but it is impossible at this time to predict the outcome of those discussions or the amount of any potential resolution. | |||||||||||||||||
· Implantable Cardioverter Defibrillators (“ICDs”)—At this time, 52 of our hospitals are part of a nationwide investigation to determine if ICD procedures from 2002 to 2010 complied with Medicare coverage requirements. (The number of our hospitals under review may increase or decrease depending on the timeframe of the government’s examination, which commenced in March 2010.) In August 2012, the DOJ released its “Medical Review Guidelines/Resolution Model,” which sets out, for purposes of this investigation, the patient conditions and criteria for the medical necessity of the implantation of ICDs in Medicare beneficiaries and how the DOJ will enforce the repayment obligations of hospitals. Management has established a reserve, as described below, to reflect the current estimate of probable liability for 21 of the hospitals under review. We are unable to calculate an estimate of loss or a range of loss with respect to the 31 other hospitals because our external clinical expert has not completed its report on the billing practices of those hospitals. We are engaged in potential settlement discussions with the DOJ to resolve this matter, but it is impossible at this time to predict the outcome of those discussions or the amount of any potential resolution. | |||||||||||||||||
· Clinica de la Mama Investigations and Qui Tam Action—As previously reported, we received a subpoena in May 2012 from the Office of Inspector General (“OIG”) of U.S. Department of Health and Human Services in Atlanta seeking documents from January 2004 through May 2012 related to the relationship that certain of our Georgia and South Carolina hospitals had with Hispanic Medical Management, Inc. (“HMM”). HMM is an unaffiliated entity that owns and operates clinics that provide, among other things, prenatal care predominantly to uninsured patients. The hospitals contracted with HMM for translation, marketing, management and Medicaid eligibility determination services. The civil investigation is being conducted by the Civil Division of the DOJ, the U.S. Attorney’s Office for the Middle District of Georgia and the Georgia Attorney General’s Office, while the parallel criminal investigation is being conducted by the Criminal Division of the DOJ and the U.S. Attorney’s Office for the Northern District of Georgia. | |||||||||||||||||
The investigations arose out of a qui tam action captioned United States of America, ex. rel. Ralph D. Williams v. Health Management Associates, Inc., et al. filed in the U.S. District Court for the Middle District of Georgia. Tenet and four of its hospital subsidiaries are defendants in the qui tam action, which alleges that the arrangements the hospitals had with HMM violated the federal and state anti-kickback statutes and false claims acts. The Georgia Attorney General’s Office, on behalf of the State of Georgia, has intervened in the qui tam action and, on February 18, 2014, the Civil Division of the DOJ and the U.S. Attorney’s Office for the Middle District of Georgia filed a motion seeking leave of court to intervene in the action on behalf of the United States. Our motion to dismiss, which was filed on November 8, 2013, is pending. | |||||||||||||||||
If we or our subsidiaries were determined to have violated the anti-kickback statutes, the government could require us to reimburse related government program payments received during the subject period, assess civil monetary penalties including treble damages, exclude individuals or subsidiaries from participation in federal health care programs, or seek criminal sanctions against current or former employees of our hospital subsidiary companies or the hospital companies themselves. Management has established a reserve, as described below, to reflect the current estimate of probable liability for these matters, but it is impossible at this time to predict the amount and terms of any potential resolution. We will continue to vigorously defend against the government’s allegations. | |||||||||||||||||
Except with respect to the matter settled in January 2013 involving one hospital, as discussed above, our analysis of each of these pending reviews is still ongoing, and we are unable to predict with any certainty the progress or final outcome of any discussions with government agencies at this time. Based on currently available information, as of December 31, 2013, we had recorded reserves of approximately $27 million in the aggregate for our potential reimbursement obligations with respect to 23 hospitals under review for their billing practices for kyphoplasty and cardiac defibrillator implantation procedures, as well as the Clinica de la Mama matters. Changes in the reserves may be required in the future as additional information becomes available. We cannot predict the ultimate resolution of any governmental review, and the final amounts paid in settlement or otherwise, if any, could differ materially from our currently recorded reserves. | |||||||||||||||||
Settlement of Previously Reported Litigation | |||||||||||||||||
· Hospital-Related Tort Claim—In 2013, we settled for $8 million a previously disclosed lawsuit — which was captioned Rosenberg v. Encino-Tarzana Regional Medical Center and Tenet Healthcare Corporation — filed in January 2007 in connection with an alleged April 2006 assault at Tarzana Regional Medical Center (a hospital we divested in 2008). | |||||||||||||||||
· Class Action Lawsuits Relating to Vanguard Acquisition—In August 2013, Vanguard entered into a proposed settlement agreement with respect to two class action lawsuits filed in June 2013 on behalf of Vanguard stockholders in the Chancery Court for Davidson County, Tennessee, captioned James A. Kaurich v. Vanguard Health Systems, Inc., et al., and Marion Edinburgh TTEE FBO Marion Edinburgh Trust U/T/D/ 7/8/1991 v. Vanguard Health Systems, Inc., et al. In January 2014, the court issued a preliminary order approving the proposed settlement. The final hearing to approve the settlement is scheduled to be held in April 2014. Under the terms of the settlement, Vanguard made certain supplemental disclosures related to the acquisition, extended the period for its stockholders to exercise their appraisal rights (which has since expired), and agreed to pay the fees and expenses of the plaintiffs’ counsel. The settlement will not have a material adverse effect on our business, financial condition or results of operations. | |||||||||||||||||
Ordinary Course Matters | |||||||||||||||||
We are also subject to other claims and lawsuits arising in the ordinary course of business, including potential claims related to, among other things, the care and treatment provided at our hospitals and outpatient facilities, the application of various federal and state labor laws, tax audits and other matters. Although the results of these claims and lawsuits cannot be predicted with certainty, we believe that the ultimate resolution of these ordinary course claims and lawsuits will not have a material effect on our business, financial condition or results of operations. | |||||||||||||||||
In addition to the proceedings described above, we are defendants in a class action lawsuit in which the plaintiffs claim that in April 1996 patient identifying records from a psychiatric hospital that we closed in 1995 were temporarily placed in an unsecure location while the hospital was undergoing renovations. The lawsuit, Doe, et al. v. Jo Ellen Smith Medical Foundation, was filed in the Civil District Court for the Parish of Orleans in Louisiana in March 1997. The plaintiffs allege tortious invasion of privacy and negligent infliction of emotional distress. The plaintiffs contend that the class consists of over 5,000 persons; however, only eight individuals have been identified to date in the class certification process. The plaintiffs have asserted each member of the class is entitled to common damages under a theory of presumed “common damage” regardless of whether or not any members of the class were actually harmed or even aware of the incident. We believe there is no authority for an award of common damages under Louisiana law. In addition, we believe that there is no basis for the certification of this proceeding as a class action under applicable federal and Louisiana law precedents. The lawsuit is expected to be tried in June 2014. We are not able to estimate the reasonably possible loss or a reasonably possible range of loss given: the small number of class members that have been identified or otherwise responded to the class certification process; the novel theories asserted by plaintiffs, including their assertion that a theory of presumed common damage exists under Louisiana law; and the failure of the plaintiffs to provide any evidence of damages. We intend to vigorously contest the plaintiffs’ claims. | |||||||||||||||||
New claims or inquiries may be initiated against us from time to time. These matters could (1) require us to pay substantial damages or amounts in judgments or settlements, which individually or in the aggregate could exceed amounts, if any, that may be recovered under our insurance policies where coverage applies and is available, (2) cause us to incur substantial expenses, (3) require significant time and attention from our management, and (4) cause us to close or sell hospitals or otherwise modify the way we conduct business. | |||||||||||||||||
The table below presents reconciliations of the beginning and ending liability balances in connection with legal settlements and related costs recorded during the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||
Balances at | Litigation and | Cash | Other | Balances at | |||||||||||||
Beginning | Investigation | Payments | End of | ||||||||||||||
of Period | Costs | Period | |||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Continuing operations | $ | 5 | $ | 31 | $ | (10 | ) | $ | 14 | $ | 40 | ||||||
Discontinued operations | 5 | 2 | (1 | ) | 0 | 6 | |||||||||||
$ | 10 | $ | 33 | $ | (11 | ) | $ | 14 | $ | 46 | |||||||
Year Ended December 31, 2012 | |||||||||||||||||
Continuing operations | $ | 49 | $ | 5 | $ | (49 | ) | $ | 0 | $ | 5 | ||||||
Discontinued operations | 17 | 0 | (12 | ) | 0 | 5 | |||||||||||
$ | 66 | $ | 5 | $ | (61 | ) | $ | 0 | $ | 10 | |||||||
Year Ended December 31, 2011 | |||||||||||||||||
Continuing operations | $ | 30 | $ | 55 | $ | (36 | ) | $ | 0 | $ | 49 | ||||||
Discontinued operations | 0 | 17 | 0 | 0 | 17 | ||||||||||||
$ | 30 | $ | 72 | $ | (36 | ) | $ | 0 | $ | 66 | |||||||
For the years ended December 31, 2013, 2012 and 2011, we recorded net costs of $33 million, $5 million and $72 million, respectively, in connection with significant legal proceedings and investigations. The 2013 and 2012 amounts primarily related to costs associated with various legal proceedings and governmental reviews. The 2011 amount primarily related to costs associated with our evaluation of an unsolicited acquisition proposal received in November 2010 (which was subsequently withdrawn), changes in reserve estimates established in connection with certain governmental reviews described above, accruals for a physician privileges case and certain hospital-related tort claims, the settlement of a union arbitration claim, and costs to defend various matters. The amount for 2013 in the column entitled “Other” above relates to the reserves assumed as part of our acquisition of Vanguard in October 2013. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
INCOME TAXES | ' | |||||||||||||
INCOME TAXES | ' | |||||||||||||
NOTE 16. INCOME TAXES | ||||||||||||||
The provision for income taxes for continuing operations for the years ended December 31, 2013, 2012 and 2011 consists of the following: | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Current tax expense (benefit): | ||||||||||||||
Federal | $ | 2 | $ | (3 | ) | $ | 0 | |||||||
State | 4 | 11 | (6 | ) | ||||||||||
6 | 8 | (6 | ) | |||||||||||
Deferred tax expense (benefit): | ||||||||||||||
Federal | (56 | ) | 117 | 62 | ||||||||||
State | (15 | ) | 0 | 5 | ||||||||||
(71 | ) | 117 | 67 | |||||||||||
$ | (65 | ) | $ | 125 | $ | 61 | ||||||||
A reconciliation between the amount of reported income tax expense (benefit) and the amount computed by multiplying income (loss) from continuing operations before income taxes by the statutory federal income tax rate is shown below: | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Tax expense at statutory federal rate of 35% | $ | (55 | ) | $ | 117 | $ | 57 | |||||||
State income taxes, net of federal income tax benefit | 1 | 13 | 10 | |||||||||||
Tax attributable to noncontrolling interests | (10 | ) | (4 | ) | (4 | ) | ||||||||
Nondeductible transaction costs | 6 | 0 | 0 | |||||||||||
Other changes in valuation allowance | (2 | ) | (5 | ) | (2 | ) | ||||||||
Change in tax contingency reserves, including interest | (7 | ) | (1 | ) | (12 | ) | ||||||||
Prior-year provision to return adjustment and other changes in deferred taxes, net of valuation allowance | 3 | 3 | 7 | |||||||||||
Other items | (1 | ) | 2 | 5 | ||||||||||
$ | (65 | ) | $ | 125 | $ | 61 | ||||||||
Deferred income taxes reflect the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The following table discloses those significant components of our deferred tax assets and liabilities, including any valuation allowance: | ||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||
Depreciation and fixed-asset differences | $ | 0 | $ | 678 | $ | 0 | $ | 375 | ||||||
Reserves related to discontinued operations and restructuring charges | 20 | 0 | 5 | 0 | ||||||||||
Receivables (doubtful accounts and adjustments) | 209 | 0 | 173 | 0 | ||||||||||
Deferred gain on debt exchanges | 0 | 53 | 0 | 53 | ||||||||||
Accruals for retained insurance risks | 288 | 0 | 182 | 0 | ||||||||||
Intangible assets | 0 | 163 | 0 | 122 | ||||||||||
Other long-term liabilities | 76 | 0 | 55 | 0 | ||||||||||
Benefit plans | 299 | 0 | 214 | 0 | ||||||||||
Other accrued liabilities | 60 | 0 | 11 | 0 | ||||||||||
Investments and other assets | 0 | 45 | 6 | 0 | ||||||||||
Net operating loss carryforwards | 708 | 0 | 588 | 0 | ||||||||||
Stock-based compensation | 28 | 0 | 32 | 0 | ||||||||||
Other items | 29 | 0 | 36 | 0 | ||||||||||
1,717 | 939 | 1,302 | 550 | |||||||||||
Valuation allowance | (107 | ) | 0 | (56 | ) | 0 | ||||||||
$ | 1,610 | $ | 939 | $ | 1,246 | $ | 550 | |||||||
Below is a reconciliation of the deferred tax assets and liabilities and the corresponding amounts reported in the accompanying Consolidated Balance Sheets. | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Current portion of deferred income tax asset | $ | 581 | $ | 354 | ||||||||||
Deferred income tax asset, net of current portion | 90 | 342 | ||||||||||||
Noncurrent deferred income tax liability | 0 | 0 | ||||||||||||
Net deferred tax asset | $ | 671 | $ | 696 | ||||||||||
During the year ended December 31, 2013, the valuation allowance increased by $51 million, $34 million due to the acquisition of Vanguard and $17 million primarily due to the adjustment of deferred tax assets for state net operating loss carryforwards that have a full valuation allowance. The $107 million balance in the valuation allowance as of December 31, 2013 is primarily attributable to certain state net operating loss carryovers that, more likely than not, will expire unutilized. During the year ended December 31, 2012, we reduced the valuation allowance by an additional $5 million based on 2012 profits and projected profits for 2013. During the year ended December 31, 2011, we reduced the valuation allowance for our deferred tax assets by $5 million based on 2011 profits and projected profits for 2012. | ||||||||||||||
We account for uncertain tax positions in accordance with ASC 740-10-25, which prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The table below summarizes the total changes in unrecognized tax benefits during the years ended December 31, 2013, 2012 and 2011. The additions and reductions for tax positions include the impact of items for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductions. Such amounts include unrecognized tax benefits that have impacted deferred tax assets and liabilities at December 31, 2013, 2012 and 2011. | ||||||||||||||
Continuing | Discontinued | Total | ||||||||||||
Operations | Operations | |||||||||||||
Balance at December 31, 2010 | 34 | 1 | 35 | |||||||||||
Additions for prior-year tax positions | 15 | 0 | 15 | |||||||||||
Reductions for tax positions of prior years | (2 | ) | 0 | (2 | ) | |||||||||
Additions for current-year tax positions | 3 | 0 | 3 | |||||||||||
Reductions for current-year tax positions | 0 | 0 | 0 | |||||||||||
Reductions due to settlements with taxing authorities | (12 | ) | 0 | (12 | ) | |||||||||
Reductions due to a lapse of statute of limitations | (4 | ) | 0 | (4 | ) | |||||||||
Balance at December 31, 2011 | 34 | 1 | 35 | |||||||||||
Additions for prior-year tax positions | 0 | 0 | 0 | |||||||||||
Reductions for tax positions of prior years | (2 | ) | 0 | (2 | ) | |||||||||
Additions for current-year tax positions | 2 | 0 | 2 | |||||||||||
Reductions for current-year tax positions | 0 | 0 | 0 | |||||||||||
Reductions due to settlements with taxing authorities | (3 | ) | 0 | (3 | ) | |||||||||
Reductions due to a lapse of statute of limitations | (0 | ) | 0 | (0 | ) | |||||||||
Balance at December 31, 2012 | 31 | 1 | 32 | |||||||||||
Additions for prior-year tax positions | 15 | 0 | 15 | |||||||||||
Reductions for tax positions of prior years | (0 | ) | 0 | (0 | ) | |||||||||
Additions for current-year tax positions | 3 | 0 | 3 | |||||||||||
Reductions for current-year tax positions | 0 | 0 | 0 | |||||||||||
Reductions due to settlements with taxing authorities | (0 | ) | 0 | (0 | ) | |||||||||
Reductions due to a lapse of statute of limitations | (6 | ) | (1 | ) | (7 | ) | ||||||||
Balance at December 31, 2013 | $ | 43 | $ | 0 | $ | 43 | ||||||||
The total amount of unrecognized tax benefits as of December 31, 2013 was $43 million, of which $34 million, if recognized, would affect our effective tax rate and income tax expense (benefit) from continuing operations. Income tax expense in the year ended December 31, 2013 includes a benefit of $1 million in continuing operations attributable to a decrease in our estimated liabilities for uncertain tax positions, net of related deferred tax effects. The total amount of unrecognized tax benefits as of December 31, 2012 was $32 million, which, if recognized, would impact our effective tax rate and income tax expense (benefit) from continuing and discontinued operations. Income tax expense in the year ended December 31, 2012 includes expense of $3 million in continuing operations attributable to an increase in our estimated liabilities for uncertain tax positions, net of related deferred tax effects. The total amount of unrecognized tax benefits as of December 31, 2011 was $35 million which, if recognized, would affect our effective tax rate and income tax expense (benefit) from continuing and discontinued operations. Income tax expense in the year ended December 31, 2011 includes a benefit of $21 million ($2 million related to continuing operations and $19 million related to discontinued operations) attributable to a reduction in our estimated liabilities for uncertain tax positions, net of related deferred tax effects, primarily as a result of audit settlements and the expiration of statutes of limitation. | ||||||||||||||
Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense in our consolidated statements of operations. Approximately $1 million of interest and penalties related to accrued liabilities for uncertain tax positions related to continuing operations are included in the accompanying Consolidated Statement of Operations for the year ended December 31, 2013. Total accrued interest and penalties on unrecognized tax benefits as of December 31, 2013 were $5 million, all of which related to continuing operations. | ||||||||||||||
The Internal Revenue Service (“IRS”) has completed the audits of our tax returns for all tax years ending on or before December 31, 2007. All disputed issues with respect to these audits have been resolved and all related tax assessments (including interest) have been paid. Tax returns for years ended after December 31, 2007 are not currently under examination by the IRS. During 2011, the resolution of tax and interest computations by the IRS resulted in a net refund of tax and interest of $18 million with respect to the tax years ended May 31, 1998 through December 31, 2003, and payment of $15 million of tax and interest with respect to the tax years ended December 31, 2006 and 2007. | ||||||||||||||
As of December 31, 2013, approximately $1 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. | ||||||||||||||
At December 31, 2013, our carryforwards available to offset future taxable income consisted of (1) federal net operating loss (“NOL”) carryforwards of approximately $1.7 billion pretax expiring in 2024 to 2033, (2) approximately $19 million in alternative minimum tax credits with no expiration, (3) general business credit carryforwards of approximately $14 million expiring in 2023 through 2031, and (4) state NOL carryforwards of $3.8 billion expiring in 2014 through 2033 for which the associated deferred tax benefit, net of valuation allowance and federal tax impact, is $34 million. Our ability to utilize NOL carryforwards to reduce future taxable income may be limited under Section 382 of the Internal Revenue Code if certain ownership changes in our company occur during a rolling three-year period. These ownership changes include purchases of common stock under share repurchase programs (see Note 2), the offering of stock by us, the purchase or sale of our stock by 5% shareholders, as defined in the Treasury regulations, or the issuance or exercise of rights to acquire our stock. If such ownership changes by 5% shareholders result in aggregate increases that exceed 50 percentage points during the three-year period, then Section 382 imposes an annual limitation on the amount of our taxable income that may be offset by the NOL carryforwards or tax credit carryforwards at the time of ownership change. |
EARNINGS_LOSS_PER_COMMON_SHARE
EARNINGS (LOSS) PER COMMON SHARE | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
EARNINGS (LOSS) PER COMMON SHARE | ' | |||||||||
EARNINGS (LOSS) PER COMMON SHARE | ' | |||||||||
NOTE 17. EARNINGS (LOSS) PER COMMON SHARE | ||||||||||
The table below is a reconciliation of the numerators and denominators of our basic and diluted earnings (loss) per common share calculations for income (loss) from continuing operations for the years ended December 31, 2013, 2012 and 2011. Income (loss) is expressed in millions and weighted average shares are expressed in thousands. | ||||||||||
Income | Weighted | Per-Share | ||||||||
(Numerator) | Average | Amount | ||||||||
Shares | ||||||||||
(Denominator) | ||||||||||
Year Ended December 31, 2013 | ||||||||||
Loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | (123 | ) | 101,648 | $ | (1.21 | ) | |||
Effect of dilutive stock options and restricted stock units | 0 | 0 | 0 | |||||||
Loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | (123 | ) | 101,648 | $ | (1.21 | ) | |||
Year Ended December 31, 2012 | ||||||||||
Income available to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | 185 | 104,200 | $ | 1.77 | |||||
Effect of dilutive stock options and restricted stock units | 0 | 4,726 | (0.07 | ) | ||||||
Income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | 185 | 108,926 | $ | 1.7 | |||||
Year Ended December 31, 2011 | ||||||||||
Income available to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | 68 | 117,182 | $ | 0.58 | |||||
Effect of dilutive stock options and restricted stock units | 0 | 4,113 | (0.02 | ) | ||||||
Income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | 68 | 121,295 | $ | 0.56 | |||||
All potentially dilutive securities were excluded from the calculation of diluted earnings (loss) per share for the year ended December 31, 2013 because we did not report income from continuing operations in the period. In circumstances where we do not have income from continuing operations, the effect of stock options and other potentially dilutive securities is anti-dilutive, that is, a loss from continuing operations has the effect of making the diluted loss per share less than the basic loss per share. Had we generated income from continuing operations in that period, 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 of 2,310. Stock options (in thousands) whose exercise price exceeded the average market price of our common stock and, therefore, were not included in the computation of diluted shares for the years ended December 31, 2013, 2012 and 2011 were 755, 2,876 and 3,421 shares, respectively. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
NOTE 18. FAIR VALUE MEASUREMENTS | ||||||||||||||
Our financial assets and liabilities recorded at fair value on a recurring basis primarily relate to investments in available-for-sale securities held by our captive insurance subsidiaries. The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2013 and 2012. The following tables also indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. We consider a security that trades at least weekly to have an active market. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves. 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. | ||||||||||||||
December 31, 2013 | Quoted Prices | Significant Other | Significant | |||||||||||
in Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Investments: | ||||||||||||||
Marketable securities – current | $ | 1 | $ | 1 | $ | 0 | $ | 0 | ||||||
Investments in Reserve Yield Plus Fund | 2 | 0 | 2 | 0 | ||||||||||
Marketable debt securities – noncurrent | 62 | 23 | 38 | 1 | ||||||||||
$ | 65 | $ | 24 | $ | 40 | $ | 1 | |||||||
December 31, 2012 | Quoted Prices | Significant Other | Significant | |||||||||||
in Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Investments: | ||||||||||||||
Marketable securities – current | $ | 4 | $ | 4 | $ | 0 | $ | 0 | ||||||
Investments in Reserve Yield Plus Fund | 2 | 0 | 2 | 0 | ||||||||||
Marketable debt securities – noncurrent | 14 | 2 | 11 | 1 | ||||||||||
$ | 20 | $ | 6 | $ | 13 | $ | 1 | |||||||
There was no change in the fair value of our auction rate securities valued using significant unobservable inputs during the years ended December 31, 2013 or 2012. | ||||||||||||||
At December 31, 2013, one of our captive insurance subsidiaries held $1 million of preferred stock and other securities that were distributed from auction rate securities whose auctions have failed due to sell orders exceeding buy orders. We were not required to record an other-than-temporary impairment of these securities during the years ended December 31, 2013 or 2012. | ||||||||||||||
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, 2013 | Quoted Prices | Significant Other | Significant | |||||||||||
in Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Long-lived assets held and used | $ | 44 | $ | — | $ | 44 | $ | — | ||||||
As described in Note 5, we recorded a $12 million impairment charge in continuing operations in the year ended December 31, 2013 for the write-down of buildings, equipment and other long-lived assets, primarily capitalized software costs classified in other intangible assets, of one of our hospitals to their estimated fair values primarily due to a decline in the fair value of real estate in the market in which the hospital operates and a decline in the estimated fair value of equipment. | ||||||||||||||
The fair value of our long-term debt is based on quoted market prices (Level 1). At December 31, 2013 and 2012, the estimated fair value of our long-term debt was approximately 103.5% and 108.2%, respectively, of the carrying value of the debt. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACQUISITIONS | ' | |||||||
ACQUISITIONS | ' | |||||||
NOTE 19. ACQUISITIONS | ||||||||
During the year ended December 31, 2013, we acquired 28 hospitals (plus one more under construction), 39 outpatient centers and five health plans, serving communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas, through our acquisition of Vanguard. We also purchased the following businesses: (1) 11 ambulatory surgery centers (in one of which we had previously held a noncontrolling interest); (2) an urgent care center; (3) a provider network based in Southern California that includes contracted independent physicians, ancillary providers and hospitals; (4) a medical office building; and (5) various physician practice entities. The fair value of the consideration conveyed in the acquisitions (the “purchase price”) was $1.515 billion. | ||||||||
We are required to allocate the purchase prices of the 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 primarily for Vanguard and several recent acquisitions; therefore, those purchase price allocations are subject to adjustment once the valuations are completed. During the year ended December 31, 2013, we made adjustments to purchase price allocations for businesses acquired in 2012 that increased goodwill by approximately $5 million. | ||||||||
During the year ended December 31, 2012, we acquired a diagnostic imaging center, an oncology center, an urgent care center, a health plan, a cyberknife center in which we previously held a noncontrolling interest, a majority interest in nine ambulatory surgery centers (in one of which we had previously held a noncontrolling interest), as well as 20 physician practice entities and a physician practice management company in which we had previously held a noncontrolling interest as part of our Hospital Operations and other segment. Also during the year ended December 31, 2012, our Conifer segment acquired an information management and services company and a hospital revenue cycle management business. The purchase price was $211 million. | ||||||||
Preliminary purchase price allocations for all the acquisitions made during the years ended December 31, 2013 and 2012 are as follows: | ||||||||
2013 | 2012 | |||||||
Current assets | $ | 1,058 | $ | 19 | ||||
Property and equipment | 3,134 | 24 | ||||||
Other intangible assets | 166 | 53 | ||||||
Goodwill | 2,121 | 182 | ||||||
Investments and other assets | 83 | 0 | ||||||
Other long-term assets | 126 | 0 | ||||||
Current liabilities | (1,024 | ) | (23 | ) | ||||
Deferred tax liabilities | (174 | ) | 0 | |||||
Long-term liabilities | (3,741 | ) | (7 | ) | ||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | (175 | ) | 0 | |||||
Noncontrolling interests | (49 | ) | (37 | ) | ||||
Net cash paid | $ | 1,515 | $ | 211 | ||||
Gain on business combination | $ | 10 | $ | 0 | ||||
The goodwill generated from these transactions, the majority of which will not be deductible for income tax purposes, can be attributed to the benefits that we expect to realize from operating efficiencies and increased reimbursement. Approximately $52 million and $6 million in transaction costs related to prospective and closed acquisitions were expensed during the years ended December 31, 2013 and 2012, respectively, and are included in impairment and restructuring charges, and acquisition-related costs in the accompanying Consolidated Statements of Operations. | ||||||||
Included in equity earnings of unconsolidated affiliates is $10 million of earnings associated with stepping up our basis in a previously held investment in an ambulatory surgery center in which we acquired a controlling interest and are now consolidating for the year ended December 31, 2013. | ||||||||
Acquisition of Vanguard Health Systems | ||||||||
Effective October 1, 2013, we acquired the common stock of Vanguard for $21 per share in an all cash transaction. Vanguard owned and operated 28 hospitals (plus one more under construction), 39 outpatient centers and five health plans with approximately 140,000 members, serving communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas. We paid approximately $4.3 billion to acquire Vanguard, including the assumption of $2.5 billion of Vanguard’s net debt. We have not yet finalized the analysis required to complete the purchase price allocation for this acquisition and the related disclosures. | ||||||||
The preliminary purchase price allocation for our Vanguard acquisition is as follows: | ||||||||
Current assets | $ | 1,054 | ||||||
Investments and other assets | 82 | |||||||
Property and equipment | 3,074 | |||||||
Other long term assets | 118 | |||||||
Other intangible assets | 108 | |||||||
Goodwill | 1,936 | |||||||
Current liabilities | (1,012 | ) | ||||||
Deferred taxes long term | (161 | ) | ||||||
Long-term liabilities | (3,726 | ) | ||||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | (165 | ) | ||||||
Noncontrolling interests | (7 | ) | ||||||
Net cash paid | $ | 1,301 | ||||||
Pro Forma Information - Unaudited | ||||||||
The following table provides certain pro forma financial information for Tenet as if the Vanguard Health Systems acquisition had occurred at the beginning of the year ended December 31, 2012. | ||||||||
Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Net operating revenues | $ | 15,650 | $ | 15,140 | ||||
Income (loss) from continuing operations , before income taxes | $ | (294 | ) | $ | 294 |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SEGMENT INFORMATION | ' | ||||||||||
SEGMENT INFORMATION | ' | ||||||||||
NOTE 20. SEGMENT INFORMATION | |||||||||||
In the three months ended June 30, 2012, we began reporting Conifer as a separate reportable business segment. Our other segment is Hospital Operations and other. Historically, our business has consisted of one reportable segment. However, during the three months ended June 30, 2012, our Hospital Operations and other segment and our Conifer subsidiary entered into formal agreements, pursuant to which it was agreed that services provided by both parties to each other would be billed based on estimated third-party pricing terms. 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 core business is Hospital Operations and other, which is focused on owning and operating acute care hospitals and outpatient facilities. We also own various related health care businesses. At December 31, 2013, our subsidiaries operated 77 hospitals with a total of 20,293 licensed beds, primarily serving urban and suburban communities, as well as 183 outpatient centers, six health plans and six accountable care networks. | |||||||||||
We operate revenue cycle management and patient communications and engagement services businesses under our Conifer subsidiary. In addition, Conifer operates a management services business that supports value-based performance through clinical integration, financial risk management and population health management. At December 31, 2013, Conifer provided services to more than 700 Tenet and non-Tenet hospital and other clients nationwide. | |||||||||||
As mentioned above, in 2012, our Conifer subsidiary and our Hospital Operations and other segment entered into formal agreements documenting terms and conditions of various services provided by Conifer to Tenet hospitals, as well as certain administrative services provided by our Hospital Operations and other segment to Conifer. The services provided by both parties under these agreements are charged to the other party based on estimated third-party pricing terms. In 2011, the services provided by both parties were charged to the other party based on an estimate of the internal costs to provide such services. The amounts in the tables directly below reflect the services being charged based on estimated third-party terms in 2013 and 2012, but not in 2011. | |||||||||||
The following table includes amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Consolidated Balance Sheets and Consolidated Statements of Operations: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Assets: | |||||||||||
Hospital Operations and other | $ | 15,874 | $ | 8,825 | $ | 8,389 | |||||
Conifer | 256 | 219 | 73 | ||||||||
Total | $ | 16,130 | $ | 9,044 | $ | 8,462 | |||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Capital expenditures: | |||||||||||
Hospital Operations and other Core Services | $ | 670 | $ | 495 | $ | 461 | |||||
Conifer | 21 | 13 | 14 | ||||||||
Total | $ | 691 | $ | 508 | $ | 475 | |||||
Net operating revenues: | |||||||||||
Hospital Operations and other | $ | 10,587 | $ | 9,002 | $ | 8,575 | |||||
Conifer | |||||||||||
Tenet | 404 | 371 | 261 | ||||||||
Other customers | 515 | 117 | 79 | ||||||||
11,506 | 9,490 | 8,915 | |||||||||
Intercompany eliminations | (404 | ) | (371 | ) | (261 | ) | |||||
Total | $ | 11,102 | $ | 9,119 | $ | 8,654 | |||||
Adjusted EBITDA: | |||||||||||
Hospital Operations and other Core Services | $ | 1,210 | $ | 1,098 | $ | 1,083 | |||||
Conifer | 132 | 105 | 43 | ||||||||
Total | $ | 1,342 | $ | 1,203 | $ | 1,126 | |||||
Depreciation and amortization: | |||||||||||
Hospital Operations and other Core Services | $ | 526 | $ | 420 | $ | 389 | |||||
Conifer | 19 | 10 | 9 | ||||||||
Total | $ | 545 | $ | 430 | $ | 398 | |||||
Adjusted EBITDA | $ | 1,342 | $ | 1,203 | $ | 1,126 | |||||
Depreciation and amortization | (545 | ) | (430 | ) | (398 | ) | |||||
Impairment and restructuring charges, and acquisition-related costs | (103 | ) | (19 | ) | (20 | ) | |||||
Litigation and investigation costs | (31 | ) | (5 | ) | (55 | ) | |||||
Interest expense | (474 | ) | (412 | ) | (375 | ) | |||||
Loss from early extinguishment of debt | (348 | ) | (4 | ) | (117 | ) | |||||
Investment earnings | 1 | 1 | 3 | ||||||||
Income (loss) before income taxes | $ | (158 | ) | $ | 334 | $ | 164 |
RECENT_ACCOUNTING_STANDARDS
RECENT ACCOUNTING STANDARDS | 12 Months Ended |
Dec. 31, 2013 | |
RECENT ACCOUNTING STANDARDS | ' |
RECENT ACCOUNTING STANDARDS | ' |
NOTE 21. RECENT ACCOUNTING STANDARDS | |
Changes in Accounting Principle | |
Effective January 1, 2011, we adopted ASU 2010-24, “Health Care Entities (Topic 954): Presentation of Insurance Claims and Related Insurance Recoveries,” which clarifies that a health care entity should not net insurance recoveries against a related claim liability. The adoption had no impact on our financial condition, results of operations or cash flows. | |
Effective January 1, 2011, we adopted ASU 2010-23, “Health Care Entities (Topic 954): Measuring Charity Care for Disclosure,” which prescribes a specific measurement basis of charity care for disclosure. The adoption had no impact on our financial condition, results of operations or cash flows. | |
Effective December 31, 2011, we adopted ASU 2011-07, “Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities,” which requires health care entities to present the provision for doubtful accounts relating to patient service revenue as a deduction from patient service revenue in the statement of operations rather than as an operating expense. Additional disclosures relating to sources of patient revenue and the allowance for doubtful accounts related to patient accounts receivable are also required. Such additional disclosures are included in Notes 1 and 3. The adoption of this ASU had no impact on our financial condition, results of operations or cash flows. | |
Effective December 31, 2012, we adopted ASU 2012-02, “Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment,” which permits an entity to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test as described in Topic 350. The adoption of this standard had no impact on our financial condition, results of operations or cash flows | |
Recently Issued Accounting Standards | |
In July 2013, the FASB issued, ASU No. 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 addresses the diversity in practice that exists for the balance sheet presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU No. 2013-11 is effective for our fiscal quarter ending March 31, 2014. ASU 2013-11 impacts balance sheet presentation only. We do not expect the adoption of this standard to impact our balance sheet. |
SCHEDULE_IIVALUATION_AND_QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | ' | |||||||||||||||||||
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | ' | |||||||||||||||||||
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||||||||
(In Millions) | ||||||||||||||||||||
Additions Charged To: | ||||||||||||||||||||
Balance at | Costs and | Other | Deductions(3) | Other | Balance at | |||||||||||||||
Beginning | Expenses(1)(2) | Accounts | Items(4) | End of | ||||||||||||||||
of Period | Period | |||||||||||||||||||
Allowance for doubtful accounts: | ||||||||||||||||||||
Year ended December 31, 2013 | $ | 401 | $ | 975 | $ | — | $ | (787 | ) | $ | — | $ | 589 | |||||||
Year ended December 31, 2012 | $ | 397 | $ | 789 | $ | — | $ | (785 | ) | $ | — | $ | 401 | |||||||
Year ended December 31, 2011 | $ | 352 | $ | 721 | $ | — | $ | (676 | ) | $ | — | $ | 397 | |||||||
Valuation allowance for deferred tax assets | ||||||||||||||||||||
Year ended December 31, 2013 | $ | 56 | $ | 23 | $ | (1 | ) | $ | — | $ | 29 | $ | 107 | |||||||
Year ended December 31, 2012 | $ | 61 | $ | (5 | ) | $ | — | $ | — | $ | — | $ | 56 | |||||||
Year ended December 31, 2011 | $ | 66 | $ | (5 | ) | $ | — | $ | — | $ | — | $ | 61 | |||||||
(1) Includes amounts recorded in discontinued operations. | ||||||||||||||||||||
(2) Before considering recoveries on accounts or notes previously written off. | ||||||||||||||||||||
(3) Accounts written off. | ||||||||||||||||||||
(4) Vanguard acquisition. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
Basis of Presentation | ' | ||||||||||
Basis of Presentation | |||||||||||
Our Consolidated Financial Statements include the accounts of Tenet and its wholly owned and majority-owned subsidiaries. We eliminate intercompany accounts and transactions in consolidation, and we include the results of operations of businesses that are newly acquired in purchase transactions from their dates of acquisition. We account for significant investments in other affiliated companies using the equity method. Unless otherwise indicated, all financial and statistical data included in these notes to our Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). Certain balances in the accompanying Consolidated Financial Statements and these notes have been reclassified to give retrospective presentation for the discontinued operations described in Note 4. Furthermore, all amounts related to shares, share prices and earnings per share have been restated to give retrospective presentation for the reverse stock split described in Note 2. | |||||||||||
Effective October 1, 2013, we acquired the common stock of Vanguard Health Systems, Inc. (“Vanguard”) for $21 per share in an all cash transaction. Vanguard owned and operated 28 hospitals (plus one more under construction), 39 outpatient centers and five health plans with approximately 140,000 members, serving communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas. We paid approximately $4.3 billion to acquire Vanguard, including the assumption of $2.5 billion of Vanguard’s net debt. | |||||||||||
Use of Estimates | ' | ||||||||||
Use of Estimates | |||||||||||
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America (“GAAP”), requires us to make estimates and assumptions that affect the amounts reported in our 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. Although we believe all adjustments considered necessary for a fair presentation have been included, 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. | |||||||||||
Net Operating Revenues before Provision for Doubtful Accounts | ' | ||||||||||
Net Operating Revenues Before Provision for Doubtful Accounts | |||||||||||
We recognize net operating revenues before provision for doubtful accounts in the period in which our services are performed. Net operating revenues before provision for doubtful accounts primarily consist of net patient service revenues that are recorded based on established billing rates (i.e., gross charges), less estimated discounts for contractual and other allowances, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under ourCompact with Uninsured Patients (“Compact”) and other uninsured discount and charity programs. | |||||||||||
Gross charges are retail charges. They are not the same as actual pricing, and they generally do not reflect what a hospital is ultimately paid and, therefore, are not displayed in our consolidated statements of operations. Hospitals are typically paid amounts that are negotiated with insurance companies or are set by the government. Gross charges are used to calculate Medicare outlier payments and to determine certain elements of payment under managed care contracts (such as stop-loss payments). Because Medicare requires that a hospital’s gross charges be the same for all patients (regardless of payer category), gross charges are also what hospitals charge all other patients prior to the application of discounts and allowances. | |||||||||||
Revenues under the traditional fee-for-service Medicare and Medicaid programs are based primarily on prospective payment systems. Retrospectively determined cost-based revenues under these programs, which were more prevalent in earlier periods, and certain other payments, such as Indirect Medical Education, Direct Graduate Medical Education, disproportionate share hospital and bad debt expense, which are based on our hospitals’ cost reports, are estimated using historical trends and current factors. Cost report settlements under these programs are subject to audit by Medicare and Medicaid auditors and administrative and judicial review, and it can take several years until final settlement of such matters is determined and completely resolved. Because the laws, regulations, instructions and rule interpretations governing Medicare and Medicaid reimbursement are complex and change frequently, the estimates recorded by us could change by material amounts. | |||||||||||
We have a system and estimation process for recording Medicare net patient revenue and estimated cost report settlements. This results in us recording accruals to reflect the expected final settlements on our cost reports. For filed cost reports, we record the accrual based on those cost reports and subsequent activity, and record a valuation allowance against those cost reports based on historical settlement trends. The accrual for periods for which a cost report is yet to be filed is recorded based on estimates of what we expect to report on the filed cost reports, and a corresponding valuation allowance is recorded as previously described. Cost reports generally must be filed within five months after the end of the annual cost reporting period. After the cost report is filed, the accrual and corresponding valuation allowance may need to be adjusted. Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the years ended December 31, 2013, 2012 and 2011 by $38 million, $114 million ($81 million related to the industry-wide Medicare Budget Neutrality settlement), and $1 million, respectively. Estimated cost report settlements and valuation allowances are included in accounts receivable in the accompanying Consolidated Balance Sheets (see Note 3). 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. | |||||||||||
Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per-diem rates, discounted fee-for-service rates and/or other similar contractual arrangements. These revenues are also subject to review and possible audit by the payers, which can take several years before they are completely resolved. The payers are billed for patient services on an individual patient basis. An individual patient’s bill is subject to adjustment on a patient-by-patient basis in the ordinary course of business by the payers following their review and adjudication of each particular bill. We estimate the discounts for contractual allowances at the individual hospital level utilizing billing data on an individual patient basis. At the end of each month, on an individual hospital basis, we estimate our expected reimbursement for patients of managed care plans based on the applicable contract terms. Contractual allowance estimates are periodically reviewed for accuracy by taking into consideration known contract terms as well as payment history. Although we do not separately accumulate and disclose the aggregate amount of adjustments to the estimated reimbursement for every patient bill, we believe our estimation and review process enables us to identify instances on a timely basis where such estimates need to be revised. We do not believe there were any adjustments to estimates of patient bills that were material to our revenues. In addition, on a corporate-wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans. Managed care accounts, net of contractual allowances recorded, are further reduced to their net realizable value through provision for doubtful accounts based on historical collection trends for these payers and other factors that affect the estimation process. | |||||||||||
We know of no material claims, disputes or unsettled matters with any payer that would affect our revenues for which we have not adequately provided for in the accompanying Consolidated Financial Statements. | |||||||||||
Under our Compact or other uninsured discount programs, the discount offered to certain uninsured patients is recognized as a contractual allowance, which reduces net operating revenues at the time the self-pay accounts are recorded. The uninsured patient accounts, net of contractual allowances recorded, are further reduced to their net realizable value through provision for doubtful accounts based on historical collection trends for self-pay accounts and other factors that affect the estimation process. | |||||||||||
We also provide charity care to patients who are financially unable to pay for the health care services they receive. Most patients who qualify for charity care are charged a per-diem amount for services received, subject to a cap. Except for the per-diem amounts, our policy is not to pursue collection of amounts determined to qualify as charity care; therefore, we do not report these amounts in net operating revenues or in provision for doubtful accounts. Patient advocates from Conifer’s Medical Eligibility Program screen patients in the hospital to determine whether those patients meet eligibility requirements for financial assistance programs. They also expedite the process of applying for these government programs. | |||||||||||
The table below shows the sources of net operating revenues before provision for doubtful accounts from continuing operations: | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
General Hospitals: | |||||||||||
Medicare | $ | 2,357 | $ | 2,195 | $ | 2,068 | |||||
Medicaid | 975 | 783 | 802 | ||||||||
Managed care | 6,277 | 5,382 | 5,128 | ||||||||
Indemnity, self-pay and other | 1,201 | 1,007 | 958 | ||||||||
Acute care hospitals — other revenue | 78 | 69 | 105 | ||||||||
Other: | |||||||||||
Other operations | 1,186 | 468 | 310 | ||||||||
Net operating revenues before provision for doubtful accounts | $ | 12,074 | $ | 9,904 | $ | 9,371 | |||||
Provision for Doubtful Accounts | ' | ||||||||||
Provision for Doubtful Accounts | |||||||||||
Although outcomes vary, our policy is to attempt to collect amounts due from patients, including co-pays and deductibles due from patients with insurance, at the time of service while complying with all federal and state laws and regulations, including, but not limited to, the Emergency Medical Treatment and Active Labor Act (“EMTALA”). Generally, as required by EMTALA, patients may not be denied emergency treatment due to inability to pay. Therefore, services, including the legally required medical screening examination and stabilization of the patient, are performed without delaying to obtain insurance information. In non-emergency circumstances or for elective procedures and services, it is our policy to verify insurance prior to a patient being treated; however, there are various exceptions that can occur. Such exceptions can include, for example, instances where (1) we are unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid or Victims of Crime, and it takes several days or weeks before qualification for such benefits is confirmed or denied, and (3) under physician orders we provide services to patients that require immediate treatment. | |||||||||||
We provide for an allowance against accounts receivable that could become uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. Generally, we estimate this allowance based on the aging of our accounts receivable by hospital, our historical collection experience by hospital and for each type of payer over a look-back period, and other relevant factors. A significant portion of our provision for doubtful accounts relates to self-pay patients, as well as co-pays and deductibles owed to us by patients with insurance. Payment pressure from managed care payers also affects our provision for doubtful accounts. We typically experience ongoing managed care payment delays and disputes; however, we continue to work with these payers to obtain adequate and timely reimbursement for our services. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on unemployment rates and the number of uninsured and underinsured patients, the volume of patients through our emergency departments, the increased burden of co-pays and deductibles to be made by patients with insurance, and business practices related to collection efforts. These factors continuously change and can have an impact on collection trends and our estimation process. | |||||||||||
Electronic Health Record Incentives | ' | ||||||||||
Electronic Health Record Incentives | |||||||||||
Under certain provisions of the American Recovery and Reinvestment Act of 2009 (“ARRA”), federal incentive payments are available to hospitals, physicians and certain other professionals (“Providers”) when they adopt, implement or upgrade (“AIU”) certified electronic health record (“EHR”) technology or become “meaningful users,” as defined under ARRA, of EHR technology in ways that demonstrate improved quality, safety and effectiveness of care. Providers can become eligible for annual Medicare incentive payments by demonstrating meaningful use of EHR technology in each period over four periods. Medicaid providers can receive their initial incentive payment by satisfying AIU criteria, but must demonstrate meaningful use of EHR technology in subsequent years in order to qualify for additional payments. Hospitals may be eligible for both Medicare and Medicaid EHR incentive payments; however, physicians and other professionals may be eligible for either Medicare or Medicaid incentive payments, but not both. Hospitals that are meaningful users under the Medicare EHR incentive payment program are deemed meaningful users under the Medicaid EHR incentive payment program and do not need to meet additional criteria imposed by a state. Medicaid EHR incentive payments to Providers are 100% federally funded and administered by the states. The Centers for Medicare and Medicaid Services (“CMS”) established calendar year 2011 as the first year states could offer EHR incentive payments. Before a state may offer EHR incentive payments, the state must submit and CMS must approve the state’s incentive plan. | |||||||||||
We recognize Medicaid EHR incentive payments in our consolidated statements of operations for the first payment year when: (1) CMS approves a state’s EHR incentive plan; and (2) our hospital or employed physician acquires certified EHR technology (i.e., when AIU criteria are met). Medicaid EHR incentive payments for subsequent payment years are recognized in the period during which the specified meaningful use criteria are met. We recognize Medicare EHR incentive payments when: (1) the specified meaningful use criteria are met; and (2) contingencies in estimating the amount of the incentive payments to be received are resolved. During the years ended December 31, 2013, 2012 and 2011, certain of our hospitals and physicians satisfied the CMS AIU and/or meaningful use criteria. As a result, we recognized approximately $96 million, $40 million and $55 million of Medicare and Medicaid EHR incentive payments as a reduction to expense in our Consolidated Statement of Operations for years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||
Cash Equivalents | ' | ||||||||||
Cash Equivalents | |||||||||||
We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were approximately $113 million and $364 million at December 31, 2013 and 2012, respectively. As of December 31, 2013 and 2012, our book overdrafts were approximately $245 million and $232 million, respectively, which were classified as accounts payable. | |||||||||||
At December 31, 2013 and 2012, approximately $62 million and $65 million, respectively, of total cash and cash equivalents in the accompanying Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries. | |||||||||||
Also at December 31, 2013 and 2012, we had $193 million and $98 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $138 million and $93 million, respectively, were included in accounts payable. | |||||||||||
During the years ended December 31, 2013 and 2012, we entered into non-cancellable capital leases of approximately $341 million and $88 million, respectively, primarily for buildings and equipment. | |||||||||||
Investments in Debt and Equity Securities | ' | ||||||||||
Investments in Debt and Equity Securities | |||||||||||
We classify investments in debt and equity securities as either available-for-sale, held-to-maturity or as part of a trading portfolio. At December 31, 2013 and 2012, we had no significant investments in securities classified as either held-to-maturity or trading. We carry securities classified as available-for-sale at fair value. We report their unrealized gains and losses, net of taxes, as accumulated other comprehensive income (loss) unless we determine that a loss is other-than-temporary, at which point we would record a loss in our consolidated statements of operations. We include realized gains or losses in our consolidated statements of operations based on the specific identification method. | |||||||||||
Property and Equipment | ' | ||||||||||
Property and Equipment | |||||||||||
Additions and improvements to property and equipment exceeding established minimum amounts with a useful life greater than one year are capitalized at cost. Expenditures for maintenance and repairs are charged to expense as incurred. We use the straight-line method of depreciation for buildings, building improvements and equipment. The estimated useful life for buildings and improvements is primarily 15 to 40 years and, for equipment, three to 15 years. Newly constructed hospitals are usually depreciated over 50 years. We record capital leases at the beginning of the lease term as assets and liabilities. The value recorded is the lower of either the present value of the minimum lease payments or the fair value of the asset. Such assets, including improvements, are generally amortized over the shorter of either the lease term or their estimated useful life. Interest costs related to construction projects are capitalized. In the years ended December 31, 2013, 2012 and 2011, capitalized interest was $14 million, $6 million and $8 million, respectively. | |||||||||||
We evaluate our long-lived assets for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future undiscounted cash flows. If the estimated future undiscounted cash flows are less than the carrying value of the assets, we calculate the amount of an impairment if the carrying value of the long-lived assets exceeds the fair value of the assets. The fair value of the assets is estimated based on appraisals, established market values of comparable assets or internal estimates of future net cash flows expected to result from the use and ultimate disposition of the asset. The estimates of these future cash flows are based on assumptions and projections we believe to be reasonable and supportable. They require our subjective judgments and take into account assumptions about revenue and expense growth rates. These assumptions may vary by type of facility and presume stable, improving or, in some cases, declining results at our hospitals, depending on their circumstances. | |||||||||||
We report long-lived assets to be disposed of at the lower of their carrying amounts or fair values less costs to sell. In such circumstances, our estimates of fair value are based on appraisals, established market prices for comparable assets or internal estimates of future net cash flows. | |||||||||||
Asset Retirement Obligations | ' | ||||||||||
Asset Retirement Obligations | |||||||||||
We recognize the fair value of a liability for legal obligations associated with asset retirements, primarily related to asbestos abatement and costs associated with underground storage tanks, in the period in which it is incurred if a reasonable estimate of the fair value of the obligation can be made. When the liability is initially recorded, we capitalize the cost of the asset retirement obligation by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost associated with the retirement obligation is depreciated over the useful life of the related asset. Upon settlement of the obligation, any difference between the cost to settle the asset retirement obligation and the liability recorded is recognized as a gain or loss in our consolidated statements of operations. | |||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||
Goodwill and Other Intangible Assets | |||||||||||
Goodwill represents the excess of costs over the fair value of assets of businesses acquired. Goodwill and other intangible assets acquired in purchase business combinations and determined to have indefinite useful lives are not amortized, but instead are subject to impairment tests performed at least annually. For goodwill, we perform the test at the reporting unit level when events occur that require an evaluation to be performed or at least annually. If we determine the carrying value of goodwill is impaired, or if the carrying value of a business that is to be sold or otherwise disposed of exceeds its fair value, we reduce the carrying value, including any allocated goodwill, to fair value. Estimates of fair value are based on appraisals, established market prices for comparable assets or internal estimates of future net cash flows and presume stable, improving or, in some cases, declining results at our hospitals, depending on their circumstances. | |||||||||||
Other intangible assets primarily consist of capitalized software costs, which are amortized on a straight-line basis over the estimated useful life of the software, which ranges from three to 15 years. Also included in intangible assets are costs associated with the issuance of our long-term debt, which are primarily being amortized under the effective interest method based on the terms of the specific notes, and miscellaneous intangible assets related to our acquisition of Vanguard. | |||||||||||
Accruals for General and Professional Liability Risks | ' | ||||||||||
Accruals for General and Professional Liability Risks | |||||||||||
We accrue for estimated professional and general liability claims, when they are probable and can be reasonably estimated. The accrual, which includes an estimate for incurred but not reported claims, is updated each quarter based on an actuarial calculation of projected payments using case-specific facts and circumstances and our historical loss reporting, development and settlement patterns and is discounted to its net present value using a risk-free discount rate (2.45% at December 31, 2013 and 1.18% at December 31, 2012). To the extent that subsequent claims information varies from our estimates, the liability is adjusted in the period such information becomes available. Malpractice expense is presented within other operating expenses in the accompanying Consolidated Statements of Operations. | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | |||||||||||
We account for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Income tax receivables and liabilities and deferred tax assets and liabilities are recognized based on the amounts that more likely than not will be sustained upon ultimate settlement with taxing authorities. | |||||||||||
Developing our provision for income taxes and analysis of uncertain tax positions items requires significant judgment and knowledge of federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. | |||||||||||
We assess the realization of our deferred tax assets to determine whether an income tax valuation allowance is required. Based on all available evidence, both positive and negative, and the weight of that evidence to the extent such evidence can be objectively verified, we determine whether it is more likely than not that all or a portion of the deferred tax assets will be realized. The main factors that we consider include: | |||||||||||
· Cumulative profits/losses in recent years, adjusted for certain nonrecurring items; | |||||||||||
· Income/losses expected in future years; | |||||||||||
· Unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels; | |||||||||||
· The availability, or lack thereof, of taxable income in prior carryback periods that would limit realization of tax benefits; and | |||||||||||
· The carryforward period associated with the deferred tax assets and liabilities. | |||||||||||
We consider many factors when evaluating our uncertain tax positions, and such judgments are subject to periodic review. Tax benefits associated with uncertain tax positions are recognized in the period in which one of the following conditions is satisfied: (1) the more likely than not recognition threshold is satisfied; (2) the position is ultimately settled through negotiation or litigation; or (3) the statute of limitations for the taxing authority to examine and challenge the position has expired. Tax benefits associated with an uncertain tax position are derecognized in the period in which the more likely than not recognition threshold is no longer satisfied. | |||||||||||
Segment Reporting | ' | ||||||||||
Segment Reporting | |||||||||||
We primarily operate acute care hospitals and related health care facilities. Our general hospitals generated 90.2%, 95.3% and 96.7% of our net operating revenues before provision for doubtful accounts in the years ended December 31, 2013, 2012 and 2011, respectively. Each of our operating regions and markets reports directly to our president of hospital operations. Major decisions, including capital resource allocations, are made at the consolidated level, not at the regional, market or hospital level. | |||||||||||
Historically, our business has consisted of one reportable segment, Hospital Operations and other. However, during 2012, our Hospital Operations and other segment and our Conifer subsidiary entered into formal agreements, pursuant to which it was agreed that services provided by both parties to each other would be billed based on estimated third-party pricing terms. As a result, we have presented Conifer as a separate reportable business segment for all periods presented. 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. | |||||||||||
Costs Associated With Exit or Disposal Activities | ' | ||||||||||
Costs Associated With Exit or Disposal Activities | |||||||||||
We recognize costs associated with exit (including restructuring) or disposal activities when they are incurred and can be measured at fair value, rather than at the date of a commitment to an exit or disposal plan. |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
Schedule of sources of net operating revenues before provision for doubtful accounts from continuing operations | ' | ||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
General Hospitals: | |||||||||||
Medicare | $ | 2,357 | $ | 2,195 | $ | 2,068 | |||||
Medicaid | 975 | 783 | 802 | ||||||||
Managed care | 6,277 | 5,382 | 5,128 | ||||||||
Indemnity, self-pay and other | 1,201 | 1,007 | 958 | ||||||||
Acute care hospitals — other revenue | 78 | 69 | 105 | ||||||||
Other: | |||||||||||
Other operations | 1,186 | 468 | 310 | ||||||||
Net operating revenues before provision for doubtful accounts | $ | 12,074 | $ | 9,904 | $ | 9,371 |
EQUITY_Tables
EQUITY (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
EQUITY | ' | |||||||||||
Schedule Of Repurchase Of Common Stock | ' | |||||||||||
Period | Total Number of | Average Price | Total Number of | Maximum Dollar Value | ||||||||
Shares | Paid Per | Shares Purchased as | of Shares That May Yet | |||||||||
Purchased | Share | Part of Publicly | Be Purchased Under the | |||||||||
Announced Program | Program | |||||||||||
(In Thousands) | (In Thousands) | (In Millions) | ||||||||||
November 1, 2012 through December 31, 2012 | 3,406 | $ | 29.36 | 3,406 | $ | 400 | ||||||
January 1, 2013 through | 531 | 37.13 | 531 | 380 | ||||||||
January 31, 2013 | ||||||||||||
February 1, 2013 through | 914 | 39.3 | 914 | 344 | ||||||||
February 28, 2013 | ||||||||||||
March 1, 2013 through | 1,010 | 43.95 | 1,010 | 300 | ||||||||
March 31, 2013 | ||||||||||||
Three Months Ended March 31, 2013 | 2,455 | 40.74 | 2,455 | 300 | ||||||||
May 1, 2013 through | 933 | 46.78 | 933 | 256 | ||||||||
May 31, 2013 | ||||||||||||
June 1, 2013 through | 1,065 | 45.71 | 1,065 | 208 | ||||||||
June 30, 2013 | ||||||||||||
Three Months Ended June 30, 2013 | 1,998 | 46.21 | 1,998 | 208 | ||||||||
July 1, 2013 through | 166 | 46.08 | 166 | 200 | ||||||||
July 31, 2013 | ||||||||||||
August 1, 2013 through | 1,045 | 40.43 | 1,045 | 158 | ||||||||
August 31, 2013 | ||||||||||||
September 1, 2013 through | 1,431 | 40.35 | 1,431 | 100 | ||||||||
September 30, 2013 | ||||||||||||
Three Months Ended September 30, 2013 | 2,642 | 40.75 | 2,642 | 100 | ||||||||
November 1, 2103 through | 796 | 42.28 | 796 | 66 | ||||||||
November 30, 2013 | ||||||||||||
December 1, 2013 through | 1,594 | 41.62 | 1,594 | 0 | ||||||||
December 31, 2013 | ||||||||||||
Three Months Ended December 31, 2013 | 2,390 | 41.84 | 2,390 | 0 | ||||||||
Total | 12,891 | $ | 38.79 | 12,891 | $ | 0 | ||||||
Schedule of changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | |||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Balances at beginning of period | $ | 16 | $ | 16 | ||||||||
Net income | 9 | 0 | ||||||||||
Distributions paid to noncontrolling interests | (5 | ) | 0 | |||||||||
Sales of joint venture interests | 52 | 0 | ||||||||||
Purchases of businesses | 175 | 0 | ||||||||||
Balances at end of period | $ | 247 | $ | 16 |
ACCOUNTS_RECEIVABLE_AND_ALLOWA1
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ' | |||||||
Schedule Of Components Of Accounts Receivable | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Continuing operations: | ||||||||
Patient accounts receivable | $ | 2,537 | $ | 1,668 | ||||
Allowance for doubtful accounts | (589 | ) | (396 | ) | ||||
Estimated future recoveries from accounts assigned to our Conifer subsidiary | 91 | 88 | ||||||
Net cost report settlements payable and valuation allowances | (4 | ) | (24 | ) | ||||
2,035 | 1,336 | |||||||
Discontinued operations: | ||||||||
Patient accounts receivable | 1 | 11 | ||||||
Allowance for doubtful accounts | 0 | (5 | ) | |||||
Estimated future recoveries from accounts assigned to our Conifer subsidiary | 0 | 2 | ||||||
Net cost report settlements receivable and valuation allowances | 2 | 1 | ||||||
3 | 9 | |||||||
Accounts receivable, net | $ | 2,038 | $ | 1,345 |
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
DISCONTINUED OPERATIONS | ' | ||||||||||
Schedule of net operating revenues and loss before income taxes | ' | ||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net operating revenues | $ | 7 | $ | 154 | $ | 216 | |||||
Loss before income taxes | (7 | ) | (101 | ) | (41 | ) | |||||
LONGTERM_DEBT_AND_LEASE_OBLIGA1
LONG-TERM DEBT AND LEASE OBLIGATIONS (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ||||||||||||||||||||||
Summary of long-term debt | ' | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Senior notes: | |||||||||||||||||||||||
73/8%, due 2013 | $ | 0 | $ | 55 | |||||||||||||||||||
97/8%, due 2014 | 60 | 60 | |||||||||||||||||||||
91/4%, due 2015 | 474 | 474 | |||||||||||||||||||||
63/4%, due 2020 | 300 | 300 | |||||||||||||||||||||
8%, due 2020 | 750 | 750 | |||||||||||||||||||||
81/8%, due 2022 | 2,800 | 0 | |||||||||||||||||||||
67/8%, due 2031 | 430 | 430 | |||||||||||||||||||||
Senior secured notes: | |||||||||||||||||||||||
61/4%, due 2018 | 1,041 | 1,041 | |||||||||||||||||||||
10%, due 2018 | 0 | 714 | |||||||||||||||||||||
87/8%, due 2019 | 0 | 925 | |||||||||||||||||||||
43/4%, due 2020 | 500 | 500 | |||||||||||||||||||||
6%, due 2020 | 1,800 | 0 | |||||||||||||||||||||
41/2%, due 2021 | 850 | 0 | |||||||||||||||||||||
43/8%, due 2021 | 1,050 | 0 | |||||||||||||||||||||
Credit facility due 2016 | 405 | 0 | |||||||||||||||||||||
Capital leases and mortgage notes | 407 | 119 | |||||||||||||||||||||
Unamortized note discounts and premium | (28 | ) | (116 | ) | |||||||||||||||||||
Total long-term debt | 10,839 | 5,252 | |||||||||||||||||||||
Less current portion | 149 | 94 | |||||||||||||||||||||
Long-term debt, net of current portion | $ | 10,690 | $ | 5,158 | |||||||||||||||||||
Schedule of future long-term debt maturities and minimum operating lease payments | ' | ||||||||||||||||||||||
Years Ending December 31, | Later | ||||||||||||||||||||||
Total | 2014 | 2015 | 2016 | 2017 | 2018 | Years | |||||||||||||||||
Long-term debt, including capital lease obligations | $ | 10,867 | $ | 149 | $ | 539 | $ | 430 | $ | 49 | $ | 1,047 | $ | 8,653 | |||||||||
Long-term non-cancelable operating leases | $ | 663 | $ | 137 | $ | 117 | $ | 102 | $ | 80 | $ | 56 | $ | 171 |
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | ||||||||||||||||||||||
Schedule of information related to stock-based awards by grant date | ' | ||||||||||||||||||||||
Grant Date | Awards | Exercise Price | Fair Value | Stock-Based | |||||||||||||||||||
Per Share | Per Share at | Compensation Expense | |||||||||||||||||||||
Grant Date | for Year Ended | ||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
(In Thousands) | (In Millions) | ||||||||||||||||||||||
Stock Options: | |||||||||||||||||||||||
February 28, 2013 | 266 | $ | 39.31 | $ | 14.46 | $ | 1 | ||||||||||||||||
February 29, 2012 | 355 | $ | 22.6 | 11.96 | 2 | ||||||||||||||||||
Restricted Stock Units: | |||||||||||||||||||||||
October 31, 2013 | 178 | 47.19 | 1 | ||||||||||||||||||||
June 13, 2013 | 318 | 47.13 | 1 | ||||||||||||||||||||
May 6, 2013 | 30 | 47 | -1 | 1 | |||||||||||||||||||
February 28, 2013 | 841 | 39.31 | 7 | ||||||||||||||||||||
February 29, 2012 | 987 | 22.6 | 6 | ||||||||||||||||||||
January 31, 2012 | 64 | 21.16 | 2 | ||||||||||||||||||||
November 4, 2011 | 60 | 19.44 | -1 | 1 | |||||||||||||||||||
February 23, 2011 | 890 | 27.6 | 9 | ||||||||||||||||||||
Other grants | 6 | ||||||||||||||||||||||
$ | 37 | ||||||||||||||||||||||
(1) End of month fair market value was used for this grant to calculate compensation expense. | |||||||||||||||||||||||
Summary of stock option activity | ' | ||||||||||||||||||||||
Options | Weighted | Aggregate | Weighted | ||||||||||||||||||||
Average | Intrinsic | Average | |||||||||||||||||||||
Exercise | Value | Remaining | |||||||||||||||||||||
Price Per | Life | ||||||||||||||||||||||
Share | |||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||
Outstanding as of December 31, 2010 | 10,788,887 | 39.88 | |||||||||||||||||||||
Granted | 0 | ||||||||||||||||||||||
Exercised | (629,021 | ) | 5.24 | ||||||||||||||||||||
Forfeited/Expired | (1,661,473 | ) | 128.92 | ||||||||||||||||||||
Outstanding as of December 31, 2011 | 8,498,393 | 25.04 | |||||||||||||||||||||
Granted | 477,500 | 22.79 | |||||||||||||||||||||
Exercised | (3,657,127 | ) | 5.77 | ||||||||||||||||||||
Forfeited/Expired | (1,029,574 | ) | 69.72 | ||||||||||||||||||||
Outstanding as of December 31, 2012 | 4,289,192 | 30.49 | |||||||||||||||||||||
Granted | 295,639 | 39.41 | |||||||||||||||||||||
Exercised | (946,086 | ) | 23.34 | ||||||||||||||||||||
Forfeited/Expired | (330,634 | ) | 55.79 | ||||||||||||||||||||
Outstanding as of December 31, 2013 | 3,308,111 | $ | 30.79 | $ | 41 | 3.3 years | |||||||||||||||||
Vested and expected to vest at December 31, 2013 | 3,294,282 | $ | 30.76 | $ | 41 | 3.3 years | |||||||||||||||||
Exercisable as of December 31, 2013 | 2,776,320 | $ | 30.66 | $ | 36 | 2.8 years | |||||||||||||||||
Schedule of assumptions used to determine fair value of stock options | ' | ||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Expected volatility | 50% | 52% | |||||||||||||||||||||
Expected dividend yield | 0% | 0% | |||||||||||||||||||||
Expected life | 3.6 years | 6.9 years | |||||||||||||||||||||
Expected forfeiture rate | 6% | 2% | |||||||||||||||||||||
Risk-free interest rate | 0.48% | 1.06%-1.41% | |||||||||||||||||||||
Early exercise threshold | 100% gain | 70% gain | |||||||||||||||||||||
Early exercise rate | 50% per year | 20% per year | |||||||||||||||||||||
Summary of information about stock options by range of exercise prices | ' | ||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||
Range of Exercise Prices | Number of | Weighted Average | Weighted Average | Number of | Weighted Average | ||||||||||||||||||
Options | Remaining | Exercise Price | Options | Exercise Price | |||||||||||||||||||
Contractual Life | |||||||||||||||||||||||
$0.00 to $4.569 | 324,542 | 5.1 years | $ | 4.56 | 324,542 | $ | 4.56 | ||||||||||||||||
$4.57 to $25.089 | 1,027,963 | 5.9 years | 20.83 | 774,623 | 20.17 | ||||||||||||||||||
$25.09 to $32.569 | 518,804 | 2.5 years | 29.64 | 518,804 | 29.64 | ||||||||||||||||||
$32.57 to $42.529 | 798,781 | 2.2 years | 41.17 | 520,330 | 42.17 | ||||||||||||||||||
$42.53 to $55.129 | 638,021 | 0.2 years | 48.11 | 638,021 | 48.11 | ||||||||||||||||||
3,308,111 | 3.3 years | $ | 30.79 | 2,776,320 | $ | 30.66 | |||||||||||||||||
Schedule of stock options by monetary status and employment status of the awardees | ' | ||||||||||||||||||||||
In-the-Money Options | Out-of-the-Money Options | All Options | |||||||||||||||||||||
Outstanding | % of Total | Outstanding | % of Total | Outstanding | % of Total | ||||||||||||||||||
Current employees | 2,177,530 | 85.3 | % | 433,841 | 57.4 | % | 2,611,371 | 78.9 | % | ||||||||||||||
Former employees | 375,227 | 14.7 | % | 321,513 | 42.6 | % | 696,740 | 21.1 | % | ||||||||||||||
Totals | 2,552,757 | 100 | % | 755,354 | 100 | % | 3,308,111 | 100 | % | ||||||||||||||
% of all outstanding options | 77.2 | % | 22.8 | % | 100 | % | |||||||||||||||||
Summary of restricted stock unit activity | ' | ||||||||||||||||||||||
Restricted Stock | Weighted Average | ||||||||||||||||||||||
Units | Grant Date Fair Value | ||||||||||||||||||||||
Per Unit | |||||||||||||||||||||||
Unvested as of December 31, 2010 | 1,580,318 | 20.56 | |||||||||||||||||||||
Granted | 1,138,350 | 27.04 | |||||||||||||||||||||
Vested | (722,471 | ) | 19.92 | ||||||||||||||||||||
Forfeited | (68,890 | ) | 23.72 | ||||||||||||||||||||
Unvested as of December 31, 2011 | 1,927,307 | 24.52 | |||||||||||||||||||||
Granted | 1,654,337 | 22.18 | |||||||||||||||||||||
Vested | (1,033,632 | ) | 23.51 | ||||||||||||||||||||
Forfeited | (252,070 | ) | 23.39 | ||||||||||||||||||||
Unvested as of December 31, 2012 | 2,295,942 | 23.4 | |||||||||||||||||||||
Granted | 1,564,224 | 41.2 | |||||||||||||||||||||
Vested | (966,838 | ) | 24.2 | ||||||||||||||||||||
Forfeited | (186,106 | ) | 29.69 | ||||||||||||||||||||
Unvested as of December 31, 2013 | 2,707,222 | $ | 33.34 | ||||||||||||||||||||
Schedule of employee stock purchase plan activity | ' | ||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||
Number of shares | 100,217 | 144,021 | 187,409 | ||||||||||||||||||||
Weighted average price | $ | 42.88 | $ | 22.81 | $ | 21.44 | |||||||||||||||||
Schedule of Reconciliation of funded status of plans, the amounts included in the Consolidated Balance Sheets and assumptions used for projected benefit obligations | ' | ||||||||||||||||||||||
December 31, | |||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Reconciliation of funded status of plans and the amounts included in the Consolidated Balance Sheets: | |||||||||||||||||||||||
Projected benefit obligations(1) | |||||||||||||||||||||||
Beginning obligations | $ | (312 | ) | $ | (285 | ) | |||||||||||||||||
Assumed from acquisition | (1,037 | ) | (0 | ) | |||||||||||||||||||
Service cost | (2 | ) | (2 | ) | |||||||||||||||||||
Interest cost | (25 | ) | (14 | ) | |||||||||||||||||||
Actuarial gain(loss) | 44 | (30 | ) | ||||||||||||||||||||
Plan changes | (2 | ) | (0 | ) | |||||||||||||||||||
Benefits paid/employer contributions | 31 | 19 | |||||||||||||||||||||
Ending obligations | (1,303 | ) | (312 | ) | |||||||||||||||||||
Fair value of plans assets | |||||||||||||||||||||||
Beginning obligations | (0 | ) | (0 | ) | |||||||||||||||||||
Assumed from acquisition | 863 | (0 | ) | ||||||||||||||||||||
Gain on plan assets | 34 | (0 | ) | ||||||||||||||||||||
Benefits paid | (11 | ) | (0 | ) | |||||||||||||||||||
Ending plan assets | 886 | (0 | ) | ||||||||||||||||||||
Funded status of plans | $ | (417 | ) | $ | (312 | ) | |||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets consist of: | |||||||||||||||||||||||
Other current liability | $ | (19 | ) | $ | (20 | ) | |||||||||||||||||
Other long-term liability | (398 | ) | (292 | ) | |||||||||||||||||||
Accumulated other comprehensive loss | 22 | 90 | |||||||||||||||||||||
$ | (395 | ) | $ | (222 | ) | ||||||||||||||||||
SERP Assumptions: | |||||||||||||||||||||||
Discount rate | 5 | % | 4 | % | |||||||||||||||||||
Compensation increase rate | 3 | % | 3 | % | |||||||||||||||||||
Measurement date | December 31, 2013 | December 31, 2012 | |||||||||||||||||||||
DMC Pension Plan Assumptions: | |||||||||||||||||||||||
Discount rate | 5.18 | % | n/a | ||||||||||||||||||||
Compensation increase rate | Frozen | n/a | |||||||||||||||||||||
Measurement date | December 31, 2013 | n/a | |||||||||||||||||||||
(1) The accumulated benefit obligation at December 31, 2013 and 2012 was approximately $1,297 million and $308 million, respectively. | |||||||||||||||||||||||
Schedule of components of net benefit costs and assumptions used for net periodic benefit costs | ' | ||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||
Service costs | $ | 2 | $ | 2 | $ | 2 | |||||||||||||||||
Interest costs | 25 | 14 | 14 | ||||||||||||||||||||
Amortization of prior-year service costs | (15 | ) | 0 | 0 | |||||||||||||||||||
Amortization of net actuarial loss | 7 | 5 | 3 | ||||||||||||||||||||
Net periodic benefit cost | $ | 19 | $ | 21 | $ | 19 | |||||||||||||||||
SERP Assumptions: | |||||||||||||||||||||||
Discount rate | 4 | % | 5 | % | 5.5 | % | |||||||||||||||||
Long-term rate of return on assets | n/a | n/a | n/a | ||||||||||||||||||||
Compensation increase rate | 3 | % | 3 | % | 3 | % | |||||||||||||||||
Measurement date | January 1, 2013 | January 1, 2012 | January 1, 2011 | ||||||||||||||||||||
Census date | January 1, 2013 | January 1, 2012 | January 1, 2011 | ||||||||||||||||||||
DMC Pension Plan Assumptions: | |||||||||||||||||||||||
Discount rate | 5.01 | % | n/a | n/a | |||||||||||||||||||
Long-term rate of return on assets | 7 | % | n/a | n/a | |||||||||||||||||||
Compensation increase rate | Frozen | n/a | n/a | ||||||||||||||||||||
Measurement date | October 1, 2013 | n/a | n/a | ||||||||||||||||||||
Census date | January 1, 2013 | n/a | n/a | ||||||||||||||||||||
Schedule of weighted-average asset allocations by asset category | ' | ||||||||||||||||||||||
Asset Category | Target | Actual | |||||||||||||||||||||
Cash and cash equivalents | 6 | % | 6 | % | |||||||||||||||||||
United States government obligations | 1 | % | 1 | % | |||||||||||||||||||
Equity securities | 45 | % | 51 | % | |||||||||||||||||||
Debt Securities | 48 | % | 42 | % | |||||||||||||||||||
Summary of DMC Pension Plan assets measured at fair value on a recurring basis aggregated by the level in the fair value hierarchy | ' | ||||||||||||||||||||||
December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
Cash and cash equivalents | $ | 53 | $ | 53 | $ | — | $ | — | |||||||||||||||
United States government obligations | 5 | 5 | — | — | |||||||||||||||||||
Corporate bonds | 376 | 376 | — | — | |||||||||||||||||||
Equity securities | 452 | 452 | — | — | |||||||||||||||||||
$ | 886 | $ | 886 | $ | — | $ | — | ||||||||||||||||
Schedule of estimated future benefits payments | ' | ||||||||||||||||||||||
Years Ending December 31, | Five Years | ||||||||||||||||||||||
Total | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | |||||||||||||||||
Estimated benefit payments | $ | 841 | $ | 88 | $ | 74 | $ | 76 | $ | 80 | $ | 82 | $ | 441 | |||||||||
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PROPERTY AND EQUIPMENT | ' | |||||||
Schedule of components of property and equipment | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Land | $ | 589 | $ | 341 | ||||
Buildings and improvements | 6,369 | 4,087 | ||||||
Construction in progress | 593 | 140 | ||||||
Equipment | 4,038 | 3,219 | ||||||
11,589 | 7,787 | |||||||
Accumulated depreciation and amortization | (3,898 | ) | (3,494 | ) | ||||
Net property and equipment | $ | 7,691 | $ | 4,293 |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | ' | ||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Hospital Operations and other | |||||||||||||||||||||||
As of January 1: | |||||||||||||||||||||||
Goodwill | $ | 3,268 | $ | 3,166 | |||||||||||||||||||
Accumulated impairment losses | (2,430 | ) | (2,430 | ) | |||||||||||||||||||
Total | 838 | 736 | |||||||||||||||||||||
Goodwill acquired during the year and purchase price allocation adjustments | 2,121 | 104 | |||||||||||||||||||||
Goodwill allocated to hospital sold | (0 | ) | (2 | ) | |||||||||||||||||||
Impairment of goodwill | 0 | 0 | |||||||||||||||||||||
Total | $ | 2,959 | $ | 838 | |||||||||||||||||||
As of December 31: | |||||||||||||||||||||||
Goodwill | $ | 5,389 | $ | 3,268 | |||||||||||||||||||
Accumulated impairment losses | (2,430 | ) | (2,430 | ) | |||||||||||||||||||
Total | $ | 2,959 | $ | 838 | |||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||
Conifer | |||||||||||||||||||||||
As of January 1: | |||||||||||||||||||||||
Goodwill | $ | 78 | $ | 0 | |||||||||||||||||||
Accumulated impairment losses | 0 | 0 | |||||||||||||||||||||
Total | 78 | 0 | |||||||||||||||||||||
Goodwill acquired during the year and purchase price allocation adjustments | 5 | 78 | |||||||||||||||||||||
Total | $ | 83 | $ | 78 | |||||||||||||||||||
As of December 31: | |||||||||||||||||||||||
Goodwill | $ | 83 | $ | 78 | |||||||||||||||||||
Accumulated impairment losses | 0 | 0 | |||||||||||||||||||||
Total | $ | 83 | $ | 78 | |||||||||||||||||||
Schedule of other intangible assets | ' | ||||||||||||||||||||||
Gross | Accumulated | Net Book | |||||||||||||||||||||
Carrying | Amortization | Value | |||||||||||||||||||||
Amount | |||||||||||||||||||||||
As of December 31, 2013: | |||||||||||||||||||||||
Capitalized software costs | $ | 1,260 | $ | (475 | ) | $ | 785 | ||||||||||||||||
Long-term debt issuance costs | 230 | (31 | ) | 199 | |||||||||||||||||||
Trade Names | 81 | 0 | 81 | ||||||||||||||||||||
Contracts | 64 | (2 | ) | 62 | |||||||||||||||||||
Other | 80 | (15 | ) | 65 | |||||||||||||||||||
Total | $ | 1,715 | $ | (523 | ) | $ | 1,192 | ||||||||||||||||
As of December 31, 2012: | |||||||||||||||||||||||
Capitalized software costs | $ | 927 | $ | (399 | ) | $ | 528 | ||||||||||||||||
Long-term debt issuance costs | 106 | (25 | ) | 81 | |||||||||||||||||||
Other | 43 | (2 | ) | 41 | |||||||||||||||||||
Total | $ | 1,076 | $ | (426 | ) | $ | 650 | ||||||||||||||||
Schedule of estimated future amortization of intangibles with finite useful lives | ' | ||||||||||||||||||||||
Years Ending December 31, | Later | ||||||||||||||||||||||
Total | 2014 | 2015 | 2016 | 2017 | 2018 | Years | |||||||||||||||||
Amortization of intangible assets | $ | 1,102 | $ | 224 | $ | 206 | $ | 126 | $ | 82 | $ | 77 | $ | 387 | |||||||||
INVESTMENTS_AND_OTHER_ASSETS_T
INVESTMENTS AND OTHER ASSETS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INVESTMENTS AND OTHER ASSETS | ' | |||||||
Schedule of investments and other assets | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Marketable debt securities | $ | 62 | $ | 15 | ||||
Equity investments in unconsolidated health care entities(1) | 56 | 22 | ||||||
Total investments | 118 | 37 | ||||||
Cash surrender value of life insurance policies | 25 | 21 | ||||||
Long-term deposits | 35 | 16 | ||||||
Land held for expansion, long-term receivables and other assets | 227 | 88 | ||||||
Investments and other assets | $ | 405 | $ | 162 | ||||
(1) Equity earnings of unconsolidated affiliates are included in net operating revenues in the accompanying Consolidated Statements of Operations and were $15 million and $8 million in of the years ended December 31, 2013 and 2012, respectively. |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | |||||||
Schedule of accumulated other comprehensive loss | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Unamortized realized losses from interest rate lock derivatives | $ | — | $ | (1 | ) | |||
Adjustments for defined benefit plans | (24 | ) | (67 | ) | ||||
Accumulated other comprehensive loss | $ | (24 | ) | $ | (68 | ) |
CLAIMS_AND_LAWSUITS_Tables
CLAIMS AND LAWSUITS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
CLAIMS AND LAWSUITS | ' | ||||||||||||||||
Reconciliations Of Legal Settlements And Related Costs | ' | ||||||||||||||||
Balances at | Litigation and | Cash | Other | Balances at | |||||||||||||
Beginning | Investigation | Payments | End of | ||||||||||||||
of Period | Costs | Period | |||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Continuing operations | $ | 5 | $ | 31 | $ | (10 | ) | $ | 14 | $ | 40 | ||||||
Discontinued operations | 5 | 2 | (1 | ) | 0 | 6 | |||||||||||
$ | 10 | $ | 33 | $ | (11 | ) | $ | 14 | $ | 46 | |||||||
Year Ended December 31, 2012 | |||||||||||||||||
Continuing operations | $ | 49 | $ | 5 | $ | (49 | ) | $ | 0 | $ | 5 | ||||||
Discontinued operations | 17 | 0 | (12 | ) | 0 | 5 | |||||||||||
$ | 66 | $ | 5 | $ | (61 | ) | $ | 0 | $ | 10 | |||||||
Year Ended December 31, 2011 | |||||||||||||||||
Continuing operations | $ | 30 | $ | 55 | $ | (36 | ) | $ | 0 | $ | 49 | ||||||
Discontinued operations | 0 | 17 | 0 | 0 | 17 | ||||||||||||
$ | 30 | $ | 72 | $ | (36 | ) | $ | 0 | $ | 66 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
INCOME TAXES | ' | |||||||||||||
Schedule of provision for income taxes for continuing operations | ' | |||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Current tax expense (benefit): | ||||||||||||||
Federal | $ | 2 | $ | (3 | ) | $ | 0 | |||||||
State | 4 | 11 | (6 | ) | ||||||||||
6 | 8 | (6 | ) | |||||||||||
Deferred tax expense (benefit): | ||||||||||||||
Federal | (56 | ) | 117 | 62 | ||||||||||
State | (15 | ) | 0 | 5 | ||||||||||
(71 | ) | 117 | 67 | |||||||||||
$ | (65 | ) | $ | 125 | $ | 61 | ||||||||
Schedule of reconciliation between reported income tax expense (benefit) and income taxes calculated by the statutory federal income tax rate | ' | |||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Tax expense at statutory federal rate of 35% | $ | (55 | ) | $ | 117 | $ | 57 | |||||||
State income taxes, net of federal income tax benefit | 1 | 13 | 10 | |||||||||||
Tax attributable to noncontrolling interests | (10 | ) | (4 | ) | (4 | ) | ||||||||
Nondeductible transaction costs | 6 | 0 | 0 | |||||||||||
Other changes in valuation allowance | (2 | ) | (5 | ) | (2 | ) | ||||||||
Change in tax contingency reserves, including interest | (7 | ) | (1 | ) | (12 | ) | ||||||||
Prior-year provision to return adjustment and other changes in deferred taxes, net of valuation allowance | 3 | 3 | 7 | |||||||||||
Other items | (1 | ) | 2 | 5 | ||||||||||
$ | (65 | ) | $ | 125 | $ | 61 | ||||||||
Schedule of components of deferred tax assets and liabilities, including any valuation allowance | ' | |||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||
Depreciation and fixed-asset differences | $ | 0 | $ | 678 | $ | 0 | $ | 375 | ||||||
Reserves related to discontinued operations and restructuring charges | 20 | 0 | 5 | 0 | ||||||||||
Receivables (doubtful accounts and adjustments) | 209 | 0 | 173 | 0 | ||||||||||
Deferred gain on debt exchanges | 0 | 53 | 0 | 53 | ||||||||||
Accruals for retained insurance risks | 288 | 0 | 182 | 0 | ||||||||||
Intangible assets | 0 | 163 | 0 | 122 | ||||||||||
Other long-term liabilities | 76 | 0 | 55 | 0 | ||||||||||
Benefit plans | 299 | 0 | 214 | 0 | ||||||||||
Other accrued liabilities | 60 | 0 | 11 | 0 | ||||||||||
Investments and other assets | 0 | 45 | 6 | 0 | ||||||||||
Net operating loss carryforwards | 708 | 0 | 588 | 0 | ||||||||||
Stock-based compensation | 28 | 0 | 32 | 0 | ||||||||||
Other items | 29 | 0 | 36 | 0 | ||||||||||
1,717 | 939 | 1,302 | 550 | |||||||||||
Valuation allowance | (107 | ) | 0 | (56 | ) | 0 | ||||||||
$ | 1,610 | $ | 939 | $ | 1,246 | $ | 550 | |||||||
Reconciliation of the deferred tax assets and liabilities and the corresponding amounts reported in the accompanying Consolidated Balance Sheets | ' | |||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Current portion of deferred income tax asset | $ | 581 | $ | 354 | ||||||||||
Deferred income tax asset, net of current portion | 90 | 342 | ||||||||||||
Noncurrent deferred income tax liability | 0 | 0 | ||||||||||||
Net deferred tax asset | $ | 671 | $ | 696 | ||||||||||
Schedule of changes in unrecognized tax benefits that have impacted deferred tax assets and liabilities | ' | |||||||||||||
Continuing | Discontinued | Total | ||||||||||||
Operations | Operations | |||||||||||||
Balance at December 31, 2010 | 34 | 1 | 35 | |||||||||||
Additions for prior-year tax positions | 15 | 0 | 15 | |||||||||||
Reductions for tax positions of prior years | (2 | ) | 0 | (2 | ) | |||||||||
Additions for current-year tax positions | 3 | 0 | 3 | |||||||||||
Reductions for current-year tax positions | 0 | 0 | 0 | |||||||||||
Reductions due to settlements with taxing authorities | (12 | ) | 0 | (12 | ) | |||||||||
Reductions due to a lapse of statute of limitations | (4 | ) | 0 | (4 | ) | |||||||||
Balance at December 31, 2011 | 34 | 1 | 35 | |||||||||||
Additions for prior-year tax positions | 0 | 0 | 0 | |||||||||||
Reductions for tax positions of prior years | (2 | ) | 0 | (2 | ) | |||||||||
Additions for current-year tax positions | 2 | 0 | 2 | |||||||||||
Reductions for current-year tax positions | 0 | 0 | 0 | |||||||||||
Reductions due to settlements with taxing authorities | (3 | ) | 0 | (3 | ) | |||||||||
Reductions due to a lapse of statute of limitations | (0 | ) | 0 | (0 | ) | |||||||||
Balance at December 31, 2012 | 31 | 1 | 32 | |||||||||||
Additions for prior-year tax positions | 15 | 0 | 15 | |||||||||||
Reductions for tax positions of prior years | (0 | ) | 0 | (0 | ) | |||||||||
Additions for current-year tax positions | 3 | 0 | 3 | |||||||||||
Reductions for current-year tax positions | 0 | 0 | 0 | |||||||||||
Reductions due to settlements with taxing authorities | (0 | ) | 0 | (0 | ) | |||||||||
Reductions due to a lapse of statute of limitations | (6 | ) | (1 | ) | (7 | ) | ||||||||
Balance at December 31, 2013 | $ | 43 | $ | 0 | $ | 43 | ||||||||
EARNINGS_LOSS_PER_COMMON_SHARE1
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
EARNINGS (LOSS) PER COMMON SHARE | ' | |||||||||
Schedule of reconciliation of numerators and denominators of our basic and diluted earnings (loss) per common share | ' | |||||||||
Income (loss) is expressed in millions and weighted average shares are expressed in thousands. | ||||||||||
Income | Weighted | Per-Share | ||||||||
(Numerator) | Average | Amount | ||||||||
Shares | ||||||||||
(Denominator) | ||||||||||
Year Ended December 31, 2013 | ||||||||||
Loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | (123 | ) | 101,648 | $ | (1.21 | ) | |||
Effect of dilutive stock options and restricted stock units | 0 | 0 | 0 | |||||||
Loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | (123 | ) | 101,648 | $ | (1.21 | ) | |||
Year Ended December 31, 2012 | ||||||||||
Income available to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | 185 | 104,200 | $ | 1.77 | |||||
Effect of dilutive stock options and restricted stock units | 0 | 4,726 | (0.07 | ) | ||||||
Income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | 185 | 108,926 | $ | 1.7 | |||||
Year Ended December 31, 2011 | ||||||||||
Income available to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | 68 | 117,182 | $ | 0.58 | |||||
Effect of dilutive stock options and restricted stock units | 0 | 4,113 | (0.02 | ) | ||||||
Income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | 68 | 121,295 | $ | 0.56 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | |||||||||||||
December 31, 2013 | Quoted Prices | Significant Other | Significant | |||||||||||
in Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Investments: | ||||||||||||||
Marketable securities – current | $ | 1 | $ | 1 | $ | 0 | $ | 0 | ||||||
Investments in Reserve Yield Plus Fund | 2 | 0 | 2 | 0 | ||||||||||
Marketable debt securities – noncurrent | 62 | 23 | 38 | 1 | ||||||||||
$ | 65 | $ | 24 | $ | 40 | $ | 1 | |||||||
December 31, 2012 | Quoted Prices | Significant Other | Significant | |||||||||||
in Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Investments: | ||||||||||||||
Marketable securities – current | $ | 4 | $ | 4 | $ | 0 | $ | 0 | ||||||
Investments in Reserve Yield Plus Fund | 2 | 0 | 2 | 0 | ||||||||||
Marketable debt securities – noncurrent | 14 | 2 | 11 | 1 | ||||||||||
$ | 20 | $ | 6 | $ | 13 | $ | 1 | |||||||
Schedule of assets and liabilities measured at fair value on a non-recurring basis | ' | |||||||||||||
December 31, 2013 | Quoted Prices | Significant Other | Significant | |||||||||||
in Active | Observable Inputs | Unobservable | ||||||||||||
Markets for | (Level 2) | Inputs | ||||||||||||
Identical Assets | (Level 3) | |||||||||||||
(Level 1) | ||||||||||||||
Long-lived assets held and used | $ | 44 | $ | — | $ | 44 | $ | — | ||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Business Acquisition | ' | |||||||
Schedule of pro forma financial information as if the Vanguard Health Systems acquisition had occurred at the beginning of the year | ' | |||||||
Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Net operating revenues | $ | 15,650 | $ | 15,140 | ||||
Income (loss) from continuing operations , before income taxes | $ | (294 | ) | $ | 294 | |||
Series of individual business acquisition | ' | |||||||
Business Acquisition | ' | |||||||
Schedule of preliminary purchase price allocation | ' | |||||||
2013 | 2012 | |||||||
Current assets | $ | 1,058 | $ | 19 | ||||
Property and equipment | 3,134 | 24 | ||||||
Other intangible assets | 166 | 53 | ||||||
Goodwill | 2,121 | 182 | ||||||
Investments and other assets | 83 | 0 | ||||||
Other long-term assets | 126 | 0 | ||||||
Current liabilities | (1,024 | ) | (23 | ) | ||||
Deferred tax liabilities | (174 | ) | 0 | |||||
Long-term liabilities | (3,741 | ) | (7 | ) | ||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | (175 | ) | 0 | |||||
Noncontrolling interests | (49 | ) | (37 | ) | ||||
Net cash paid | $ | 1,515 | $ | 211 | ||||
Gain on business combination | $ | 10 | $ | 0 | ||||
Vanguard | ' | |||||||
Business Acquisition | ' | |||||||
Schedule of preliminary purchase price allocation | ' | |||||||
Current assets | $ | 1,054 | ||||||
Investments and other assets | 82 | |||||||
Property and equipment | 3,074 | |||||||
Other long term assets | 118 | |||||||
Other intangible assets | 108 | |||||||
Goodwill | 1,936 | |||||||
Current liabilities | (1,012 | ) | ||||||
Deferred taxes long term | (161 | ) | ||||||
Long-term liabilities | (3,726 | ) | ||||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | (165 | ) | ||||||
Noncontrolling interests | (7 | ) | ||||||
Net cash paid | $ | 1,301 |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SEGMENT INFORMATION | ' | ||||||||||
Schedule of reconciliation of amounts for each reportable segments, Hospital Operations and other segment includes health plans, and the reconciling items | ' | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Assets: | |||||||||||
Hospital Operations and other | $ | 15,874 | $ | 8,825 | $ | 8,389 | |||||
Conifer | 256 | 219 | 73 | ||||||||
Total | $ | 16,130 | $ | 9,044 | $ | 8,462 | |||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Capital expenditures: | |||||||||||
Hospital Operations and other Core Services | $ | 670 | $ | 495 | $ | 461 | |||||
Conifer | 21 | 13 | 14 | ||||||||
Total | $ | 691 | $ | 508 | $ | 475 | |||||
Net operating revenues: | |||||||||||
Hospital Operations and other | $ | 10,587 | $ | 9,002 | $ | 8,575 | |||||
Conifer | |||||||||||
Tenet | 404 | 371 | 261 | ||||||||
Other customers | 515 | 117 | 79 | ||||||||
11,506 | 9,490 | 8,915 | |||||||||
Intercompany eliminations | (404 | ) | (371 | ) | (261 | ) | |||||
Total | $ | 11,102 | $ | 9,119 | $ | 8,654 | |||||
Adjusted EBITDA: | |||||||||||
Hospital Operations and other Core Services | $ | 1,210 | $ | 1,098 | $ | 1,083 | |||||
Conifer | 132 | 105 | 43 | ||||||||
Total | $ | 1,342 | $ | 1,203 | $ | 1,126 | |||||
Depreciation and amortization: | |||||||||||
Hospital Operations and other Core Services | $ | 526 | $ | 420 | $ | 389 | |||||
Conifer | 19 | 10 | 9 | ||||||||
Total | $ | 545 | $ | 430 | $ | 398 | |||||
Adjusted EBITDA | $ | 1,342 | $ | 1,203 | $ | 1,126 | |||||
Depreciation and amortization | (545 | ) | (430 | ) | (398 | ) | |||||
Impairment and restructuring charges, and acquisition-related costs | (103 | ) | (19 | ) | (20 | ) | |||||
Litigation and investigation costs | (31 | ) | (5 | ) | (55 | ) | |||||
Interest expense | (474 | ) | (412 | ) | (375 | ) | |||||
Loss from early extinguishment of debt | (348 | ) | (4 | ) | (117 | ) | |||||
Investment earnings | 1 | 1 | 3 | ||||||||
Income (loss) before income taxes | $ | (158 | ) | $ | 334 | $ | 164 |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended |
Oct. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
item | item | item | |
Description of Business | ' | ' | ' |
Number of acute care hospitals operated by subsidiaries | ' | ' | 77 |
Number of licensed beds in hospitals operated by subsidiaries | ' | ' | 20,293 |
Number of provider-based outpatient centers operated by subsidiaries | ' | ' | 183 |
Number of health plans | ' | ' | 6 |
Number of accountable care networks | ' | ' | 6 |
Minimum number of hospitals to which business process solutions is provided by Conifer | ' | ' | 700 |
Vanguard | ' | ' | ' |
Summary of significant accounting policies | ' | ' | ' |
Business acquisition share price (in dollars per share) | $21 | ' | ' |
Number of hospitals | 28 | 28 | 28 |
Number of hospitals under construction | 1 | 1 | 1 |
Number of outpatient centers | 39 | 39 | 39 |
Number of health plans | 5 | 5 | 5 |
Number of members covered under the health plans | 140,000 | ' | ' |
Cash paid | $4,300,000,000 | ' | ' |
Assumed debt | $2,500,000,000 | ' | ' |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Medicare and Medicaid net patient revenue | ' | ' | ' | ' |
Cost report filing period after end of annual cost reporting period | '5 months | ' | ' | ' |
Increase in revenue due to adjustments for prior-year cost reports and related valuation allowances | $38 | $114 | $1 | ' |
Increase in revenue due to adjustments for prior-year cost reports and related valuation allowances related to the industry-wide Medicare Budget Neutrality Settlement | ' | 81 | ' | ' |
Summary of significant accounting policies | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 12,074 | 9,904 | 9,371 | ' |
Electronic Health Record Incentives | ' | ' | ' | ' |
Period for use of EHR technology to become eligible for annual Medicare incentive payments | '4 years | ' | ' | ' |
Percentage of Medicaid incentive payments federally funded | 100.00% | ' | ' | ' |
Medicare and Medicaid incentive payments for technology certification | 96 | 40 | 55 | ' |
Cash Equivalents | ' | ' | ' | ' |
Cash and cash equivalents | 113 | 364 | 113 | 405 |
Book overdrafts classified as accounts payable | 245 | 232 | ' | ' |
Cash and cash equivalents related to captive insurance subsidiaries | 62 | 65 | ' | ' |
Accrued property and equipment purchases for items received but not yet paid | 193 | 98 | ' | ' |
Accrued property and equipment purchases for items received but not yet paid, included in accounts payable and other accrued expenses | 138 | 93 | ' | ' |
Non-cancellable capital leases primarily for buildings and equipment | 341 | 88 | ' | ' |
Medicare | ' | ' | ' | ' |
Summary of significant accounting policies | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 2,357 | 2,195 | 2,068 | ' |
Medicaid | ' | ' | ' | ' |
Summary of significant accounting policies | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 975 | 783 | 802 | ' |
Managed care | ' | ' | ' | ' |
Summary of significant accounting policies | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 6,277 | 5,382 | 5,128 | ' |
Indemnity, self-pay and other | ' | ' | ' | ' |
Summary of significant accounting policies | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 1,201 | 1,007 | 958 | ' |
Acute care hospitals - other revenue | ' | ' | ' | ' |
Summary of significant accounting policies | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 78 | 69 | 105 | ' |
Other operations | ' | ' | ' | ' |
Summary of significant accounting policies | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | $1,186 | $468 | $310 | ' |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property and Equipment | ' | ' | ' |
Minimum useful life of additions and improvements to property and equipment | '1 year | ' | ' |
Property and equipment | ' | ' | ' |
Interest costs capitalized related to construction projects | $14 | $6 | $8 |
Buildings and improvements | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Useful life | '15 years | ' | ' |
Buildings and improvements | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Useful life | '40 years | ' | ' |
Equipment | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Useful life | '3 years | ' | ' |
Equipment | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Useful life | '15 years | ' | ' |
Newly constructed hospitals | ' | ' | ' |
Property and equipment | ' | ' | ' |
Useful life | '50 years | ' | ' |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Details 4) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
segment | |||
Accruals for General and Professional Liability Risks | ' | ' | ' |
Risk-free discount rate (as a percent) | 2.45% | 1.18% | ' |
Segment reporting | ' | ' | ' |
Percentage of net operating revenues generated by general hospitals | 90.20% | 95.30% | 96.70% |
Number of reportable segments | 1 | ' | ' |
Capitalized software costs | Minimum | ' | ' | ' |
Goodwill and Other Intangible Assets | ' | ' | ' |
Estimated useful life | '3 years | ' | ' |
Capitalized software costs | Maximum | ' | ' | ' |
Goodwill and Other Intangible Assets | ' | ' | ' |
Estimated useful life | '15 years | ' | ' |
EQUITY_Details
EQUITY (Details) (USD $) | 0 Months Ended | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | 14 Months Ended | |||||||||||||||
In Millions, except Share data, unless otherwise specified | Oct. 11, 2012 | Dec. 31, 2013 | Nov. 30, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | Jul. 31, 2013 | Jun. 30, 2013 | 31-May-13 | Mar. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 |
Class of Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split approved | 0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, authorized shares before reverse stock split | ' | 1,050,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,050,000,000 | ' | ' | ' | 1,050,000,000 | ' | ' | 1,050,000,000 |
Common stock, authorized shares | ' | 262,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 262,500,000 | 262,500,000 | ' | ' | ' | 262,500,000 | 262,500,000 | ' | 262,500,000 |
Number of fractional shares issued in connection with the stock split | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of common stock authorized to be repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid for repurchase | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400 | 126 | 374 | 500 |
Common stock repurchased (in shares) | ' | 1,594,000 | 796,000 | 1,431,000 | 1,045,000 | 166,000 | 1,065,000 | 933,000 | 1,010,000 | 914,000 | 531,000 | ' | 3,406,000 | 2,390,000 | 2,642,000 | 1,998,000 | 2,455,000 | ' | ' | ' | 12,891,000 |
Average Price Paid Per Share | ' | $41.62 | $42.28 | $40.35 | $40.43 | $46.08 | $45.71 | $46.78 | $43.95 | $39.30 | $37.13 | ' | $29.36 | $41.84 | $40.75 | $46.21 | $40.74 | ' | ' | ' | $38.79 |
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Program | ' | $0 | $66 | $100 | $158 | $200 | $208 | $256 | $300 | $344 | $380 | ' | $400 | $0 | $100 | $208 | $300 | ' | ' | ' | $0 |
Publicly Announced Program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock repurchased (in shares) | ' | 1,594,000 | 796,000 | 1,431,000 | 1,045,000 | 166,000 | 1,065,000 | 933,000 | 1,010,000 | 914,000 | 531,000 | ' | 3,406,000 | 2,390,000 | 2,642,000 | 1,998,000 | 2,455,000 | ' | ' | ' | 12,891,000 |
EQUITY_Details_2
EQUITY (Details 2) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | |||||||||||||
In Millions, except Share data, unless otherwise specified | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 02, 2012 | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Oct. 31, 2012 | Jul. 31, 2012 | Apr. 30, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Oct. 02, 2012 |
6.25%, due 2018 | 6.25%, due 2018 | 6.25%, due 2018 | 8%, due 2020 | 8%, due 2020 | 8%, due 2020 | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | Convertible Preferred Stock | ||||||
Class of Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock 7% mandatory convertible shares retired | 298,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, percent of mandatory convertible shares | 7.00% | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchases of preferred stock | $289 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of notes issued | ' | ' | ' | ' | ' | 141 | ' | ' | ' | ' | 150 | ' | ' | ' | ' | ' | ' | ' |
Cash proceeds | ' | ' | ' | ' | ' | 142 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate, stated percentage | ' | ' | ' | ' | ' | 6.25% | 6.25% | 6.25% | 8.00% | 8.00% | 8.00% | ' | ' | ' | ' | ' | ' | ' |
Number of common stock received after mandatory convertible preferred stock | ' | ' | ' | ' | 46,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,978,633 |
Preferred stock dividends accrued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | 6 | ' |
Preferred stock dividends paid | ' | $0 | $14 | $24 | ' | ' | ' | ' | ' | ' | ' | $1 | $1 | $6 | ' | ' | ' | ' |
Preferred stock dividends accrued (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $17.50 | ' |
EQUITY_Details_3
EQUITY (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' | ' |
Distributions paid to noncontrolling interests | ($22) | ($12) | ($10) |
Seller | ' | ' | ' |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' | ' |
Non-controlling interest granted (as a percent) | 49.00% | ' | ' |
Ownership percentage upon which put option may be exercised | 49.00% | ' | ' |
Seller | Minimum | ' | ' | ' |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' | ' |
Exercise period of put option | '3 years | ' | ' |
Seller | Maximum | ' | ' | ' |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' | ' |
Exercise period of put option | '5 years | ' | ' |
Valley Baptist Health System | ' | ' | ' |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' | ' |
Controlling interest acquired (as a percent) | 51.00% | ' | ' |
Redeemable noncontrolling interests | ' | ' | ' |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' | ' |
Balances at beginning of period | 16 | 16 | ' |
Net income | 9 | 0 | ' |
Distributions paid to noncontrolling interests | -5 | 0 | ' |
Sales of joint venture interests | 52 | 0 | ' |
Purchases of businesses | 175 | 0 | ' |
Balances at end of period | $247 | $16 | ' |
ACCOUNTS_RECEIVABLE_AND_ALLOWA2
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable | ' | ' |
Accounts receivable, net | $2,038 | $1,345 |
Continuing operations | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' |
Patient accounts receivable | 2,537 | 1,668 |
Allowance for doubtful accounts | -589 | -396 |
Estimated future recoveries from accounts assigned to our collection agency subsidiary | 91 | 88 |
Net cost report settlements payable (receivable) and valuation allowances | -4 | -24 |
Accounts receivable, net | 2,035 | 1,336 |
Discontinued operations | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' |
Patient accounts receivable | 1 | 11 |
Allowance for doubtful accounts | 0 | -5 |
Estimated future recoveries from accounts assigned to our collection agency subsidiary | 0 | 2 |
Net cost report settlements payable (receivable) and valuation allowances | 2 | 1 |
Accounts receivable, net | $3 | $9 |
ACCOUNTS_RECEIVABLE_AND_ALLOWA3
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' |
Allowance for doubtful accounts as a percent of patients accounts receivable | 23.20% | 23.70% | ' |
Revenues payments | $11,102 | $9,119 | $8,654 |
Self-Pay Patients | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' |
Allowance for doubtful accounts as a percent of patients accounts receivable | 75.90% | 73.80% | ' |
Estimated costs of caring | 545 | 430 | 379 |
Managed Care Patients | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' |
Allowance for doubtful accounts as a percent of patients accounts receivable | 5.60% | 9.40% | ' |
Charity Care Patients | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' |
Estimated costs of caring | 158 | 136 | 113 |
Disproportionate Share Hospital | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' |
Revenues payments | $428 | $283 | $255 |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details) (USD $) | 3 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
In Millions, unless otherwise specified | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Aug. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2012 | 31-May-12 | Jun. 30, 2012 | Dec. 31, 2011 |
item | Land | Creighton University Medical Center (CUMC) | Creighton University Medical Center (CUMC) | Creighton University Medical Center (CUMC) | Diagnostic Imaging Services, Inc. (DIS) | Diagnostic Imaging Services, Inc. (DIS) | Diagnostic Imaging Services, Inc. (DIS) | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment charge | ' | ' | ' | ' | ' | ' | ' | $100 | ' | ' | ' | ' |
Write-down of long-lived assets | ' | ' | ' | 1 | ' | ' | ' | 98 | ' | ' | ' | ' |
Write-down of goodwill | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | 6 |
Net proceeds from sale of discontinued operation | ' | 16 | 45 | 0 | ' | ' | 40 | ' | ' | 10 | ' | ' |
Gain (loss) on sale of discontinued operations | 2 | 0 | 1 | 0 | ' | 12 | -1 | ' | ' | ' | 2 | ' |
Net receivables | ' | 2,038 | 1,345 | ' | ' | ' | ' | ' | 9 | ' | ' | ' |
Net operating revenues and loss before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net operating revenues | ' | 7 | 154 | 216 | ' | ' | ' | ' | ' | ' | ' | ' |
Loss before income taxes | ' | -7 | -101 | -41 | ' | ' | ' | ' | ' | ' | ' | ' |
Expense related to the settlement of lawsuits | ' | ' | ' | 14 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of lawsuits | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' |
Expected recoveries from reinsurance carriers | ' | ' | ' | 10 | ' | ' | ' | ' | ' | ' | ' | ' |
Reserves for hurricane Katrina related lawsuits | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' |
Litigation and investigation costs | ' | ' | ' | $17 | ' | ' | ' | ' | ' | ' | ' | ' |
IMPAIRMENT_AND_RESTRUCTURING_C1
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
segment | item | Vanguard | Vanguard | Vanguard | ||
item | item | item | ||||
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | ' | ' | ' | ' | ' | ' |
Number of continuing operating segments | 2 | ' | ' | ' | ' | ' |
Acquisition | ' | ' | ' | ' | ' | ' |
Number of hospitals | ' | ' | ' | 28 | 28 | 28 |
Number of hospitals under construction | ' | ' | ' | 1 | 1 | 1 |
Number of outpatient centers | ' | ' | ' | 39 | 39 | 39 |
Number of health plans | ' | ' | ' | 5 | 5 | 5 |
Net impairment and restructuring charges and acquisition-related costs | $103 | $19 | $20 | ' | ' | ' |
Obsolete assets | 12 | 3 | 6 | ' | ' | ' |
Other impairment charges | ' | 2 | ' | ' | ' | ' |
Restructuring costs | 16 | ' | ' | ' | ' | ' |
Employee severance costs | 14 | 8 | 7 | ' | ' | ' |
Lease termination costs | 2 | ' | 3 | ' | ' | ' |
Acquisition costs | 59 | 6 | ' | ' | ' | ' |
Other related costs | ' | 6 | 1 | ' | ' | ' |
Aggregate carrying value of assets held and used for hospital | 44 | ' | 20 | ' | ' | ' |
Impairment charges in connection with sale of medical office buildings in Texas | ' | ' | 1 | ' | ' | ' |
Number of medical office buildings sold in Texas | ' | ' | 7 | ' | ' | ' |
Cost basis investment | ' | ' | 1 | ' | ' | ' |
Acceleration of stock-based compensation costs | $37 | ' | $1 | ' | ' | ' |
LONGTERM_DEBT_AND_LEASE_OBLIGA2
LONG-TERM DEBT AND LEASE OBLIGATIONS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2013 | Oct. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2013 | Oct. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Feb. 28, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | 31-May-13 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | 7 3/8%, due 2013 | 7 3/8%, due 2013 | 7 3/8%, due 2013 | 9 7/8%, due 2014 | 9 7/8%, due 2014 | 9 1/4%, due 2015 | 9 1/4%, due 2015 | 9 1/4%, due 2015 | 6 3/4%, due 2020 | 6 3/4%, due 2020 | 6 3/4%, due 2020 | 8%, due 2020 | 8%, due 2020 | 8%, due 2020 | 8 1/8%, due 2022 | 8 1/8%, due 2022 | 8 1/8%, due 2022 | 6 7/8%, due 2031 | 6 7/8%, due 2031 | 6 1/4%, due 2018 | 6 1/4%, due 2018 | 6 1/4%, due 2018 | 10%, due 2018 | 10%, due 2018 | 8 7/8%, due 2019 | 8 7/8%, due 2019 | 4 3/4%, due 2020 | 4 3/4%, due 2020 | 4 3/4%, due 2020 | 6%, due 2020 | 6%, due 2020 | 6%, due 2020 | 4 1/2%, due 2021 | 4 1/2%, due 2021 | 4 1/2%, due 2021 | 4 3/8%, due 2021 | 4 3/8%, due 2021 | 4 3/8%, due 2021 | Credit Facility due 2016 | Credit Facility due 2016 | ||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate, stated percentage | ' | ' | 7.38% | 7.38% | 7.38% | 9.88% | 9.88% | 9.25% | 9.25% | 9.25% | 6.75% | 6.75% | 6.75% | 8.00% | 8.00% | 8.00% | 8.13% | 8.13% | 8.13% | 6.88% | 6.88% | 6.25% | 6.25% | 6.25% | 10.00% | 10.00% | 8.88% | 8.88% | 4.75% | 4.75% | 4.75% | 6.00% | 6.00% | 6.00% | 4.50% | 4.50% | 4.50% | 4.38% | 4.38% | 4.38% | ' | ' |
Carrying amount | $10,867 | ' | $0 | $55 | ' | $60 | $60 | $474 | ' | $474 | $300 | $300 | ' | $750 | $750 | ' | $2,800 | ' | $0 | $430 | $430 | $1,041 | $1,041 | ' | $0 | $714 | $0 | $925 | $500 | $500 | ' | $1,800 | ' | $0 | $850 | ' | $0 | $1,050 | ' | $0 | $405 | $0 |
Capital leases and mortgage notes | 407 | 119 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized note discounts and premium | -28 | -116 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-term debt | 10,839 | 5,252 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less current portion | 149 | 94 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, net of current portion | $10,690 | $5,158 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
LONGTERM_DEBT_AND_LEASE_OBLIGA3
LONG-TERM DEBT AND LEASE OBLIGATIONS (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
9 1/4%, due 2015 | 9 1/4%, due 2015 | 9 1/4%, due 2015 | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | ||
Initial six months period | Period after six months | Period after six months | Base rate | Base rate | Base rate | Base rate | LIBOR | LIBOR | LIBOR | LIBOR | ||||||
Low end of range | High end of range | Initial six months period | Period after six months | Period after six months | Period after six months | Initial six months period | Period after six months | Period after six months | Period after six months | |||||||
Low end of range | High end of range | Low end of range | High end of range | |||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving credit facility, maximum borrowing capacity | ' | ' | ' | ' | $1,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, subfacility maximum available capacity | ' | ' | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding principal amount of notes that must be repaid or refinanced on or before November 3, 2014 to extend the maturity date of the credit facility | ' | 238,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate, stated percentage | ' | 9.25% | 9.25% | 9.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying amount | 10,867,000,000 | 474,000,000 | ' | 474,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Base rate used to calculate interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 'base rate | 'base rate | ' | ' | 'LIBOR | 'LIBOR | ' | ' |
Margin on variable rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | ' | 1.00% | 1.50% | 2.25% | ' | 2.00% | 2.50% |
Unused commitment fee (as a percent) | ' | ' | ' | ' | ' | 0.44% | 0.38% | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding cash borrowings | ' | ' | ' | ' | 405,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate on borrowings (as a percent) | ' | ' | ' | ' | 2.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Standby letters of credit outstanding | ' | ' | ' | ' | 189,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount available for borrowing under revolving credit facility | ' | ' | ' | ' | $406,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
LONGTERM_DEBT_AND_LEASE_OBLIGA4
LONG-TERM DEBT AND LEASE OBLIGATIONS (Details 3) (USD $) | 1 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | ||||||||||||||||||||||||||||||||
Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Oct. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Feb. 28, 2013 | Dec. 31, 2012 | Feb. 28, 2013 | Dec. 31, 2013 | 31-May-13 | Dec. 31, 2012 | 31-May-13 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | |
Senior Notes | Senior Notes | Senior Notes | Senior Secured Notes | Senior Secured Notes | Credit Agreement | 8 1/8%, due 2022 | 8 1/8%, due 2022 | 8 1/8%, due 2022 | 6%, due 2020 | 6%, due 2020 | 6%, due 2020 | 4 1/2% senior secured notes due 2021 | 4 1/2% senior secured notes due 2021 | 4 1/2% senior secured notes due 2021 | 10% senior notes due 2018 | 4 3/8%, due 2021 | 4 3/8%, due 2021 | 4 3/8%, due 2021 | 8 7/8% senior notes due 2019 | 4 3/4%, due 2020 | 4 3/4%, due 2020 | 4 3/4%, due 2020 | 6 3/4%, due 2020 | 6 3/4%, due 2020 | 6 3/4%, due 2020 | 7 3/8%, due 2013 | 7 3/8%, due 2013 | 7 3/8%, due 2013 | 6 1/4% due 2018 | 6 1/4% due 2018 | 6 1/4% due 2018 | 8%, due 2020 | 8%, due 2020 | 8%, due 2020 | |||||
Minimum | Maximum | Maximum | |||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of notes sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,800,000,000 | ' | ' | $1,800,000,000 | ' | ' | $850,000,000 | ' | ' | ' | $1,050,000,000 | ' | ' | ' | ' | $500,000,000 | ' | ' | $300,000,000 | ' | ' | ' | $141,000,000 | ' | ' | ' | ' | $150,000,000 |
Debt repurchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 645,000,000 | ' | ' | ' | 767,000,000 | ' | ' | ' | ' | ' | ' | 161,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate, stated percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.13% | 8.13% | 8.13% | 6.00% | 6.00% | 6.00% | 4.50% | 4.50% | 4.50% | 10.00% | 4.38% | 4.38% | 4.38% | 8.88% | 4.75% | 4.75% | 4.75% | 6.75% | 6.75% | 6.75% | 7.38% | 7.38% | 7.38% | 6.25% | 6.25% | 6.25% | 8.00% | 8.00% | 8.00% |
Remaining carrying amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 69,000,000 | ' | ' | ' | ' | ' | 158,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss from early extinguishment of debt | ' | 348,000,000 | 4,000,000 | 117,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 177,000,000 | ' | ' | ' | 171,000,000 | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from sale of notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 142,000,000 | ' | ' | ' | ' | ' |
Preferred stock 7% mandatory convertible shares retired | 298,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, percent of mandatory convertible shares | 7.00% | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price as a percentage of principal amounts of the notes redeemed | ' | ' | ' | ' | 100.00% | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amount at which the notes are redeemable due to a change of control | ' | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold limit of revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold limit of unused borrowing availability under the revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset value as a percentage of consolidated net tangible assets for properties to be defined as principal property | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured debt by principal properties as a percentage of consolidated net tangible assets | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold limit for secured debt | ' | ' | ' | ' | ' | ' | ' | 3,200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured debt ratio | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold limit for debt secured by a lien on par to the lien securing senior secured notes | ' | ' | ' | ' | ' | ' | ' | $2,600,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured debt ratio for debt secured by a lien on par to the lien securing senior secured notes | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
LONGTERM_DEBT_AND_LEASE_OBLIGA5
LONG-TERM DEBT AND LEASE OBLIGATIONS (Details 4) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Long-term debt, including capital lease obligations | ' | ' | ' |
Total | $10,867 | ' | ' |
2014 | 149 | ' | ' |
2015 | 539 | ' | ' |
2016 | 430 | ' | ' |
2017 | 49 | ' | ' |
2018 | 1,047 | ' | ' |
Later Years | 8,653 | ' | ' |
Long-term non-cancelable operating leases | ' | ' | ' |
Total | 663 | ' | ' |
2014 | 137 | ' | ' |
2015 | 117 | ' | ' |
2016 | 102 | ' | ' |
2017 | 80 | ' | ' |
2018 | 56 | ' | ' |
Later Years | 171 | ' | ' |
Rental expense | ' | ' | ' |
Rental expense under operating leases | 186 | 156 | 143 |
Sublease income | $8 | $8 | $8 |
GUARANTEES_Details
GUARANTEES (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Income Guarantee | ' |
GUARANTEES | ' |
Guarantee obligation period | '12 months |
Commitment period | '3 years |
Revenue Collection Guarantees | Minimum | ' |
GUARANTEES | ' |
Guarantee obligation period | '1 year |
Revenue Collection Guarantees | Maximum | ' |
GUARANTEES | ' |
Guarantee obligation period | '3 years |
Income and Revenue Collection Guarantee | ' |
GUARANTEES | ' |
Maximum potential amount of future payments under guarantees | 108 |
Liability for the fair value of guarantees | 78 |
Guaranteed Minimum Rent | ' |
GUARANTEES | ' |
Maximum potential amount of future payments under guarantees | 16 |
Liability for the fair value of guarantees | 2 |
Guarantee obligations for recorded liabilities, current | 1 |
Guarantee obligations for recorded liabilities, long term | 1 |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | $37 | ' | $1 |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 37 | ' | 1 |
Continuing operations | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 39 | 33 | 25 |
Stock-based compensation costs, after tax | 24 | 21 | 15 |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 39 | 33 | 25 |
Stock Options | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Expiration period from the date of grant | '10 years | ' | ' |
Portion of awards vesting on each of the first three anniversary dates of the grant (as a percent) | 33.00% | ' | ' |
Vesting period | '3 years | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Awards granted (in shares) | 295,639 | 477,500 | 0 |
Exercise Price Per Share (in dollars per share) | $39.41 | $22.79 | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $14.46 | $12.05 | ' |
Stock Options | Grant Date, February 28, 2013 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 1 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Awards granted (in shares) | 266,000 | ' | ' |
Exercise Price Per Share (in dollars per share) | $39.31 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $14.46 | ' | ' |
Stock-Based Compensation Expense | 1 | ' | ' |
Stock Options | Grant Date, February 29, 2012 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 2 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Awards granted (in shares) | 355,000 | ' | ' |
Exercise Price Per Share (in dollars per share) | $22.60 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $11.96 | ' | ' |
Stock-Based Compensation Expense | 2 | ' | ' |
Restricted Stock Units | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Contractual right to receive shares of common stock for a stock based award | 1 | ' | ' |
Portion of awards vesting on each of the first three anniversary dates of the grant (as a percent) | 33.00% | ' | ' |
Vesting period | '3 years | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Awards granted (in shares) | 1,564,224 | 1,654,337 | 1,138,350 |
Fair Value Per Share at Grant Date (in dollars per share) | $41.20 | $22.18 | $27.04 |
Restricted Stock Units | Grant Date, October 31, 2013 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 1 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 1 | ' | ' |
Awards granted (in shares) | 178,000 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $47.19 | ' | ' |
Restricted Stock Units | Grant Date, June 13, 2013 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 1 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 1 | ' | ' |
Awards granted (in shares) | 318,000 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $47.13 | ' | ' |
Restricted Stock Units | Grant Date, May 6, 2013 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 1 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 1 | ' | ' |
Awards granted (in shares) | 30,000 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $47 | ' | ' |
Restricted Stock Units | Grant Date, February 28, 2013 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 7 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 7 | ' | ' |
Awards granted (in shares) | 841,000 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $39.31 | ' | ' |
Restricted Stock Units | Grant Date, February 29, 2012 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 6 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 6 | ' | ' |
Awards granted (in shares) | 987,000 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $22.60 | ' | ' |
Restricted Stock Units | Grant Date, January 31, 2012 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 2 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 2 | ' | ' |
Awards granted (in shares) | 64,000 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $21.16 | ' | ' |
Restricted Stock Units | Grant Date, November 4, 2011 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 1 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 1 | ' | ' |
Awards granted (in shares) | 60,000 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $19.44 | ' | ' |
Restricted Stock Units | Grant Date, February 23, 2011 | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 9 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | 9 | ' | ' |
Awards granted (in shares) | 890,000 | ' | ' |
Fair Value Per Share at Grant Date (in dollars per share) | $27.60 | ' | ' |
Restricted Stock Units | Grant date, Other grants | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Stock-based compensation costs, pretax | 6 | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock-Based Compensation Expense | $6 | ' | ' |
2008 Stock Incentive Plan | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Shares available for issuance under the plan | 2,100,000 | ' | ' |
2008 Stock Incentive Plan | Stock Options | ' | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' | ' |
Expiration period from the date of grant | '5 years | ' | ' |
Vesting period | '3 years | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Awards granted (in shares) | 295,639 | 477,500 | ' |
Other plans | ' | ' | ' |
Information pertaining to the awards on the basis of grant date | ' | ' | ' |
Stock based awards granted | 0 | ' | ' |
EMPLOYEE_BENEFIT_PLANS_Details1
EMPLOYEE BENEFIT PLANS (Details 2) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
Stock option activity | ' | ' | ' |
Outstanding at the end of the period (in shares) | 3,308,111 | ' | ' |
Stock Options | ' | ' | ' |
Stock option activity | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 4,289,192 | 8,498,393 | 10,788,887 |
Granted (in shares) | 295,639 | 477,500 | 0 |
Exercised (in shares) | -946,086 | -3,657,127 | -629,021 |
Forfeited/Expired (in shares) | -330,634 | -1,029,574 | -1,661,473 |
Outstanding at the end of the period (in shares) | 3,308,111 | 4,289,192 | 8,498,393 |
Vested and expected to vest at the end of the period (in shares) | 3,294,282 | ' | ' |
Exercisable at the end of the period (in shares) | 2,776,320 | ' | ' |
Weighted Average Exercise Price Per Share | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $30.49 | $25.04 | $39.88 |
Granted (in dollars per share) | $39.41 | $22.79 | ' |
Exercised (in dollars per share) | $23.34 | $5.77 | $5.24 |
Forfeited/Expired (in dollars per share) | $55.79 | $69.72 | $128.92 |
Outstanding at the end of the period (in dollars per share) | $30.79 | $30.49 | $25.04 |
Vested and expected to vest at the end of the period (in dollars per share) | $30.76 | ' | ' |
Exercisable at the end of the period (in dollars per share) | $30.66 | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' |
Outstanding at the end of the period | $41 | ' | ' |
Vested and expected to vest at the end of the period | 41 | ' | ' |
Exercisable at the end of the period | 36 | ' | ' |
Weighted Average Remaining Life | ' | ' | ' |
Outstanding at the end of the period | '3 years 3 months 18 days | ' | ' |
Vested and expected to vest at the end of the period | '3 years 3 months 18 days | ' | ' |
Exercisable at the end of the period | '2 years 9 months 18 days | ' | ' |
Other Disclosures | ' | ' | ' |
Aggregate Intrinsic value of awards exercised | 18 | 71 | ' |
Unrecognized compensation costs | $4 | ' | ' |
Period for recognition of unrecognized compensation costs | '1 year 8 months 12 days | ' | ' |
Vesting period | '3 years | ' | ' |
Expiration period | '10 years | ' | ' |
Weighted average estimated fair value of awards granted (in dollars per share) | $14.46 | $12.05 | ' |
Assumptions used to calculate fair value of awards granted to top eleven employees | ' | ' | ' |
Expected volatility (as a percent) | 50.00% | 52.00% | ' |
Expected dividend yield (as a percent) | 0.00% | 0.00% | ' |
Expected life | '3 years 7 months 6 days | '6 years 10 months 24 days | ' |
Expected forfeiture rate (as a percent) | 6.00% | 2.00% | ' |
Risk-free interest rate (as a percent) | 0.48% | ' | ' |
Risk-free interest rate, minimum (as a percent) | ' | 1.06% | ' |
Risk-free interest rate, maximum (as a percent) | ' | 1.41% | ' |
Early exercise threshold gain (as a percent) | 100.00% | 70.00% | ' |
Early exercise rate, gain (as a percent) | 50.00% | 20.00% | ' |
Number of years excluded from historical share-price volatility | 2 | ' | ' |
Stock Options | 2008 Stock Incentive Plan | ' | ' | ' |
Stock option activity | ' | ' | ' |
Granted (in shares) | 295,639 | 477,500 | ' |
Other Disclosures | ' | ' | ' |
Vesting period | '3 years | ' | ' |
Expiration period | '5 years | ' | ' |
Stock Options | 2008 Stock Incentive Plan | Time-vesting | ' | ' | ' |
Stock option activity | ' | ' | ' |
Granted (in shares) | ' | 257,500 | ' |
Stock Options | 2008 Stock Incentive Plan | Performance-based vesting | ' | ' | ' |
Stock option activity | ' | ' | ' |
Granted (in shares) | ' | 220,000 | ' |
Other Disclosures | ' | ' | ' |
Vesting period | '3 years | ' | ' |
EMPLOYEE_BENEFIT_PLANS_Details2
EMPLOYEE BENEFIT PLANS (Details 3) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 3,308,111 |
Number of Options Exercisable (in shares) | 2,776,320 |
Weighted Average Remaining Contractual life | '3 years 3 months 18 days |
Weighted Average Exercise Price Outstanding (in dollars per share) | $30.79 |
Weighted Average Exercise Price (in dollars per share) | $30.66 |
Stock Options | Range of Exercise Prices, $0.00 to $4.569 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | $0 |
Exercise price per share, high end of the range (in dollars per share) | $4.57 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 324,542 |
Number of Options Exercisable (in shares) | 324,542 |
Weighted Average Remaining Contractual life | '5 years 1 month 6 days |
Weighted Average Exercise Price Outstanding (in dollars per share) | $4.56 |
Weighted Average Exercise Price (in dollars per share) | $4.56 |
Stock Options | Range of Exercise Prices, $4.57 to $25.089 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | $4.57 |
Exercise price per share, high end of the range (in dollars per share) | $25.09 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 1,027,963 |
Number of Options Exercisable (in shares) | 774,623 |
Weighted Average Remaining Contractual life | '5 years 10 months 24 days |
Weighted Average Exercise Price Outstanding (in dollars per share) | $20.83 |
Weighted Average Exercise Price (in dollars per share) | $20.17 |
Stock Options | Range of Exercise Prices, $25.09 to $32.569 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | $25.09 |
Exercise price per share, high end of the range (in dollars per share) | $32.57 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 518,804 |
Number of Options Exercisable (in shares) | 518,804 |
Weighted Average Remaining Contractual life | '2 years 6 months |
Weighted Average Exercise Price Outstanding (in dollars per share) | $29.64 |
Weighted Average Exercise Price (in dollars per share) | $29.64 |
Stock Options | Range of Exercise Prices, $32.57 to $42.529 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | $32.57 |
Exercise price per share, high end of the range (in dollars per share) | $42.53 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 798,781 |
Number of Options Exercisable (in shares) | 520,330 |
Weighted Average Remaining Contractual life | '2 years 2 months 12 days |
Weighted Average Exercise Price Outstanding (in dollars per share) | $41.17 |
Weighted Average Exercise Price (in dollars per share) | $42.17 |
Stock Options | Range of Exercise Prices, $42.53 to $55.129 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | $42.53 |
Exercise price per share, high end of the range (in dollars per share) | $55.13 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 638,021 |
Number of Options Exercisable (in shares) | 638,021 |
Weighted Average Remaining Contractual life | '2 months 12 days |
Weighted Average Exercise Price Outstanding (in dollars per share) | $48.11 |
Weighted Average Exercise Price (in dollars per share) | $48.11 |
EMPLOYEE_BENEFIT_PLANS_Details3
EMPLOYEE BENEFIT PLANS (Details 4) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
EMPLOYEE BENEFIT PLANS | ' |
Market price of the entity's common stock (in dollars per share) | $42.12 |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 3,308,111 |
Percentage of awards outstanding | 100.00% |
Percentage to the total of outstanding options | 100.00% |
Current employees | ' |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 2,611,371 |
Percentage of awards outstanding | 78.90% |
Former employees | ' |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 696,740 |
Percentage of awards outstanding | 21.10% |
In-the-Money Options | ' |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 2,552,757 |
Percentage of awards outstanding | 100.00% |
Percentage to the total of outstanding options | 77.20% |
In-the-Money Options | Current employees | ' |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 2,177,530 |
Percentage of awards outstanding | 85.30% |
In-the-Money Options | Former employees | ' |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 375,227 |
Percentage of awards outstanding | 14.70% |
Out-of-the-Money Options | ' |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 755,354 |
Percentage of awards outstanding | 100.00% |
Percentage to the total of outstanding options | 22.80% |
Out-of-the-Money Options | Current employees | ' |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 433,841 |
Percentage of awards outstanding | 57.40% |
Out-of-the-Money Options | Former employees | ' |
EMPLOYEE BENEFIT PLANS | ' |
Options outstanding (in shares) | 321,513 |
Percentage of awards outstanding | 42.60% |
EMPLOYEE_BENEFIT_PLANS_Details4
EMPLOYEE BENEFIT PLANS (Details 5) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Restricted Stock Units | ' | ' | ' |
Restricted stock unit activity | ' | ' | ' |
Unvested at the beginning of the period (in shares) | 2,295,942 | 1,927,307 | 1,580,318 |
Granted (in shares) | 1,564,224 | 1,654,337 | 1,138,350 |
Vested (in shares) | -966,838 | -1,033,632 | -722,471 |
Forfeited (in shares) | -186,106 | -252,070 | -68,890 |
Unvested at the end of the period (in shares) | 2,707,222 | 2,295,942 | 1,927,307 |
Weighted Average Grant Date Fair Value Per Unit | ' | ' | ' |
Unvested at the beginning of the period (in dollars per share) | $23.40 | $24.52 | $20.56 |
Granted (in dollars per share) | $41.20 | $22.18 | $27.04 |
Vested (in dollars per share) | $24.20 | $23.51 | $19.92 |
Forfeited (in dollars per share) | $29.69 | $23.39 | $23.72 |
Unvested at the end of the period (in dollars per share) | $33.34 | $23.40 | $24.52 |
Other Disclosures | ' | ' | ' |
Granted (in shares) | 1,564,224 | 1,654,337 | 1,138,350 |
Vesting period | '3 years | ' | ' |
Unrecognized compensation costs | $63,000,000 | ' | ' |
Period for recognition of unrecognized compensation costs | '2 years 10 months 24 days | ' | ' |
Restricted Stock Units | Chief executive officer | ' | ' | ' |
Restricted stock unit activity | ' | ' | ' |
Granted (in shares) | 212,180 | ' | ' |
Other Disclosures | ' | ' | ' |
Granted (in shares) | 212,180 | ' | ' |
Vesting period | '6 years | ' | ' |
Percentage of restricted stock units, which will vest three years from the grant date | 50.00% | ' | ' |
Remaining percentage of restricted stock units, which will vest thereafter three years from the grant date | 50.00% | ' | ' |
Restricted Stock Units | Time-vesting | ' | ' | ' |
Restricted stock unit activity | ' | ' | ' |
Granted (in shares) | 1,122,811 | 1,538,082 | ' |
Other Disclosures | ' | ' | ' |
Restricted stock that will vest and be settled over a three-year period from the grant date (in shares) | 1,023,112 | ' | ' |
Restricted stock that will vest and be settled on the fifth anniversary of the grant date (in shares) | 80,133 | ' | ' |
Percentage of restricted stock units, which will vest on the fifth anniversary of the grant date | 100.00% | ' | ' |
Restricted stock that will vest and be settled on the third anniversary of the grant date (in shares) | 19,566 | ' | ' |
Percentage of restricted stock units, which will vest on the third anniversary of the grant date | 100.00% | ' | ' |
Granted (in shares) | 1,122,811 | 1,538,082 | ' |
Vesting period | '3 years | '3 years | ' |
Restricted Stock Units | Time-vesting | Chief executive officer | ' | ' | ' |
Restricted stock unit activity | ' | ' | ' |
Granted (in shares) | 106,090 | ' | ' |
Other Disclosures | ' | ' | ' |
Granted (in shares) | 106,090 | ' | ' |
Restricted Stock Units | Performance-based vesting | ' | ' | ' |
Restricted stock unit activity | ' | ' | ' |
Granted (in shares) | 206,058 | 116,255 | ' |
Other Disclosures | ' | ' | ' |
Granted (in shares) | 206,058 | 116,255 | ' |
Vesting period | '3 years | '3 years | ' |
Restricted Stock Units | Performance-based vesting | Chief information officer | ' | ' | ' |
Restricted stock unit activity | ' | ' | ' |
Granted (in shares) | 23,175 | ' | ' |
Other Disclosures | ' | ' | ' |
Granted (in shares) | 23,175 | ' | ' |
Vesting period | '3 years | ' | ' |
Percentage of restricted stock units, which will vest three years from the grant date | 100.00% | ' | ' |
Restricted Stock Units | Performance-based vesting | Chief executive officer | ' | ' | ' |
Restricted stock unit activity | ' | ' | ' |
Granted (in shares) | 106,090 | ' | ' |
Other Disclosures | ' | ' | ' |
Granted (in shares) | 106,090 | ' | ' |
Additional award to be granted (in shares) | 106,090 | ' | ' |
Employee Stock Purchase Plan | ' | ' | ' |
Employee Stock Purchase Plan | ' | ' | ' |
Number of shares authorized to be issued under the plan | 5,062,500 | ' | ' |
Shares available for issuance under the plan | 405,381 | ' | ' |
Percentage of closing price at which shares are purchased by participant | 95.00% | ' | ' |
Requisite holding period for shares issued under the plan | '1 year | ' | ' |
Fair market value per employee per year | $25,000 | ' | ' |
Employee stock purchase plan activity | ' | ' | ' |
Number of shares | 100,217 | 144,021 | 187,409 |
Weighted average price (in dollars per share) | $42.88 | $22.81 | $21.44 |
Employee Stock Purchase Plan | Minimum | ' | ' | ' |
Employee Stock Purchase Plan | ' | ' | ' |
Base earnings elected to be withheld each quarter by eligible employees to purchase shares of the entity's common stock (as a percent) | 1.00% | ' | ' |
Employee Stock Purchase Plan | Maximum | ' | ' | ' |
Employee Stock Purchase Plan | ' | ' | ' |
Base earnings elected to be withheld each quarter by eligible employees to purchase shares of the entity's common stock (as a percent) | 10.00% | ' | ' |
EMPLOYEE_BENEFIT_PLANS_Details5
EMPLOYEE BENEFIT PLANS (Details 6) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
401(k) plan | ' | ' | ' |
Contribution expense | $35 | $32 | $32 |
Defined benefit pension plans (SERPs and DMC Pension Plan) | ' | ' | ' |
Number of active non-qualified defined benefit pension plans | 1 | ' | ' |
Number of frozen non-qualified defined benefit pension plans | 2 | ' | ' |
Projected benefit obligations | ' | ' | ' |
Beginning obligations | -312 | -285 | ' |
Assumed from acquisition | -1,037 | 0 | ' |
Service cost | -2 | -2 | -2 |
Interest cost | -25 | -14 | -14 |
Actuarial gain(loss) | 44 | -30 | ' |
Plan changes | -2 | 0 | ' |
Benefits paid/employer contributions | 31 | 19 | ' |
Ending obligations | -1,303 | -312 | -285 |
Fair value of plans assets | ' | ' | ' |
Beginning obligations | 0 | 0 | ' |
Assumed from acquisition | 863 | 0 | ' |
Gain on plan assets | 34 | 0 | ' |
Benefits paid | -11 | 0 | ' |
Ending plan assets | 886 | 0 | 0 |
Funded status of plans | -417 | -312 | ' |
Amounts recognized in the Consolidated Balance Sheets consist of: | ' | ' | ' |
Other current liability | -19 | -20 | ' |
Other long-term liability | 398 | 292 | ' |
Accumulated other comprehensive loss | 22 | 90 | ' |
Total | -395 | -222 | ' |
Accumulated benefit obligation | 1,297 | 308 | ' |
Components of net periodic benefit costs | ' | ' | ' |
Service costs | 2 | 2 | 2 |
Interest costs | 25 | 14 | 14 |
Amortization of prior-year service costs | -15 | 0 | 0 |
Amortization of net actuarial loss | 7 | 5 | 3 |
Net periodic benefit cost | 19 | 21 | 19 |
Amounts recognized in other comprehensive income (loss) | ' | ' | ' |
Gain (loss) adjustments recorded in other comprehensive income (loss) | 68 | -25 | -15 |
Net actuarial gains/(losses) | 63 | -30 | -19 |
Amounts that have not yet been recognized as components of net periodic benefit costs | ' | ' | ' |
Cumulative net actuarial losses | 21 | 90 | 65 |
SERP | ' | ' | ' |
Assumptions: | ' | ' | ' |
Discount rate (as a percent) | 5.00% | 4.00% | ' |
Compensation increase rate (as a percent) | 3.00% | 3.00% | ' |
Assumptions: | ' | ' | ' |
Discount rate (as a percent) | 4.00% | 5.00% | 5.50% |
Compensation increase rate (as a percent) | 3.00% | 3.00% | 3.00% |
DMC Pension Plan | ' | ' | ' |
Fair value of plans assets | ' | ' | ' |
Ending plan assets | 886 | ' | ' |
Assumptions: | ' | ' | ' |
Discount rate (as a percent) | 5.18% | ' | ' |
Assumptions: | ' | ' | ' |
Discount rate (as a percent) | 5.01% | ' | ' |
Long-term rate of return on assets (as a percent) | 7.00% | ' | ' |
Maximum | ' | ' | ' |
Amounts recognized in other comprehensive income (loss) | ' | ' | ' |
Amortization of prior-year service costs | 1 | 1 | 1 |
Amounts that have not yet been recognized as components of net periodic benefit costs | ' | ' | ' |
Unrecognized prior service costs | $1 | $1 | $1 |
EMPLOYEE_BENEFIT_PLANS_Details6
EMPLOYEE BENEFIT PLANS (Details 7) (DMC Pension Plan) | 12 Months Ended |
Dec. 31, 2013 | |
Weighted-average asset allocations by asset category | ' |
Allowable deviation percentage from target | 10.00% |
Cash and cash equivalents | ' |
Weighted-average asset allocations by asset category | ' |
Target | 6.00% |
Actual | 6.00% |
United States government obligations | ' |
Weighted-average asset allocations by asset category | ' |
Target | 1.00% |
Actual | 1.00% |
Equity securities | ' |
Weighted-average asset allocations by asset category | ' |
Target | 45.00% |
Actual | 51.00% |
Debt securities | ' |
Weighted-average asset allocations by asset category | ' |
Target | 48.00% |
Actual | 42.00% |
EMPLOYEE_BENEFIT_PLANS_Details7
EMPLOYEE BENEFIT PLANS (Details 8) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | $886 | $0 | $0 |
SERP and DMC Pension Plan | ' | ' | ' |
Total | 841 | ' | ' |
2014 | 88 | ' | ' |
2015 | 74 | ' | ' |
2016 | 76 | ' | ' |
2017 | 80 | ' | ' |
2018 | 82 | ' | ' |
Five Years Thereafter | 441 | ' | ' |
Amounts recognized in the Consolidated Balance Sheets consist of: | ' | ' | ' |
Other current liability | -19 | -20 | ' |
Defined benefit plan obligations | -398 | -292 | ' |
Total | -395 | -222 | ' |
Expected contribution to the plan for 2014 | 28 | ' | ' |
DMC Pension Plan | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 886 | ' | ' |
DMC Pension Plan | Cash and cash equivalents | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 53 | ' | ' |
DMC Pension Plan | United States government obligations | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 5 | ' | ' |
DMC Pension Plan | Equity securities | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 452 | ' | ' |
DMC Pension Plan | Debt securities | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 376 | ' | ' |
DMC Pension Plan | Level 1 | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 886 | ' | ' |
DMC Pension Plan | Level 1 | Cash and cash equivalents | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 53 | ' | ' |
DMC Pension Plan | Level 1 | United States government obligations | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 5 | ' | ' |
DMC Pension Plan | Level 1 | Equity securities | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | 452 | ' | ' |
DMC Pension Plan | Level 1 | Debt securities | ' | ' | ' |
DMC Pension Plan assets measured at fair value on a recurring basis | ' | ' | ' |
Fair value of DMC Pension Plan assets | $376 | ' | ' |
CAPITAL_COMMITMENTS_Details
CAPITAL COMMITMENTS (Details) (USD $) | Dec. 31, 2013 |
CAPITAL COMMITMENTS | ' |
Required escrow balance | $0 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Components of property and equipment | ' | ' |
Gross property and equipment | $11,589 | $7,787 |
Accumulated depreciation and amortization | -3,898 | -3,494 |
Net property and equipment | 7,691 | 4,293 |
Land | ' | ' |
Components of property and equipment | ' | ' |
Gross property and equipment | 589 | 341 |
Buildings and improvements | ' | ' |
Components of property and equipment | ' | ' |
Gross property and equipment | 6,369 | 4,087 |
Construction in progress | ' | ' |
Components of property and equipment | ' | ' |
Gross property and equipment | 593 | 140 |
Equipment | ' | ' |
Components of property and equipment | ' | ' |
Gross property and equipment | $4,038 | $3,219 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in the carrying amount of goodwill | ' | ' |
Total | $916 | ' |
Goodwill allocated to hospital sold | 5 | ' |
Total | 3,042 | ' |
Hospital Operations and other | ' | ' |
Changes in the carrying amount of goodwill | ' | ' |
Goodwill | 3,268 | 3,166 |
Accumulated impairment losses | -2,430 | -2,430 |
Total | 838 | 736 |
Goodwill acquired during the year and purchase price allocation adjustments | 2,121 | 104 |
Goodwill allocated to hospital sold | 0 | -2 |
Impairment of goodwill | 0 | 0 |
Goodwill | 5,389 | 3,268 |
Accumulated impairment losses | -2,430 | -2,430 |
Total | 2,959 | 838 |
Conifer Segment | ' | ' |
Changes in the carrying amount of goodwill | ' | ' |
Goodwill | 78 | 0 |
Accumulated impairment losses | 0 | 0 |
Total | 78 | 0 |
Goodwill acquired during the year and purchase price allocation adjustments | 5 | 78 |
Goodwill | 83 | 78 |
Accumulated impairment losses | 0 | 0 |
Total | $83 | $78 |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Information regarding other intangible assets | ' | ' |
Gross Carrying Amount | $1,715 | $1,076 |
Gross Carrying Amount | 1,102 | ' |
Accumulated Amortization | -523 | -426 |
Net Book Value | 1,192 | 650 |
Estimated future amortization of intangibles with finite useful lives | ' | ' |
Total | 1,102 | ' |
2014 | 224 | ' |
2015 | 206 | ' |
2016 | 126 | ' |
2017 | 82 | ' |
2018 | 77 | ' |
Later Years | 387 | ' |
Capitalized software costs | ' | ' |
Information regarding other intangible assets | ' | ' |
Gross Carrying Amount | 1,260 | 927 |
Accumulated Amortization | -475 | -399 |
Net Book Value | 785 | 528 |
Long-term debt issuance costs | ' | ' |
Information regarding other intangible assets | ' | ' |
Gross Carrying Amount | 230 | 106 |
Accumulated Amortization | -31 | -25 |
Net Book Value | 199 | 81 |
Trade names | ' | ' |
Information regarding other intangible assets | ' | ' |
Gross Carrying Amount | 81 | ' |
Accumulated Amortization | 0 | ' |
Net Book Value | 81 | ' |
Estimated future amortization of intangibles with finite useful lives | ' | ' |
Total | 81 | ' |
Contracts | ' | ' |
Information regarding other intangible assets | ' | ' |
Gross Carrying Amount | 64 | ' |
Accumulated Amortization | -2 | ' |
Net Book Value | 62 | ' |
Other | ' | ' |
Information regarding other intangible assets | ' | ' |
Gross Carrying Amount | 80 | 43 |
Accumulated Amortization | -15 | -2 |
Net Book Value | $65 | $41 |
INVESTMENTS_AND_OTHER_ASSETS_D
INVESTMENTS AND OTHER ASSETS (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Investments and other assets | ' | ' |
Marketable debt securities | $62 | $15 |
Equity investments in unconsolidated health care entities | 56 | 22 |
Total investments | 118 | 37 |
Cash surrender value of life insurance policies | 25 | 21 |
Long-term deposits | 35 | 16 |
Land held for expansion, long-term receivables and other assets | 227 | 88 |
Investments and other assets | 405 | 162 |
Equity earnings of unconsolidated affiliates | 15 | 8 |
Accumulated unrealized gains on investments, maximum | $1 | $1 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated other comprehensive loss | ' | ' |
Accumulated other comprehensive loss | ($24) | ($68) |
Tax effect allocated to adjustments for defined benefit plans | -25 | 9 |
Unamortized realized losses from interest rate lock derivatives | ' | ' |
Accumulated other comprehensive loss | ' | ' |
Accumulated other comprehensive loss | ' | -1 |
Adjustments for defined benefit plans | ' | ' |
Accumulated other comprehensive loss | ' | ' |
Accumulated other comprehensive loss | ($24) | ($67) |
PROPERTY_AND_PROFESSIONAL_AND_1
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Insurance coverage | ' | ' | ' |
Risk-free rate (as a percent) | 2.45% | 1.18% | ' |
Malpractice expense | $112 | $92 | $108 |
Professional and General Liability Insurance | ' | ' | ' |
Insurance coverage | ' | ' | ' |
Self insurance reserve | $699 | $356 | ' |
Loss contingency, discount rate maturity (in years) | 'P7Y | 'P7Y | 'P7Y |
Risk-free rate (as a percent) | 2.45% | 1.18% | 1.35% |
CLAIMS_AND_LAWSUITS_Details
CLAIMS AND LAWSUITS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Jan. 31, 2013 | Dec. 31, 2013 | Jul. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Governmental Reviews | Kyphoplasty | Kyphoplasty | Kyphoplasty | ICD | Hospital-Related Tort Claim | Vanguard Acquisition Lawsuits | Ordinary Course Matters | Ordinary Course Matters | |||||
item | item | item | item | item | person | Minimum | |||||||
person | |||||||||||||
Loss Contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of hospitals under governmental review | ' | ' | ' | ' | ' | ' | ' | 7 | 52 | ' | ' | ' | ' |
Settlement amount | ' | ' | ' | ' | ' | $900,000 | ' | ' | ' | $8,000,000 | ' | ' | ' |
Number of hospitals under Medicare claims review | ' | ' | ' | ' | ' | ' | 2 | ' | 21 | ' | ' | ' | ' |
Number of hospitals under Medicare claims review of which estimated loss or range of loss is not being able to be calculated | ' | ' | ' | ' | ' | ' | 4 | ' | 31 | ' | ' | ' | ' |
Number of hospitals for which review of billing practices is not completed by clinical expert | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Number of hospitals for which agreement with DOJ on appropriate review methodology has not been reached | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Number of defendants | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation reserve | $46,000,000 | $10,000,000 | $66,000,000 | $30,000,000 | $27,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Hospitals under review of Billing Practices | ' | ' | ' | ' | 23 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of class action lawsuits filed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Number of persons in class action lawsuits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 |
Number of persons identified in class certification process | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' |
CLAIMS_AND_LAWSUITS_Details_2
CLAIMS AND LAWSUITS (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Loss Contingencies | ' | ' | ' |
Litigation reserve, Balances at Beginning of Period | $10 | $66 | $30 |
Litigation and Investigation costs | 33 | 5 | 72 |
Cash Payments | -11 | -61 | -36 |
Other | 14 | 0 | 0 |
Litigation reserve, Balances at End of Period | 46 | 10 | 66 |
Claims, lawsuits, and regulatory proceedings | Continuing operations | ' | ' | ' |
Loss Contingencies | ' | ' | ' |
Litigation reserve, Balances at Beginning of Period | 5 | 49 | 30 |
Litigation and Investigation costs | 31 | 5 | 55 |
Cash Payments | -10 | -49 | -36 |
Other | 14 | 0 | 0 |
Litigation reserve, Balances at End of Period | 40 | 5 | 49 |
Claims, lawsuits, and regulatory proceedings | Discontinued operations | ' | ' | ' |
Loss Contingencies | ' | ' | ' |
Litigation reserve, Balances at Beginning of Period | 5 | 17 | 0 |
Litigation and Investigation costs | 2 | 0 | 17 |
Cash Payments | -1 | -12 | 0 |
Other | 0 | 0 | 0 |
Litigation reserve, Balances at End of Period | $6 | $5 | $17 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current tax expense (benefit): | ' | ' | ' |
Federal | $2 | ($3) | $0 |
State | 4 | 11 | -6 |
Total | 6 | 8 | -6 |
Deferred tax expense (benefit): | ' | ' | ' |
Federal | -56 | 117 | 62 |
State | -15 | 0 | 5 |
Total | -71 | 117 | 67 |
Income tax expense (benefit) | -65 | 125 | 61 |
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 35% | -55 | 117 | 57 |
State income taxes, net of federal income tax benefit | 1 | 13 | 10 |
Tax attributable to noncontrolling interests | -10 | -4 | -4 |
Nondeductible transaction costs | 6 | 0 | 0 |
Other changes in valuation allowance | -2 | -5 | -2 |
Change in tax contingency reserves, including interest | -7 | -1 | -12 |
Prior-year provision to return adjustment and other changes in deferred taxes, net of valuation allowance | 3 | 3 | 7 |
Other items | -1 | 2 | 5 |
Income tax expense (benefit) | ($65) | $125 | $61 |
Statutory federal rate (as a percent) | 35.00% | 35.00% | 35.00% |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Assets | ' | ' |
Reserves related to discontinued operations and restructuring charges | $20 | $5 |
Receivables (doubtful accounts and adjustments) | 209 | 173 |
Accruals for retained insurance risks | 288 | 182 |
Other long-term liabilities | 76 | 55 |
Benefit plans | 299 | 214 |
Other accrued liabilities | 60 | 11 |
Investments and other assets | ' | 6 |
Net operating loss carryforwards | 708 | 588 |
Stock-based compensation | 28 | 32 |
Other items | 29 | 36 |
Deferred tax assets, gross | 1,717 | 1,302 |
Valuation allowance | -107 | -56 |
Deferred tax assets, net | 1,610 | 1,246 |
Liabilities | ' | ' |
Depreciation and fixed-asset differences | 678 | 375 |
Deferred gain on debt exchanges | 53 | 53 |
Intangible assets | 163 | 122 |
Investments and other assets | 45 | ' |
Deferred tax liabilities, total | 939 | 550 |
Reconciliation of the deferred tax assets and liabilities | ' | ' |
Current portion of deferred income tax asset | 581 | 354 |
Deferred income tax asset, net of current portion | 90 | 342 |
Noncurrent deferred income tax liability | 0 | 0 |
Net deferred tax asset | $671 | $696 |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
INCOME TAXES | ' | ' | ' |
Change in valuation allowance against deferred tax assets | $51 | ($5) | ($5) |
Change in valuation allowance against deferred tax assets due to acquisition of Vanguard | 34 | ' | ' |
Change in valuation allowance against deferred tax assets due to state net operating loss carryforwards | 17 | ' | ' |
Valuation allowance attributable to certain state net operating loss carryovers | 107 | 56 | ' |
Changes in unrecognized tax benefits | ' | ' | ' |
Balance at the beginning of the period | 32 | 35 | 35 |
Additions for prior-year tax positions | 15 | 0 | 15 |
Reductions for tax positions of prior years | 0 | -2 | -2 |
Additions for current-year tax positions | 3 | 2 | 3 |
Reductions for current-year tax positions | 0 | 0 | 0 |
Reductions due to settlements with taxing authorities | 0 | -3 | -12 |
Reductions due to a lapse of statute of limitations | -7 | 0 | -4 |
Balance at the end of the period | 43 | 32 | 35 |
Unrecognized tax benefits which, if recognized, would impact effective tax rate | 34 | 32 | 35 |
Current tax expense due to increase in liabilities for uncertain tax positions | ' | 3 | ' |
Current tax benefit due to reduction of liabilities for uncertain tax positions | ' | ' | 21 |
Current tax benefit due to reduction of liabilities for uncertain tax positions, continuing operations | 1 | ' | 2 |
Current tax benefit due to reduction of liabilities for uncertain tax positions, discontinued operations | ' | ' | 19 |
Uncertain tax positions, interest and penalties related to continuing operations | 1 | ' | ' |
Total accrued interest and penalties on unrecognized tax benefits | 5 | ' | ' |
Continuing operations | ' | ' | ' |
Changes in unrecognized tax benefits | ' | ' | ' |
Balance at the beginning of the period | 31 | 34 | 34 |
Additions for prior-year tax positions | 15 | 0 | 15 |
Reductions for tax positions of prior years | 0 | -2 | -2 |
Additions for current-year tax positions | 3 | 2 | 3 |
Reductions for current-year tax positions | 0 | 0 | 0 |
Reductions due to settlements with taxing authorities | 0 | -3 | -12 |
Reductions due to a lapse of statute of limitations | -6 | 0 | -4 |
Balance at the end of the period | 43 | 31 | 34 |
Discontinued operations | ' | ' | ' |
Changes in unrecognized tax benefits | ' | ' | ' |
Balance at the beginning of the period | 1 | 1 | 1 |
Additions for prior-year tax positions | 0 | 0 | 0 |
Reductions for tax positions of prior years | 0 | 0 | 0 |
Additions for current-year tax positions | 0 | 0 | 0 |
Reductions for current-year tax positions | 0 | 0 | 0 |
Reductions due to settlements with taxing authorities | 0 | 0 | 0 |
Reductions due to a lapse of statute of limitations | -1 | 0 | 0 |
Balance at the end of the period | $0 | $1 | $1 |
INCOME_TAXES_Details_4
INCOME TAXES (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2011 |
In Millions, unless otherwise specified | IRS | |
Audit of tax returns | ' | ' |
Refund of tax and interest received | ' | $18 |
Interest and tax paid | ' | 15 |
Unrecognized federal and state tax benefits and reserves for interest and penalties, which may decrease in the next 12 months | $1 | ' |
INCOME_TAXES_Details_5
INCOME TAXES (Details 5) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Operating loss carryforwards | ' | ' |
Deferred tax benefit, net of valuation allowance and federal tax impact, associated with NOL carryforwards | $708,000,000 | $588,000,000 |
Federal | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards subject to expiration | 1,700,000,000 | ' |
State | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards subject to expiration | 3,800,000,000 | ' |
Deferred tax benefit, net of valuation allowance and federal tax impact, associated with NOL carryforwards | $34,000,000 | ' |
INCOME_TAXES_Details_6
INCOME TAXES (Details 6) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Tax credits | ' |
Rolling period during which certain ownership changes limit ability of the entity for utilization of NOL carryforwards | '3 years |
Percentage of shareholders, purchase or sale of stock by them is considered as ownership change | 5.00% |
Minimum | ' |
Tax credits | ' |
Maximum increase in percentage points of the ownership of the 5% shareholders in a given period to enable the full use of NOL carryfowards | 50.00% |
Alternative minimum tax credits | ' |
Tax credits | ' |
Tax credits carryforwards | 19 |
General business | ' |
Tax credits | ' |
Tax credits carryforwards | 14 |
EARNINGS_LOSS_PER_COMMON_SHARE2
EARNINGS (LOSS) PER COMMON SHARE (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
EARNINGS (LOSS) PER COMMON SHARE | ' | ' | ' |
Income (loss) attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share | ($123) | $185 | $68 |
Income (loss) attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share (in Weighted Average Shares) | 101,648 | 104,200 | 117,182 |
Income attributable to Tenet Healthcare Corporation common shareholders for basic earnings, Per-Share Amount (in dollars per share) | ($1.21) | $1.77 | $0.58 |
Effect of dilutive stock options and restricted stock units | 0 | 0 | 0 |
Effect of dilutive stock options and restricted stock units (in Weighted Average Shares) | 0 | 4,726 | 4,113 |
Effect of dilutive stock options and restricted stock units (Per-Share) | $0 | ($0.07) | ($0.02) |
Income (loss) attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share, Income | ($123) | $185 | $68 |
Income (loss) attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share (in Weighted Average Shares) | 101,648 | 108,926 | 121,295 |
Income attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share, Per-Share Amount (in dollars per share) | ($1.21) | $1.70 | $0.56 |
Effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares | 2,310 | ' | ' |
Anti-dilutive securities excluded from computation of earnings per share | 755 | 2,876 | 3,421 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair value of assets and liabilities measured on recurring basis | ' | ' | ' |
Marketable securities-current | $1 | $4 | ' |
Investments in Reserve Yield Plus Fund | 2 | 2 | ' |
Marketable debt securities-noncurrent | 62 | 14 | ' |
Investments | 65 | 20 | ' |
Impairment charges related to write-down of buildings, equipment and other long-lived assets | 12 | 3 | 6 |
Preferred stock and other securities held by captive insurance subsidiaries | 1 | ' | ' |
Estimated fair value of the long-term debt instrument as a percentage of carrying value | 103.50% | 108.20% | ' |
Auction rate securities | ' | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' | ' |
Change in the fair value using significant unobservable inputs | 0 | 0 | ' |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' | ' |
Marketable securities-current | 1 | 4 | ' |
Investments in Reserve Yield Plus Fund | 0 | 0 | ' |
Marketable debt securities-noncurrent | 23 | 2 | ' |
Investments | 24 | 6 | ' |
Recurring basis | Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' | ' |
Marketable securities-current | 0 | 0 | ' |
Investments in Reserve Yield Plus Fund | 2 | 2 | ' |
Marketable debt securities-noncurrent | 38 | 11 | ' |
Investments | 40 | 13 | ' |
Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' | ' |
Marketable securities-current | 0 | 0 | ' |
Investments in Reserve Yield Plus Fund | 0 | 0 | ' |
Marketable debt securities-noncurrent | 1 | 1 | ' |
Investments | 1 | 1 | ' |
Non-recurring basis | ' | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' | ' |
Long-lived assets held and used | 44 | ' | ' |
Non-recurring basis | Significant Other Observable Inputs (Level 2) | ' | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' | ' |
Long-lived assets held and used | $44 | ' | ' |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
Oct. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | item | ||
Business Acquisition | ' | ' | ' | ' |
Increase in goodwill due to adjustments to purchase price | ' | ' | $5,000,000 | ' |
Preliminary purchase price allocation | ' | ' | ' | ' |
Goodwill | ' | 3,042,000,000 | 3,042,000,000 | 916,000,000 |
Transaction costs related to prospective and closed acquisitions | ' | ' | 52,000,000 | 6,000,000 |
Vanguard | ' | ' | ' | ' |
Business Acquisition | ' | ' | ' | ' |
Business acquisition share price (in dollars per share) | $21 | ' | ' | ' |
Number of hospitals | 28 | 28 | 28 | ' |
Number of hospitals under construction | 1 | 1 | 1 | ' |
Number of outpatient centers | 39 | 39 | 39 | ' |
Number of health plans | 5 | 5 | 5 | ' |
Number of members covered under the health plans | 140,000 | ' | ' | ' |
Cash paid | 4,300,000,000 | ' | ' | ' |
Assumed debt | 2,500,000,000 | ' | ' | ' |
Preliminary purchase price allocation | ' | ' | ' | ' |
Current assets | 1,054,000,000 | ' | ' | ' |
Property and equipment | 3,074,000,000 | ' | ' | ' |
Other intangible assets | 108,000,000 | ' | ' | ' |
Goodwill | 1,936,000,000 | ' | ' | ' |
Investments and other assets | 82,000,000 | ' | ' | ' |
Other long-term assets | 118,000,000 | ' | ' | ' |
Current liabilities | -1,012,000,000 | ' | ' | ' |
Deferred tax liabilities | -161,000,000 | ' | ' | ' |
Long-term liabilities | -3,726,000,000 | ' | ' | ' |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | -165,000,000 | ' | ' | ' |
Noncontrolling interests | -7,000,000 | ' | ' | ' |
Net cash paid | 1,301,000,000 | ' | ' | ' |
Pro forma financial information | ' | ' | ' | ' |
Net operating revenues | ' | ' | 15,650,000,000 | 15,140,000,000 |
Income (loss) from continuing operations , before income taxes | ' | ' | -294,000,000 | 294,000,000 |
Ambulatory Surgery Centers | ' | ' | ' | ' |
Business Acquisition | ' | ' | ' | ' |
Number of business acquisitions | ' | ' | 11 | 9 |
Other ambulatory Surgery Centers | ' | ' | ' | ' |
Business Acquisition | ' | ' | ' | ' |
Number of business acquisitions | ' | ' | 1 | 1 |
Physician Practice Entity | ' | ' | ' | ' |
Business Acquisition | ' | ' | ' | ' |
Number of business acquisitions | ' | ' | ' | 20 |
Other diagnostic imaging center | ' | ' | ' | ' |
Business Acquisition | ' | ' | ' | ' |
Number of business acquisitions | ' | ' | ' | 1 |
Series of individual business acquisition | ' | ' | ' | ' |
Business Acquisition | ' | ' | ' | ' |
Cash paid | ' | ' | 0 | ' |
Preliminary purchase price allocation | ' | ' | ' | ' |
Current assets | ' | 1,058,000,000 | 1,058,000,000 | 19,000,000 |
Property and equipment | ' | 3,134,000,000 | 3,134,000,000 | 24,000,000 |
Other intangible assets | ' | 166,000,000 | 166,000,000 | 53,000,000 |
Goodwill | ' | 2,121,000,000 | 2,121,000,000 | 182,000,000 |
Investments and other assets | ' | 83,000,000 | 83,000,000 | 0 |
Other long-term assets | ' | 126,000,000 | 126,000,000 | 0 |
Current liabilities | ' | -1,024,000,000 | -1,024,000,000 | -23,000,000 |
Deferred tax liabilities | ' | -174,000,000 | -174,000,000 | 0 |
Long-term liabilities | ' | -3,741,000,000 | -3,741,000,000 | -7,000,000 |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | -175,000,000 | -175,000,000 | 0 |
Noncontrolling interests | ' | -49,000,000 | -49,000,000 | -37,000,000 |
Net cash paid | ' | ' | 1,515,000,000 | 211,000,000 |
Gain on business combination | ' | ' | $10,000,000 | $0 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | Hospital Operations and other | Hospital Operations and other | Hospital Operations and other | Conifer | Conifer | Conifer | Conifer | Operating segments | Operating segments | Operating segments | Operating segments | Operating segments | Operating segments | Operating segments | Operating segments | Operating segments | Operating segments | Operating segments | Operating segments | Intercompany eliminations | Intercompany eliminations | Intercompany eliminations | |||
segment | Minimum | Hospital Operations and other | Hospital Operations and other | Hospital Operations and other | Conifer | Conifer | Conifer | Conifer | Conifer | Conifer | |||||||||||||||
item | Tenet | Tenet | Tenet | Other customers | Other customers | Other customers | |||||||||||||||||||
SEGMENT INFORMATION | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of reportable segments | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of hospitals owned by subsidiaries | 77 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of licensed beds in hospitals operated by subsidiaries | 20,293 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of provider-based outpatient centers operated by subsidiaries | 183 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of health plans | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of accountable care networks | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Tenet and non-Tenet Hospitals and other health care organizations to which Conifer provided revenue cycle services | ' | ' | ' | ' | ' | ' | ' | ' | ' | 700 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets | $16,130 | $9,044 | $8,462 | $15,874 | $8,825 | $8,389 | $256 | $219 | $73 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital expenditures: | 691 | 508 | 475 | 670 | 495 | 461 | 21 | 13 | 14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net operating revenues | 11,102 | 9,119 | 8,654 | ' | ' | ' | ' | ' | ' | ' | 11,506 | 9,490 | 8,915 | 10,587 | 9,002 | 8,575 | 404 | 371 | 261 | 515 | 117 | 79 | -404 | -371 | -261 |
Adjusted EBITDA | 1,342 | 1,203 | 1,126 | 1,210 | 1,098 | 1,083 | 132 | 105 | 43 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization | 545 | 430 | 398 | 526 | 420 | 389 | 19 | 10 | 9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjusted EBITDA | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment and restructuring charges, and acquisition-related costs | -103 | -19 | -20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation and investigation costs | -31 | -5 | -55 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | -474 | -412 | -375 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss from early extinguishment of debt | -348 | -4 | -117 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment earnings | 1 | 1 | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income (loss) from continuing operations before income taxes | ($158) | $334 | $164 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SCHEDULE_IIVALUATION_AND_QUALI1
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowance for doubtful accounts | ' | ' | ' |
Movement in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | $401 | $397 | $352 |
Costs and Expenses | 975 | 789 | 721 |
Deductions | -787 | -785 | -676 |
Balance at End of Period | 589 | 401 | 397 |
Valuation allowance for deferred tax assets | ' | ' | ' |
Movement in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | 56 | 61 | 66 |
Costs and Expenses | 23 | -5 | -5 |
Other Accounts | -1 | ' | ' |
Other Items | 29 | ' | ' |
Balance at End of Period | $107 | $56 | $61 |