Exhibit 99.1
Tenet Reports Results for the Fourth Quarter Ended December 31, 2016 and Issues Outlook for 2017
| | • | | Reported a net loss from continuing operations of $187 million or $1.88 per share in 2016 and a net loss from continuing operations of $79 million or $0.79 per share in the fourth quarter. |
| | • | | Adjusted EBITDA was $2.413 billion in 2016 and $613 million in the fourth quarter. Adjusted diluted earnings per share from continuing operations was $1.04 in 2016 and $0.06 in the fourth quarter. |
| | • | | Same-hospital patient revenue grew 3.2% in the fourth quarter and reflects a 3.7% increase in revenue per adjusted admission partially offset by a 0.5% decline in adjusted admissions. Hospital segment Adjusted EBITDA totaled $358 million in the quarter. |
| | • | | Ambulatory Care segment revenue increased 5.9% on a same-facility system-wide basis in the fourth quarter, with cases increasing 1.7% and revenue per case increasing 4.1%. Adjusted EBITDA for the ambulatory segment was $183 million in the fourth quarter, a 15.8% increase, and representing a margin of 38.3%. |
| | • | | Revenue from Conifer Health Solutions increased 4.7% in the fourth quarter with revenue from third parties increasing 16.0%. Conifer generated $72 million of Adjusted EBITDA in the fourth quarter, an 18.0% increase, and representing a margin of 17.9%. |
| | • | | Net cash provided by operating activities during 2016 was $558 million, a $468 million decline when compared to $1.026 billion in 2015, and was primarily impacted by the payment related to the resolution of the Clinica de la Mama matter in the fourth quarter of 2016. Adjusted Free Cash Flow was $380 million in 2016, a $25 million decline when compared to $405 million in 2015. |
| | • | | Issues Outlook for 2017; includes net income from continuing operations attributable to Tenet common shareholders of $105 million to $135 million and Adjusted EBITDA of $2.5 billion to $2.6 billion. |
DALLAS – February 27, 2017 –Tenet Healthcare Corporation (NYSE:THC) reported a net loss from continuing operations of $79 million in the fourth quarter of 2016, a $21 million improvement when compared to a $100 million net loss from continuing operations in the fourth quarter of 2015. Adjusted EBITDA was $613 million in both the fourth quarters of 2016 and 2015.
Trevor Fetter, chairman and chief executive officer, stated, “Demand for higher acuity services in our hospitals drove growth in same-hospital patient revenue and revenue per adjusted admission in the fourth quarter. Our Ambulatory and Conifer Health businesses delivered strong revenue and Adjusted EBITDA growth. Our expectations for continued growth in 2017 reflect confidence in our strategy to strengthen our hospital portfolio, expand our network of ambulatory facilities, and solidify Conifer’s leadership in healthcare business services.”
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Hospital Operations and Other Segment
Net operating revenue in the Hospital Operations and other segment was $4.143 billion, down 6.3 percent from $4.423 billion in the fourth quarter of 2015 due to hospitals that have been divested since that time. On a same-hospital basis, patient revenue increased to $3.782 billion, up 3.2 percent from $3.666 billion in the fourth quarter of 2015. The increase included growth of 3.7 percent in net patient revenue per adjusted admission, offset by a 0.5 percent decrease in adjusted patient admissions.
Adjusted EBITDA in Tenet’s hospital segment was $358 million, representing a decline of 9.1 percent as compared to $394 million in the fourth quarter of 2015. The decline was driven by divestitures in 2015 and 2016 and an expected decrease in electronic health record incentives, and was partially offset by acquisitions in 2015.
Tenet’s health plan business lowered Adjusted EBITDA by $29 million in the fourth quarter of 2016. For the full year, the health plan business lowered Adjusted EBITDA by $37 million, whereas the Company had anticipated at the outset of 2016 that the results for its health plans would be essentially breakeven. As previously announced, the Company has begun the process of selling or otherwise exiting its health plan business.
Total hospital segment selected operating expenses, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 2.8 percent on a per adjusted admission basis in the quarter. Approximatelyone-third of the increase was attributable to an increase in claim costs of Tenet’s health plans due to an increase in covered lives in 2016.
Exchanges
Tenet’s same-hospital exchange admissions were 4,916 in the fourth quarter of 2016, up 13.6 percent from the fourth quarter of 2015. Same-hospital exchange outpatient visits were 48,435 up 26.4 percent from the fourth quarter of 2015.
Uncompensated Care
Tenet’s provision for doubtful accounts was $354 million in the fourth quarter of 2016, representing a ratio of 6.8 percent of revenues before bad debt, as compared to $391 million in the fourth quarter of 2015, or 7.2 percent of revenues before bad debt. Tenet’s uncompensated care costs, defined as the sum of the provision for doubtful accounts, charity care write-offs and uninsured discounts, was $1.332 billion and $1.420 billion in the fourth quarters of 2016 and 2015, respectively, including $978 million and $1.029 billion, respectively, of charity care write-offs and uninsured discounts that were offered through Tenet’s Compact with Uninsured Patients. Uncompensated care in the fourth quarter of 2016 represented 21.5 percent of revenue before bad debts, uninsured discounts and charity care write-offs, down from 22.0 percent in the fourth quarter of 2015. Nearly all of Tenet’s uncompensated care is associated with the Hospital Operations and other segment.
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Uninsured plus charity admissions increased by 444 admissions, or 4.9 percent on a same-hospital basis in the fourth quarter of 2016 compared to the fourth quarter of 2015. Uninsured plus charity outpatient visits decreased by 14,330 visits, or 11.4 percent, on a same-hospital basis.
Ambulatory Care Segment
During the fourth quarter of 2016, the Ambulatory segment produced net operating revenue of $478 million, representing an increase of 20.4 percent as compared to $397 million in the fourth quarter of 2015. In addition, the Ambulatory segment generated Adjusted EBITDA of $183 million, up 15.8 percent from $158 million in the fourth quarter of 2015.
The results of many of the facilities in which the Ambulatory segment has an investment are not consolidated by Tenet. To help analyze the segment’s results of operations, management uses system-wide measures which include revenues and cases of both consolidated and unconsolidated facilities. On a same-facility system-wide basis, revenue in the Ambulatory segment increased 5.9 percent, with cases increasing 1.7 percent and revenue per case increasing 4.1 percent. One less surgical day lowered revenue growth and case growth in the Ambulatory segment by approximately 1.6 percent in the fourth quarter of 2016.
Conifer Segment
During the fourth quarter of 2016, Conifer’s revenue increased 4.7 percent to $402 million, up from $384 million in the fourth quarter of 2015. Revenue from third party customers increased 16.0 percent to $239 million. Conifer generated $72 million of Adjusted EBITDA in the fourth quarter of 2016, up 18.0 percent from $61 million in the fourth quarter of 2015.
Net Income and Earnings Per Share
Tenet reported a net loss from continuing operations of $79 million, or $0.79 per share, in the fourth quarter of 2016 compared to a net loss of $100 million, or $1.01 per share, in the fourth quarter of 2015.
After adjusting for certain items which are listed on Table #2, Tenet generated Adjusted net income from continuing operations of $6 million, or $0.06 per diluted share, during the fourth quarter of 2016, as compared to Adjusted net income from continuing operations of $35 million, or $0.35 per diluted share, in the fourth quarter of 2015.
A reconciliation of GAAP net income available (loss attributable) to Tenet Healthcare Corporation common shareholders to Adjusted net income from continuing operations and Adjusted diluted earnings per share from continuing operations is contained in Table #2 at the end of this release.
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Cash Flow and Liquidity
Cash and cash equivalents were $716 million at December 31, 2016 compared to $649 million at September 30, 2016. On December 1, 2016, the Company completed a private offering of $750 million aggregate principal amount senior secured second lien notes maturing in 2022 (the “notes”). The net proceeds of the notes were used, after payment of fees and expenses, to repay indebtedness outstanding under Tenet’s senior secured revolving credit facility and for general corporate purposes. The Company had no outstanding borrowings on its $1 billion credit line as of December 31, 2016. Accounts receivable days outstanding were 54.8 at December 31, 2016 compared to 52.9 at September 30, 2016 and 49.5 at December 31, 2015.
Net cash provided by operating activities in the twelve months ended December 31, 2016 was $558 million, representing a $468 million decline compared to $1.026 billion in 2015. After subtracting $875 million and $842 million of capital expenditures in the twelve months ended December 31, 2016 and December 31, 2015, respectively, Free Cash Flow was an outflow of $317 million in the twelve months ended December 31, 2016, representing a $501 million decline compared to $184 million in the comparable period in 2015. This decline was primarily attributable to approximately $517 million of payments related to the resolution of the Clinica de la Mama matter, which were made in the fourth quarter of 2016. Adjusted Free Cash Flow was $380 million in the twelve months ended December 31, 2016, representing a $25 million decline from $405 million in the comparable period in 2015. Adjusted Free Cash Flow was below the Company’s Outlook of $400 million to $600 million in 2016, primarily due to an unanticipated increase in accounts receivable days sales outstanding in the fourth quarter of 2016 and an $80 million delay by the State of California in processing Provider Fee program payments.
Net cash used in investing activities was $430 million in the twelve months ended December 31, 2016 compared to $1.317 billion of net cash used in investing activities in the comparable period in 2015. Net cash provided by financing activities was $232 million in the twelve months ended December 31, 2016 compared to $454 million of net cash provided by financing activities in the comparable period in 2015.
Reconciliations of net cash provided by operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.
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Outlook
The Company’s Outlook for 2017 includes:
| | • | | Revenue of $19.7 billion to $20.1 billion, |
| | • | | Net income from continuing operations attributable to Tenet common shareholders of $107 million to $133 million, |
| | • | | Adjusted EBITDA of $2.5 billion to $2.6 billion, |
| | • | | Net cash provided by operating activities of $1.300 billion to $1.550 billion, |
| | • | | Adjusted Free Cash Flow of $600 million to $800 million, and |
| | • | | Diluted earnings per share and adjusted diluted earnings per share from continuing operations of $1.05 to $1.30 per diluted share. |
The Outlook for 2017 assumes equity in earnings of unconsolidated affiliates of $145 million to $155 million, electronic health record incentives of $8 million to $10 million, net income attributable to noncontrolling interests of $390 million to $410 million and an average diluted share count of 102 million. In addition, the Outlook assumes that CMS will approve the proposed California Provider Fee for the30-month period from January 2017 through June 2019 during the fourth quarter of 2017 and further assumes that the Company will record approximately $220 million to $230 million of revenue and Adjusted EBITDA during 2017 as a result of this program. In 2016, the Company recorded $232 million of revenue under the California Provider Fee program. The Company will not be able to recognize any revenue under the 2017 program during the year until CMS approves the program. Finally, the Outlook includes a full year of financial results from hospitals which may be divested in 2017 and the Adjusted EBITDA Outlook excludes approximately $30 million of losses in 2017 that the Company expects to incur in its health plan business.
The Company’s Outlook for the first quarter of 2017 includes:
| | • | | Revenue of $4.750 billion to $4.950 billion, |
| | • | | Net loss from continuing operations attributable to Tenet common shareholders ranging from a loss of $60 million to a loss of $45 million, |
| | • | | Adjusted EBITDA of $475 million to $525 million, and |
| | • | | A loss per basic share and an adjusted loss per basic share from continuing operations ranging from a loss of $0.60 to a loss of $0.45. |
The Outlook for the first quarter assumes equity in earnings of unconsolidated affiliates of approximately $25 million, electronic health record incentives of approximately $1 million, net income attributable to noncontrolling interests of $85 million to $95 million and an average share count of 100 million. The Outlook for the first quarter of 2017 does not include any revenue or Adjusted EBITDA associated with the California Provider Fee program, whereas the Company’s results in the first quarter of 2016 included $57 million of revenue and Adjusted EBITDA associated with the program. This difference is expected to lower the Company’s same-hospital revenue per adjusted admission by approximately 1.5 percent in the first quarter of 2017. In addition, the Company’s Adjusted EBITDA in the first quarter of 2016 included approximately $25 million from its hospitals in Georgia, which were divested on March 31, 2016.
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Additional details on Tenet’s Outlook for both the first quarter and calendar year 2017 are available in Tables 4 and 5 at the end of this press release and in an accompanying slide presentation that is accessible through the Company’s website atwww.tenethealth.com/investors.
Management’s Webcast Discussion of Fourth Quarter Results
Tenet management will discuss the Company’s fourth quarter 2016 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 28, 2017. Investors can access the webcast through Tenet’s website atwww.tenethealth.com/investors. A set of slides, which will be referred to on the conference call, is available on the Quarterly Results section of the Company’s website.
Additional information regarding Tenet’s quarterly results of operations is contained in its Form10-K report for the twelve months ended December 31, 2016, which will be filed with the Securities and Exchange Commission and posted on the Tenet website before the webcast. This press release includes certainnon-GAAP measures, such as Adjusted EBITDA, Adjusted net income from continuing operations, Adjusted diluted earnings per share from continuing operations, Free Cash Flow and Adjusted Free Cash Flow. Reconciliations of these measures to the most comparable GAAP measure are contained in the tables at the end of this release.
Tenet Healthcare Corporation is a diversified healthcare services company with 130,000 employees united around a common mission: to help people live happier, healthier lives. Through its subsidiaries, partnerships and joint ventures, including United Surgical Partners International, the Company operates 80 general acute care hospitals, 20 short-stay surgical hospitals and approximately 470 outpatient centers in the United States, as well as nine facilities in the United Kingdom. Tenet’s Conifer Health Solutions subsidiary provides technology-enabled performance improvement and health management solutions to hospitals, health systems, integrated delivery networks, physician groups, self-insured organizations and health plans. For more information, please visitwww.tenethealth.com.
The terms “THC”, “Tenet Healthcare Corporation”, “the Company”, “we”, “us” or “our” refer to Tenet Healthcare Corporation or one or more of its subsidiaries or affiliates as applicable.
###
| | |
Corporate Communications Charles Nicolas 469-893-2640 mediarelations@tenethealth.com | | Investor Relations Brendan Strong 469-893-6992 investorrelations@tenethealth.com |
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This release contains “forward-looking statements” – that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “assume,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, but are not limited to, the factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form10-K for the year ended December 31, 2016 and other filings with the Securities and Exchange Commission.
Tenet uses its Company website to provide important information to investors about the
Company including the posting of important announcements regarding financial
performance and corporate developments.
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TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions except per share amounts) | | Three Months Ended December 31, | |
| | | 2016 | | | % | | | 2015 | | | % | | | Change | |
Net operating revenues: | | | | | | | | | | | | | | | | | | | | |
Net operating revenues before provision for doubtful accounts | | $ | 5,214 | | | | | | | $ | 5,417 | | | | | | | | (3.7 | )% |
Less: Provision for doubtful accounts | | | 354 | | | | | | | | 391 | | | | | | | | (9.5 | )% |
| | | | | | | | | | | | | | | | | | | | |
Net operating revenues | | | 4,860 | | | | 100.0 | % | | | 5,026 | | | | 100.0 | % | | | (3.3 | )% |
Equity in earnings of unconsolidated affiliates | | | 46 | | | | 0.9 | % | | | 51 | | | | 1.0 | % | | | (9.8 | )% |
Operating expenses: | | | | | | | | | | | | | | | | | | | | |
Salaries, wages and benefits | | | 2,324 | | | | 47.8 | % | | | 2,443 | | | | 48.6 | % | | | (4.9 | )% |
Supplies | | | 773 | | | | 15.9 | % | | | 817 | | | | 16.3 | % | | | (5.4 | )% |
Other operating expenses, net | | | 1,205 | | | | 24.8 | % | | | 1,230 | | | | 24.5 | % | | | (2.0 | )% |
Electronic health record incentives | | | (9 | ) | | | (0.2 | )% | | | (26 | ) | | | (0.5 | )% | | | (65.4 | )% |
Depreciation and amortization | | | 218 | | | | 4.5 | % | | | 208 | | | | 4.1 | % | | | | |
Impairment and restructuring charges, and acquisition-related costs | | | 121 | | | | 2.5 | % | | | 52 | | | | 1.0 | % | | | | |
Litigation and investigation costs | | | 2 | | | | — | % | | | 224 | | | | 4.4 | % | | | | |
Gains on sales, consolidation and deconsolidation of facilities | | | — | | | | — | % | | | (186 | ) | | | (3.7 | )% | | | | |
| | | | | | | | | | | | | | | | | | | | |
Operating income | | | 272 | | | | 5.6 | % | | | 315 | | | | 6.3 | % | | | | |
Interest expense | | | (249 | ) | | | | | | | (248 | ) | | | | | | | | |
Loss from early extinguishment of debt | | | — | | | | | | | | (1 | ) | | | | | | | | |
Investment earnings | | | 6 | | | | | | | | 1 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations, before income taxes | | | 29 | | | | | | | | 67 | | | | | | | | | |
Income tax expense | | | (6 | ) | | | | | | | (68 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) from continuing operations, before discontinued operations | | | 23 | | | | | | | | (1 | ) | | | | | | | | |
Discontinued operations: | | | | | | | | | | | | | | | | | | | | |
Net loss from operations | | | (1 | ) | | | | | | | (1 | ) | | | | | | | | |
Litigation and investigation (costs) benefit | | | — | | | | | | | | 5 | | | | | | | | | |
Income tax expense (benefit) | | | 1 | | | | | | | | (1 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income from discontinued operations | | | — | | | | | | | | 3 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income | | | 23 | | | | | | | | 2 | | | | | | | | | |
Less: Net income attributable to noncontrolling interests | | | 102 | | | | | | | | 99 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net loss attributable to Tenet Healthcare Corporation common shareholders | | $ | (79 | ) | | | | | | $ | (97 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders | | | | | | | | | | | | | | | | | | | | |
Net loss from continuing operations, net of tax | | $ | (79 | ) | | | | | | $ | (100 | ) | | | | | | | | |
Net income from discontinued operations, net of tax | | | — | | | | | | | | 3 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net loss attributable to Tenet Healthcare Corporation common shareholders | | $ | (79 | ) | | | | | | $ | (97 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders: | | | | | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | (0.79 | ) | | | | | | $ | (1.01 | ) | | | | | | | | |
Discontinued operations | | | — | | | | | | | | 0.03 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | (0.79 | ) | | | | | | $ | (0.98 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | (0.79 | ) | | | | | | $ | (1.01 | ) | | | | | | | | |
Discontinued operations | | | — | | | | | | | | 0.03 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | (0.79 | ) | | | | | | $ | (0.98 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares and dilutive securities outstanding (in thousands): | | | | | | | | | | | | | | | | | | | | |
Basic | | | 99,651 | | | | | | | | 99,188 | | | | | | | | | |
Diluted* | | | 99,651 | | | | | | | | 99,188 | | | | | | | | | |
| * | Had the Company generated income from continuing operations in the three months ended December 31, 2016 and 2015 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,277 shares and 2,173 shares, respectively. |
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TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions except per share amounts) | | Years Ended December 31, | |
| | | 2016 | | | % | | | 2015 | | | % | | | Change | |
Net operating revenues: | | | | | | | | | | | | | | | | | | | | |
Net operating revenues before provision for doubtful accounts | | $ | 21,070 | | | | | | | $ | 20,111 | | | | | | | | 4.8 | % |
Less: Provision for doubtful accounts | | | 1,449 | | | | | | | | 1,477 | | | | | | | | (1.9 | )% |
| | | | | | | | | | | | | | | | | | | | |
Net operating revenues | | | 19,621 | | | | 100.0 | %�� | | | 18,634 | | | | 100.0 | % | | | 5.3 | % |
Equity in earnings of unconsolidated affiliates | | | 131 | | | | 0.7 | % | | | 99 | | | | 0.5 | % | | | 32.3 | % |
Operating expenses: | | | | | | | | | | | | | | | | | | | | |
Salaries, wages and benefits | | | 9,356 | | | | 47.7 | % | | | 9,011 | | | | 48.4 | % | | | 3.8 | % |
Supplies | | | 3,124 | | | | 15.9 | % | | | 2,963 | | | | 15.9 | % | | | 5.4 | % |
Other operating expenses, net | | | 4,891 | | | | 25.0 | % | | | 4,555 | | | | 24.4 | % | | | 7.4 | % |
Electronic health record incentives | | | (32 | ) | | | (0.2 | )% | | | (72 | ) | | | (0.4 | )% | | | (55.6 | )% |
Depreciation and amortization | | | 850 | | | | 4.3 | % | | | 797 | | | | 4.3 | % | | | | |
Impairment and restructuring charges, and acquisition-related costs | | | 202 | | | | 1.1 | % | | | 318 | | | | 1.7 | % | | | | |
Litigation and investigation costs | | | 293 | | | | 1.5 | % | | | 291 | | | | 1.5 | % | | | | |
Gains on sales, consolidation and deconsolidation of facilities | | | (151 | ) | | | (0.8 | )% | | | (186 | ) | | | (1.0 | )% | | | | |
| | | | | | | | | | | | | | | | | | | | |
Operating income | | | 1,219 | | | | 6.2 | % | | | 1,056 | | | | 5.7 | % | | | | |
Interest expense | | | (979 | ) | | | | | | | (912 | ) | | | | | | | | |
Loss from early extinguishment of debt | | | — | | | | | | | | (1 | ) | | | | | | | | |
Investment earnings | | | 8 | | | | | | | | 1 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations, before income taxes | | | 248 | | | | | | | | 144 | | | | | | | | | |
Income tax expense | | | (67 | ) | | | | | | | (68 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations, before discontinued operations | | | 181 | | | | | | | | 76 | | | | | | | | | |
Discontinued operations: | | | | | | | | | | | | | | | | | | | | |
Loss from operations | | | (6 | ) | | | | | | | (5 | ) | | | | | | | | |
Litigation and investigation (costs) benefit | | | — | | | | | | | | 8 | | | | | | | | | |
Income tax benefit (expense) | | | 1 | | | | | | | | (1 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) from discontinued operations | | | (5 | ) | | | | | | | 2 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income | | | 176 | | | | | | | | 78 | | | | | | | | | |
Less: Net income attributable to noncontrolling interests | | | 368 | | | | | | | | 218 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net loss attributable to Tenet Healthcare Corporation common shareholders | | $ | (192 | ) | | | | | | $ | (140 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Amounts attributable to Tenet Healthcare Corporation common shareholders | | | | | | | | | | | | | | | | | | | | |
Net loss from continuing operations, net of tax | | $ | (187 | ) | | | | | | $ | (142 | ) | | | | | | | | |
Net income (loss) from discontinued operations, net of tax | | | (5 | ) | | | | | | | 2 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net loss attributable to Tenet Healthcare Corporation common shareholders | | $ | (192 | ) | | | | | | $ | (140 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders: | | | | | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | (1.88 | ) | | | | | | $ | (1.43 | ) | | | | | | | | |
Discontinued operations | | | (0.05 | ) | | | | | | | 0.02 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | (1.93 | ) | | | | | | $ | (1.41 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | (1.88 | ) | | | | | | $ | (1.43 | ) | | | | | | | | |
Discontinued operations | | | (0.05 | ) | | | | | | | 0.02 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | (1.93 | ) | | | | | | $ | (1.41 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares and dilutive securities outstanding (in thousands): | | | | | | | | | | | | | | | | | | | | |
Basic | | | 99,321 | | | | | | | | 99,167 | | | | | | | | | |
Diluted* | | | 99,321 | | | | | | | | 99,167 | | | | | | | | | |
| * | Had the Company generated income from continuing operations in the years ended December 31 2016 and 2015 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,421 shares and 2,380 shares, respectively. |
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TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | |
| | | December 31, | | | December 31, | |
| (Dollars in millions) | | 2016 | | | 2015 | |
| ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 716 | | | $ | 356 | |
Accounts receivable, less allowance for doubtful accounts | | | 2,897 | | | | 2,704 | |
Inventories of supplies, at cost | | | 326 | | | | 309 | |
Income tax receivable | | | 4 | | | | 7 | |
Assets held for sale | | | 29 | | | | 550 | |
Other current assets | | | 1,285 | | | | 1,245 | |
| | | | | | | | |
Total current assets | | | 5,257 | | | | 5,171 | |
Investments and other assets | | | 1,250 | | | | 1,175 | |
Deferred income taxes | | | 871 | | | | 776 | |
Property and equipment, at cost, less accumulated depreciation and amortization | | | 8,053 | | | | 7,915 | |
Goodwill | | | 7,425 | | | | 6,970 | |
Other intangible assets, at cost, less accumulated amortization | | | 1,845 | | | | 1,675 | |
| | | | | | | | |
Total assets | | $ | 24,701 | | | $ | 23,682 | |
| | | | | | | | |
| LIABILITIES AND EQUITY | | | | | | | | |
Current liabilities: | | | | | | | | |
Current portion of long-term debt | | $ | 191 | | | $ | 127 | |
Accounts payable | | | 1,329 | | | | 1,380 | |
Accrued compensation and benefits | | | 872 | | | | 880 | |
Professional and general liability reserves | | | 181 | | | | 177 | |
Accrued interest payable | | | 210 | | | | 205 | |
Liabilities held for sale | | | 9 | | | | 101 | |
Accrued legal settlement costs | | | 8 | | | | 294 | |
Other current liabilities | | | 1,234 | | | | 1,144 | |
| | | | | | | | |
Total current liabilities | | | 4,034 | | | | 4,308 | |
Long-term debt, net of current portion | | | 15,064 | | | | 14,383 | |
Professional and general liability reserves | | | 613 | | | | 578 | |
Defined benefit plan obligations | | | 626 | | | | 595 | |
Deferred income taxes | | | 279 | | | | 37 | |
Other long-term liabilities | | | 610 | | | | 557 | |
| | | | | | | | |
Total liabilities | | | 21,226 | | | | 20,458 | |
Commitments and contingencies | | | | | | | | |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | | | 2,393 | | | | 2,266 | |
Equity: | | | | | | | | |
Shareholders’ equity: | | | | | | | | |
Common stock | | | 7 | | | | 7 | |
Additionalpaid-in capital | | | 4,827 | | | | 4,815 | |
Accumulated other comprehensive loss | | | (258 | ) | | | (164 | ) |
Accumulated deficit | | | (1,742 | ) | | | (1,550 | ) |
Common stock in treasury, at cost | | | (2,417 | ) | | | (2,417 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 417 | | | | 691 | |
Noncontrolling interests | | | 665 | | | | 267 | |
| | | | | | | | |
Total equity | | | 1,082 | | | | 958 | |
| | | | | | | | |
Total liabilities and equity | | $ | 24,701 | | | $ | 23,682 | |
| | | | | | | | |
Page 10
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
| | | | | | | | |
| (Dollars in millions) | | Years Ended December 31, | |
| | | 2016 | | | 2015 | |
Net Income | | $ | 176 | | | $ | 78 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
Depreciation and amortization | | | 850 | | | | 797 | |
Provision for doubtful accounts | | | 1,449 | | | | 1,477 | |
Deferred income tax expense | | | 41 | | | | 42 | |
Stock-based compensation expense | | | 68 | | | | 69 | |
Impairment and restructuring charges, and acquisition-related costs | | | 202 | | | | 318 | |
Litigation and investigation costs | | | 293 | | | | 291 | |
Loss from early extinguishment of debt | | | — | | | | 1 | |
Gains on sales, consolidation and deconsolidation of facilities | | | (151 | ) | | | (186 | ) |
Equity in earnings of unconsolidated affiliates, net of distributions received | | | (13 | ) | | | (99 | ) |
Amortization of debt discount and debt issuance costs | | | 41 | | | | 41 | |
Pre-tax (income) loss from discontinued operations | | | 6 | | | | (3 | ) |
Other items, net | | | (1 | ) | | | 59 | |
Changes in cash from operating assets and liabilities: | | | | | | | | |
Accounts receivable | | | (1,604 | ) | | | (1,632 | ) |
Inventories and other current assets | | | (83 | ) | | | (130 | ) |
Income taxes | | | (8 | ) | | | 18 | |
Accounts payable, accrued expenses and other current liabilities | | | (51 | ) | | | 68 | |
Other long-term liabilities | | | 40 | | | | 38 | |
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | | | (691 | ) | | | (200 | ) |
Net cash used in operating activities from discontinued operations, excluding income taxes | | | (6 | ) | | | (21 | ) |
| | | | | | | | |
Net cash provided by operating activities | | | 558 | | | | 1,026 | |
Cash flows from investing activities: | | | | | | | | |
Purchases of property and equipment — continuing operations | | | (875 | ) | | | (842 | ) |
Purchases of businesses or joint venture interests, net of cash acquired | | | (117 | ) | | | (940 | ) |
Proceeds from sales of facilities and other assets | | | 573 | | | | 549 | |
Proceeds from sales of marketable securities, long-term investments and other assets | | | 62 | | | | 60 | |
Purchases of equity investments | | | (39 | ) | | | (134 | ) |
Other assets | | | (31 | ) | | | (4 | ) |
Other items, net | | | (3 | ) | | | (6 | ) |
| | | | | | | | |
Net cash used in investing activities | | | (430 | ) | | | (1,317 | ) |
Cash flows from financing activities: | | | | | | | | |
Repayments of borrowings under credit facility | | | (1,895 | ) | | | (2,815 | ) |
Proceeds from borrowings under credit facility | | | 1,895 | | | | 2,595 | |
Repayments of other borrowings | | | (154 | ) | | | (2,049 | ) |
Proceeds from other borrowings | | | 760 | | | | 3,158 | |
Repurchases of common stock | | | — | | | | (40 | ) |
Debt issuance costs | | | (12 | ) | | | (80 | ) |
Distributions paid to noncontrolling interests | | | (218 | ) | | | (110 | ) |
Proceeds from sale of noncontrolling interests | | | 22 | | | | 11 | |
Purchase of noncontrolling interests | | | (186 | ) | | | (268 | ) |
Proceeds from exercise of stock options | | | 4 | | | | 15 | |
Other items, net | | | 16 | | | | 37 | |
| | | | | | | | |
Net cash provided by financing activities | | | 232 | | | | 454 | |
| | | | | | | | |
Net increase in cash and cash equivalents | | | 360 | | | | 163 | |
Cash and cash equivalents at beginning of period | | | 356 | | | | 193 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 716 | | | $ | 356 | |
| | | | | | | | |
Supplemental disclosures: | | | | | | | | |
Interest paid, net of capitalized interest | | $ | (932 | ) | | $ | (859 | ) |
Income tax payments, net | | $ | (33 | ) | | $ | (7 | ) |
Page 11
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in millions except per patient day, per admission, per adjusted admission | | Three Months Ended December 31, | | | | | | Years Ended December 31, | | | | |
| and per visit amounts) | | 2016 | | | 2015 | | | Change | | | | | | 2016 | | | 2015 | | | Change | | | | |
Admissions, Patient Days and Surgeries | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of hospitals (at end of period) | | | 75 | | | | 86 | | | | (11 | ) | | | * | | | | 75 | | | | 86 | | | | (11 | ) | | | * | |
Total admissions | | | 192,104 | | | | 211,991 | | | | (9.4 | )% | | | | | | | 792,143 | | | | 824,102 | | | | (3.9 | )% | | | | |
Adjusted patient admissions | | | 338,929 | | | | 371,994 | | | | (8.9 | )% | | | | | | | 1,389,768 | | | | 1,422,588 | | | | (2.3 | )% | | | | |
Paying admissions (excludes charity and uninsured) | | | 181,617 | | | | 200,462 | | | | (9.4 | )% | | | | | | | 749,634 | | | | 779,766 | | | | (3.9 | )% | | | | |
Charity and uninsured admissions | | | 10,487 | | | | 11,529 | | | | (9.0 | )% | | | | | | | 42,509 | | | | 44,336 | | | | (4.1 | )% | | | | |
Admissions through emergency department | | | 120,549 | | | | 133,108 | | | | (9.4 | )% | | | | | | | 499,335 | | | | 521,272 | | | | (4.2 | )% | | | | |
Paying admissions as a percentage of total admissions | | | 94.5 | % | | | 94.6 | % | | | (0.1 | )% | | | * | | | | 94.6 | % | | | 94.6 | % | | | — | % | | | * | |
Charity and uninsured admissions as a percentage of total admissions | | | 5.5 | % | | | 5.4 | % | | | 0.1 | % | | | * | | | | 5.4 | % | | | 5.4 | % | | | — | % | | | * | |
Emergency department admissions as a percentage of total admissions | | | 62.8 | % | | | 62.8 | % | | | — | % | | | * | | | | 63.0 | % | | | 63.3 | % | | | (0.3 | )% | | | * | |
Surgeries — inpatient | | | 53,071 | | | | 58,894 | | | | (9.9 | )% | | | | | | | 217,906 | | | | 223,863 | | | | (2.7 | )% | | | | |
Surgeries — outpatient | | | 73,678 | | | | 79,370 | | | | (7.2 | )% | | | | | | | 298,974 | | | | 293,264 | | | | 1.9 | % | | | | |
Total surgeries | | | 126,749 | | | | 138,264 | | | | (8.3 | )% | | | | | | | 516,880 | | | | 517,127 | | | | — | % | | | | |
Patient days — total | | | 888,185 | | | | 983,856 | | | | (9.7 | )% | | | | | | | 3,690,335 | | | | 3,817,572 | | | | (3.3 | )% | | | | |
Adjusted patient days | | | 1,543,490 | | | | 1,710,620 | | | | (9.8 | )% | | | | | | | 6,395,025 | | | | 6,520,289 | | | | (1.9 | )% | | | | |
Average length of stay (days) | | | 4.62 | | | | 4.64 | | | | (0.4 | )% | | | | | | | 4.66 | | | | 4.63 | | | | 0.6 | % | | | | |
Licensed beds (at end of period) | | | 20,354 | | | | 22,525 | | | | (9.6 | )% | | | | | | | 20,354 | | | | 22,525 | | | | (9.6 | )% | | | | |
Average licensed beds | | | 20,326 | | | | 22,549 | | | | (9.9 | )% | | | | | | | 20,651 | | | | 21,092 | | | | (2.1 | )% | | | | |
Utilization of licensed beds | | | 47.5 | % | | | 47.4 | % | | | 0.1 | % | | | * | | | | 48.8 | % | | | 49.6 | % | | | (0.8 | )% | | | * | |
Outpatient Visits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total visits | | | 1,950,549 | | | | 2,198,005 | | | | (11.3 | )% | | | | | | | 8,144,473 | | | | 8,332,139 | | | | (2.3 | )% | | | | |
Paying visits (excludes charity and uninsured) | | | 1,834,844 | | | | 2,024,725 | | | | (9.4 | )% | | | | | | | 7,577,799 | | | | 7,669,971 | | | | (1.2 | )% | | | | |
Charity and uninsured visits | | | 115,705 | | | | 173,280 | | | | (33.2 | )% | | | | | | | 566,674 | | | | 662,168 | | | | (14.4 | )% | | | | |
Emergency department visits | | | 701,100 | | | | 778,148 | | | | (9.9 | )% | | | | | | | 2,914,421 | | | | 3,010,625 | | | | (3.2 | )% | | | | |
Paying visits as a percentage of total visits | | | 94.1 | % | | | 92.1 | % | | | 2.0 | % | | | * | | | | 93.0 | % | | | 92.1 | % | | | 0.9 | % | | | * | |
Charity and uninsured visits as a percentage of total visits | | | 5.9 | % | | | 7.9 | % | | | (2.0 | )% | | | * | | | | 7.0 | % | | | 7.9 | % | | | (0.9 | )% | | | * | |
Total emergency department admissions and visits | | | 821,649 | | | | 911,256 | | | | (9.8 | )% | | | | | | | 3,413,756 | | | | 3,531,897 | | | | (3.3 | )% | | | | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenues | | $ | 2,606 | | | $ | 2,736 | | | | (4.8 | )% | | | | | | $ | 10,619 | | | $ | 10,652 | | | | (0.3 | )% | | | | |
Net outpatient revenues | | $ | 1,457 | | | $ | 1,616 | | | | (9.8 | )% | | | | | | $ | 5,848 | | | $ | 6,027 | | | | (3.0 | )% | | | | |
Revenues on a Per Admission, Per Patient Day and Per Visit Basis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenue per admission | | $ | 13,566 | | | $ | 12,906 | | | | 5.1 | % | | | | | | $ | 13,405 | | | $ | 12,926 | | | | 3.7 | % | | | | |
Net inpatient revenue per patient day | | $ | 2,934 | | | $ | 2,781 | | | | 5.5 | % | | | | | | $ | 2,878 | | | $ | 2,790 | | | | 3.2 | % | | | | |
Net outpatient revenue per visit | | $ | 747 | | | $ | 735 | | | | 1.6 | % | | | | | | $ | 718 | | | $ | 723 | | | | (0.7 | )% | | | | |
Net patient revenue per adjusted patient admission | | $ | 11,988 | | | $ | 11,699 | | | | 2.5 | % | | | | | | $ | 11,849 | | | $ | 11,724 | | | | 1.1 | % | | | | |
Net patient revenue per adjusted patient day | | $ | 2,632 | | | $ | 2,544 | | | | 3.5 | % | | | | | | $ | 2,575 | | | $ | 2,558 | | | | 0.7 | % | | | | |
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission | | $ | 10,743 | | | $ | 10,451 | | | | 2.8 | % | | | | | | $ | 10,651 | | | $ | 10,351 | | | | 2.9 | % | | | | |
Net Patient Revenues from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Medicare | | | 20.4 | % | | | 19.3 | % | | | 1.1 | % | | | * | | | | 20.5 | % | | | 20.4 | % | | | 0.1 | % | | | * | |
Medicaid | | | 8.2 | % | | | 8.2 | % | | | — | % | | | * | | | | 8.2 | % | | | 8.7 | % | | | (0.5 | )% | | | * | |
Managed care | | | 61.4 | % | | | 61.6 | % | | | (0.2 | )% | | | * | | | | 61.5 | % | | | 60.6 | % | | | 0.9 | % | | | * | |
Indemnity,self-pay and other | | | 10.0 | % | | | 10.9 | % | | | (0.9 | )% | | | * | | | | 9.8 | % | | | 10.3 | % | | | (0.5 | )% | | | * | |
| (1) | Represents the consolidated results of Tenet’s Hospital Operations and other segment. |
| * | This change is the difference between the 2016 and 2015 amounts shown |
Page 12
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in millions except per patient day, per admission, per adjusted admission | | Three Months Ended December 31, | | | | | | Years Ended December 31, | | | | |
| and per visit amounts) | | 2016 | | | 2015 | | | Change | | | | | | 2016 | | | 2015 | | | Change | | | | |
Admissions, Patient Days and Surgeries | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of hospitals (at end of period) | | | 67 | | | | 67 | | | | — | | | | * | | | | 67 | | | | 67 | | | | — | | | | * | |
Total admissions | | | 175,672 | | | | 176,051 | | | | (0.2 | )% | | | | | | | 715,502 | | | | 717,218 | | | | (0.2 | )% | | | | |
Adjusted patient admissions | | | 303,912 | | | | 305,436 | | | | (0.5 | )% | | | | | | | 1,239,324 | | | | 1,228,039 | | | | 0.9 | % | | | | |
Paying admissions (excludes charity and uninsured) | | | 166,139 | | | | 166,962 | | | | (0.5 | )% | | | | | | | 677,361 | | | | 680,837 | | | | (0.5 | )% | | | | |
Charity and uninsured admissions | | | 9,533 | | | | 9,089 | | | | 4.9 | % | | | | | | | 38,141 | | | | 36,381 | | | | 4.8 | % | | | | |
Admissions through emergency department | | | 110,674 | | | | 110,291 | | | | 0.3 | % | | | | | | | 451,785 | | | | 452,593 | | | | (0.2 | )% | | | | |
Paying admissions as a percentage of total admissions | | | 94.6 | % | | | 94.8 | % | | | (0.2 | )% | | | * | | | | 94.7 | % | | | 94.9 | % | | | (0.2 | )% | | | * | |
Charity and uninsured admissions as a percentage of total admissions | | | 5.4 | % | | | 5.2 | % | | | 0.2 | % | | | * | | | | 5.3 | % | | | 5.1 | % | | | 0.2 | % | | | * | |
Emergency department admissions as a percentage of total admissions | | | 63.0 | % | | | 62.6 | % | | | 0.4 | % | | | * | | | | 63.1 | % | | | 63.1 | % | | | — | % | | | * | |
Surgeries — inpatient | | | 48,264 | | | | 49,239 | | | | (2.0 | )% | | | | | | | 195,641 | | | | 196,352 | | | | (0.4 | )% | | | | |
Surgeries — outpatient | | | 64,053 | | | | 65,046 | | | | (1.5 | )% | | | | | | | 256,301 | | | | 254,932 | | | | 0.5 | % | | | | |
Total surgeries | | | 112,317 | | | | 114,285 | | | | (1.7 | )% | | | | | | | 451,942 | | | | 451,284 | | | | 0.1 | % | | | | |
Patient days — total | | | 798,205 | | | | 803,037 | | | | (0.6 | )% | | | | | | | 3,269,558 | | | | 3,286,026 | | | | (0.5 | )% | | | | |
Adjusted patient days | | | 1,370,960 | | | | 1,379,612 | | | | (0.6 | )% | | | | | | | 5,612,240 | | | | 5,567,041 | | | | 0.8 | % | | | | |
Average length of stay (days) | | | 4.54 | | | | 4.56 | | | | (0.4 | )% | | | | | | | 4.57 | | | | 4.58 | | | | (0.2 | )% | | | | |
Licensed beds (at end of period) | | | 18,118 | | | | 18,130 | | | | (0.1 | )% | | | | | | | 18,118 | | | | 18,130 | | | | (0.1 | )% | | | | |
Average licensed beds | | | 18,090 | | | | 18,154 | | | | (0.4 | )% | | | | | | | 18,127 | | | | 18,217 | | | | (0.5 | )% | | | | |
Utilization of licensed beds | | | 48.0 | % | | | 48.1 | % | | | (0.1 | )% | | | * | | | | 49.4 | % | | | 49.4 | % | | | — | % | | | * | |
Outpatient Visits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total visits | | | 1,782,614 | | | | 1,806,125 | | | | (1.3 | )% | | | | | | | 7,273,671 | | | | 7,176,650 | | | | 1.4 | % | | | | |
Paying visits (excludes charity and uninsured) | | | 1,671,428 | | | | 1,680,609 | | | | (0.5 | )% | | | | | | | 6,784,173 | | | | 6,670,711 | | | | 1.7 | % | | | | |
Charity and uninsured visits | | | 111,186 | | | | 125,516 | | | | (11.4 | )% | | | | | | | 489,498 | | | | 505,939 | | | | (3.2 | )% | | | | |
Emergency department visits | | | 620,622 | | | | 626,280 | | | | (0.9 | )% | | | | | | | 2,560,308 | | | | 2,520,481 | | | | 1.6 | % | | | | |
Paying visits as a percentage of total visits | | | 93.8 | % | | | 93.1 | % | | | 0.7 | % | | | * | | | | 93.3 | % | | | 93.0 | % | | | 0.3 | % | | | * | |
Charity and uninsured visits as a percentage of total visits | | | 6.2 | % | | | 6.9 | % | | | (0.7 | )% | | | * | | | | 6.7 | % | | | 7.0 | % | | | (0.3 | )% | | | * | |
Total emergency department admissions and visits | | | 731,296 | | | | 736,571 | | | | (0.7 | )% | | | | | | | 3,012,093 | | | | 2,973,074 | | | | 1.3 | % | | | | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenues | | $ | 2,442 | | | $ | 2,358 | | | | 3.6 | % | | | | | | $ | 9,776 | | | $ | 9,334 | | | | 4.7 | % | | | | |
Net outpatient revenues | | $ | 1,340 | | | $ | 1,308 | | | | 2.4 | % | | | | | | $ | 5,347 | | | $ | 5,103 | | | | 4.8 | % | | | | |
Revenues on a Per Admission, Per Patient Day and Per Visit Basis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenue per admission | | $ | 13,901 | | | $ | 13,394 | | | | 3.8 | % | | | | | | $ | 13,663 | | | $ | 13,014 | | | | 5.0 | % | | | | |
Net inpatient revenue per patient day | | $ | 3,059 | | | $ | 2,936 | | | | 4.2 | % | | | | | | $ | 2,990 | | | $ | 2,841 | | | | 5.2 | % | | | | |
Net outpatient revenue per visit | | $ | 752 | | | $ | 724 | | | | 3.9 | % | | | | | | $ | 735 | | | $ | 711 | | | | 3.4 | % | | | | |
Net patient revenue per adjusted patient admission | | $ | 12,444 | | | $ | 12,003 | | | | 3.7 | % | | | | | | $ | 12,203 | | | $ | 11,756 | | | | 3.8 | % | | | | |
Net patient revenue per adjusted patient day | | $ | 2,759 | | | $ | 2,657 | | | | 3.8 | % | | | | | | $ | 2,695 | | | $ | 2,593 | | | | 3.9 | % | | | | |
Net Patient Revenues from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Medicare | | | 19.9 | % | | | 19.9 | % | | | — | % | | | * | | | | 20.1 | % | | | 20.7 | % | | | (0.6 | )% | | | * | |
Medicaid | | | 8.1 | % | | | 8.3 | % | | | (0.2 | )% | | | * | | | | 8.2 | % | | | 8.7 | % | | | (0.5 | )% | | | * | |
Managed care | | | 61.4 | % | | | 61.8 | % | | | (0.4 | )% | | | * | | | | 61.7 | % | | | 61.1 | % | | | 0.6 | % | | | * | |
Indemnity,self-pay and other | | | 10.6 | % | | | 10.0 | % | | | 0.6 | % | | | * | | | | 10.0 | % | | | 9.5 | % | | | 0.5 | % | | | * | |
| (1) | Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 67 hospitals operated throughout the years ended December 31, 2016 and 2015, associated outpatient facilities and excludes the results of eight hospitals that Tenet acquired, as well as hospitals Tenet divested, since January 1, 2015. |
| * | This change is the difference between the 2016 and 2015 amounts shown |
Page 13
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions except per share amounts) | | Three Months Ended | | | Year Ended | |
| | | 3/31/2016 | | | 6/30/2016 | | | 9/30/2016 | | | 12/31/2016 | | | 12/31/2016 | |
Net operating revenues: | | | | | | | | | | | | | | | | | | | | |
Net operating revenues before provision for doubtful accounts | | $ | 5,420 | | | $ | 5,220 | | | $ | 5,216 | | | $ | 5,214 | | | $ | 21,070 | |
Less: Provision for doubtful accounts | | | 376 | | | | 352 | | | | 367 | | | | 354 | | | | 1,449 | |
| | | | | | | | | | | | | | | | | | | | |
Net operating revenues | | | 5,044 | | | | 4,868 | | | | 4,849 | | | | 4,860 | | | | 19,621 | |
Equity in earnings of unconsolidated affiliates | | | 24 | | | | 30 | | | | 31 | | | | 46 | | | | 131 | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | |
Salaries, wages and benefits | | | 2,402 | | | | 2,316 | | | | 2,314 | | | | 2,324 | | | | 9,356 | |
Supplies | | | 811 | | | | 773 | | | | 767 | | | | 773 | | | | 3,124 | |
Other operating expenses, net | | | 1,242 | | | | 1,213 | | | | 1,231 | | | | 1,205 | | | | 4,891 | |
Electronic health record incentives | | | — | | | | (21 | ) | | | (2 | ) | | | (9 | ) | | | (32 | ) |
Depreciation and amortization | | | 212 | | | | 215 | | | | 205 | | | | 218 | | | | 850 | |
Impairment and restructuring charges, and acquisition-related costs | | | 28 | | | | 22 | | | | 31 | | | | 121 | | | | 202 | |
Litigation and investigation costs | | | 173 | | | | 114 | | | | 4 | | | | 2 | | | | 293 | |
Gains on sales, consolidation and deconsolidation of facilities | | | (147 | ) | | | (1 | ) | | | (3 | ) | | | — | | | | (151 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income | | | 347 | | | | 267 | | | | 333 | | | | 272 | | | | 1,219 | |
Interest expense | | | (243 | ) | | | (244 | ) | | | (243 | ) | | | (249 | ) | | | (979 | ) |
Investment earnings (loss) | | | 1 | | | | 2 | | | | (1 | ) | | | 6 | | | | 8 | |
| | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations, before income taxes | | | 105 | | | | 25 | | | | 89 | | | | 29 | | | | 248 | |
Income tax benefit (expense) | | | (67 | ) | | | 16 | | | | (10 | ) | | | (6 | ) | | | (67 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations, before discontinued operations | | | 38 | | | | 41 | | | | 79 | | | | 23 | | | | 181 | |
Discontinued operations: | | | | | | | | | | | | | | | | | | | | |
Income (loss) from operations | | | (5 | ) | | | (2 | ) | | | 2 | | | | (1 | ) | | | (6 | ) |
Income tax benefit (expense) | | | 1 | | | | — | | | | (1 | ) | | | 1 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | |
Net Income (loss) from discontinued operations | | | (4 | ) | | | (2 | ) | | | 1 | | | | — | | | | (5 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income | | | 34 | | | | 39 | | | | 80 | | | | 23 | | | | 176 | |
Less: Net income attributable to noncontrolling interests | | | 93 | | | | 85 | | | | 88 | | | | 102 | | | | 368 | |
| | | | | | | | | | | | | | | | | | | | |
Net loss attributable to Tenet Healthcare Corporation common shareholders | | $ | (59 | ) | | $ | (46 | ) | | $ | (8 | ) | | $ | (79 | ) | | $ | (192 | ) |
| | | | | | | | | | | | | | | | | | | | |
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders | | | | | | | | | | | | | | | | | | | | |
Net loss from continuing operations, net of tax | | $ | (55 | ) | | $ | (44 | ) | | $ | (9 | ) | | $ | (79 | ) | | $ | (187 | ) |
Net income (loss) from discontinued operations, net of tax | | | (4 | ) | | | (2 | ) | | | 1 | | | | — | | | | (5 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loss attributable to Tenet Healthcare Corporation common shareholders | | $ | (59 | ) | | $ | (46 | ) | | $ | (8 | ) | | $ | (79 | ) | | $ | (192 | ) |
| | | | | | | | | | | | | | | | | | | | |
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders: | | | | | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | (0.56 | ) | | $ | (0.44 | ) | | $ | (0.09 | ) | | $ | (0.79 | ) | | $ | (1.88 | ) |
Discontinued operations | | | (0.04 | ) | | | (0.02 | ) | | | 0.01 | | | | — | | | | (0.05 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | $ | (0.60 | ) | | $ | (0.46 | ) | | $ | (0.08 | ) | | $ | (0.79 | ) | | $ | (1.93 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | (0.56 | ) | | $ | (0.44 | ) | | $ | (0.09 | ) | | $ | (0.79 | ) | | $ | (1.88 | ) |
Discontinued operations | | | (0.04 | ) | | | (0.02 | ) | | | 0.01 | | | | — | | | | (0.05 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | $ | (0.60 | ) | | $ | (0.46 | ) | | $ | (0.08 | ) | | $ | (0.79 | ) | | $ | (1.93 | ) |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares and dilutive securities outstanding (in thousands): | | | | | | | | | | | | | | | | | | | | |
Basic | | | 98,768 | | | | 99,341 | | | | 99,523 | | | | 99,651 | | | | 99,321 | |
Diluted | | | 98,768 | | | | 99,341 | | | | 99,523 | | | | 99,651 | | | | 99,321 | |
Page 14
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
(Dollars in millions except per patient day, per admission, per adjusted admission | | Three Months Ended | | | Year Ended | |
| and per visit amounts) | | 3/31/2016 | | | 6/30/2016 | | | 9/30/2016 | | | 12/31/2016 | | | 12/31/2016 | |
Admissions, Patient Days and Surgeries | | | | | | | | | | | | | | | | | | | | |
Number of hospitals (at end of period) | | | 80 | | | | 75 | | | | 75 | | | | 75 | | | | 75 | |
Total admissions | | | 211,799 | | | | 193,898 | | | | 194,342 | | | | 192,104 | | | | 792,143 | |
Adjusted patient admissions | | | 362,819 | | | | 342,813 | | | | 345,207 | | �� | | 338,929 | | | | 1,389,768 | |
Paying admissions (excludes charity and uninsured) | | | 201,436 | | | | 183,539 | | | | 183,042 | | | | 181,617 | | | | 749,634 | |
Charity and uninsured admissions | | | 10,363 | | | | 10,359 | | | | 11,300 | | | | 10,487 | | | | 42,509 | |
Admissions through emergency department | | | 136,056 | | | | 122,283 | | | | 120,447 | | | | 120,549 | | | | 499,335 | |
Paying admissions as a percentage of total admissions | | | 95.1 | % | | | 94.7 | % | | | 94.2 | % | | | 94.5 | % | | | 94.6 | % |
Charity and uninsured admissions as a percentage of total admissions | | | 4.9 | % | | | 5.3 | % | | | 5.8 | % | | | 5.5 | % | | | 5.4 | % |
Emergency department admissions as a percentage of total admissions | | | 64.2 | % | | | 63.1 | % | | | 62.0 | % | | | 62.8 | % | | | 63.0 | % |
Surgeries — inpatient | | | 55,755 | | | | 54,379 | | | | 54,701 | | | | 53,071 | | | | 217,906 | |
Surgeries — outpatient | | | 76,829 | | | | 75,821 | | | | 72,646 | | | | 73,678 | | | | 298,974 | |
Total surgeries | | | 132,584 | | | | 130,201 | | | | 127,346 | | | | 126,749 | | | | 516,880 | |
Patient days — total | | | 1,010,514 | | | | 897,313 | | | | 894,323 | | | | 888,185 | | | | 3,690,335 | |
Adjusted patient days | | | 1,714,369 | | | | 1,569,272 | | | | 1,567,894 | | | | 1,543,490 | | | | 6,395,025 | |
Average length of stay (days) | | | 4.77 | | | | 4.63 | | | | 4.60 | | | | 4.62 | | | | 4.66 | |
Licensed beds (at end of period) | | | 21,529 | | | | 20,380 | | | | 20,340 | | | | 20,354 | | | | 20,354 | |
Average licensed beds | | | 21,524 | | | | 20,380 | | | | 20,367 | | | | 20,326 | | | | 20,651 | |
Utilization of licensed beds | | | 51.6 | % | | | 48.4 | % | | | 47.7 | % | | | 47.5 | % | | | 48.8 | % |
Outpatient Visits | | | | | | | | | | | | | | | | | | | | |
Total visits | | | 2,146,618 | | | | 2,038,287 | | | | 2,009,019 | | | | 1,950,549 | | | | 8,144,473 | |
Paying visits (excludes charity and uninsured) | | | 1,984,515 | | | | 1,896,394 | | | | 1,862,046 | | | | 1,834,844 | | | | 7,577,799 | |
Charity and uninsured visits | | | 162,103 | | | | 141,893 | | | | 146,973 | | | | 115,705 | | | | 566,674 | |
Emergency department visits | | | 789,916 | | | | 715,692 | | | | 707,713 | | | | 701,100 | | | | 2,914,421 | |
Paying visits as a percentage of total visits | | | 92.4 | % | | | 93.0 | % | | | 92.7 | % | | | 94.1 | % | | | 93.0 | % |
Charity and uninsured visits as a percentage of total visits | | | 7.6 | % | | | 7.0 | % | | | 7.3 | % | | | 5.9 | % | | | 7.0 | % |
Total emergency department admissions and visits | | | 925,972 | | | | 837,975 | | | | 828,160 | | | | 821,649 | | | | 3,413,756 | |
Revenues | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenues | | $ | 2,781 | | | $ | 2,588 | | | $ | 2,644 | | | $ | 2,606 | | | $ | 10,619 | |
Net outpatient revenues | | $ | 1,514 | | | $ | 1,460 | | | $ | 1,417 | | | $ | 1,457 | | | $ | 5,848 | |
Revenues on a Per Admission, Per Patient Day and Per Visit Basis | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenue per admission | | $ | 13,130 | | | $ | 13,347 | | | $ | 13,605 | | | $ | 13,566 | | | $ | 13,405 | |
Net inpatient revenue per patient day | | $ | 2,752 | | | $ | 2,884 | | | $ | 2,956 | | | $ | 2,934 | | | $ | 2,878 | |
Net outpatient revenue per visit | | $ | 705 | | | $ | 716 | | | $ | 705 | | | $ | 747 | | | $ | 718 | |
Net patient revenue per adjusted patient admission | | $ | 11,838 | | | $ | 11,808 | | | $ | 11,764 | | | $ | 11,988 | | | $ | 11,849 | |
Net patient revenue per adjusted patient day | | $ | 2,505 | | | $ | 2,580 | | | $ | 2,590 | | | $ | 2,632 | | | $ | 2,575 | |
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission | | $ | 10,537 | | | $ | 10,668 | | | $ | 10,666 | | | | 10,743 | | | $ | 10,651 | |
Net Patient Revenues from: | | | | | | | | | | | | | | | | | | | | |
Medicare | | | 20.0 | % | | | 21.7 | % | | | 19.9 | % | | | 20.4 | % | | | 20.5 | % |
Medicaid | | | 8.7 | % | | | 7.4 | % | | | 8.4 | % | | | 8.2 | % | | | 8.2 | % |
Managed care | | | 61.1 | % | | | 59.4 | % | | | 64.0 | % | | | 61.4 | % | | | 61.5 | % |
Indemnity,self-pay and other | | | 10.2 | % | | | 11.5 | % | | | 7.7 | % | | | 10.0 | % | | | 9.8 | % |
| (1) | Represents the consolidated results of Tenet’s Hospital Operations and other segment. |
Page 15
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
(Dollars in millions except per patient day, per admission, per adjusted admission | | Three Months Ended | | | Year Ended | |
| and per visit amounts) | | 3/31/2016 | | | 6/30/2016 | | | 9/30/2016 | | | 12/31/2016 | | | 12/31/2016 | |
Admissions, Patient Days and Surgeries | | | | | | | | | | | | | | | | | | | | |
Number of hospitals (at end of period) | | | 67 | | | | 67 | | | | 67 | | | | 67 | | | | 67 | |
Total admissions | | | 185,053 | | | | 177,151 | | | | 177,626 | | | | 175,672 | | | | 715,502 | |
Adjusted patient admissions | | | 315,787 | | | | 309,372 | | | | 310,253 | | | | 303,912 | | | | 1,239,324 | |
Paying admissions (excludes charity and uninsured) | | | 176,286 | | | | 167,717 | | | | 167,219 | | | | 166,139 | | | | 677,361 | |
Charity and uninsured admissions | | | 8,767 | | | | 9,434 | | | | 10,407 | | | | 9,533 | | | | 38,141 | |
Admissions through emergency department | | | 118,578 | | | | 111,994 | | | | 110,539 | | | | 110,674 | | | | 451,785 | |
Paying admissions as a percentage of total admissions | | | 95.3 | % | | | 94.7 | % | | | 94.1 | % | | | 94.6 | % | | | 94.7 | % |
Charity and uninsured admissions as a percentage of total admissions | | | 4.7 | % | | | 5.3 | % | | | 5.9 | % | | | 5.4 | % | | | 5.3 | % |
Emergency department admissions as a percentage of total admissions | | | 64.1 | % | | | 63.2 | % | | | 62.2 | % | | | 63.0 | % | | | 63.1 | % |
Surgeries — inpatient | | | 48,547 | | | | 49,222 | | | | 49,608 | | | | 48,264 | | | | 195,641 | |
Surgeries — outpatient | | | 63,999 | | | | 65,678 | | | | 62,571 | | | | 64,053 | | | | 256,301 | |
Total surgeries | | | 112,546 | | | | 114,900 | | | | 112,179 | | | | 112,317 | | | | 451,942 | |
Patient days — total | | | 862,138 | | | | 805,662 | | | | 803,553 | | | | 798,205 | | | | 3,269,558 | |
Adjusted patient days | | | 1,456,580 | | | | 1,394,486 | | | | 1,390,214 | | | | 1,370,960 | | | | 5,612,240 | |
Average length of stay (days) | | | 4.66 | | | | 4.55 | | | | 4.52 | | | | 4.54 | | | | 4.57 | |
Licensed beds (at end of period) | | | 18,144 | | | | 18,144 | | | | 18,104 | | | | 18,118 | | | | 18,118 | |
Average licensed beds | | | 18,139 | | | | 18,144 | | | | 18,131 | | | | 18,090 | | | | 18,127 | |
Utilization of licensed beds | | | 52.8 | % | | | 48.8 | % | | | 48.2 | % | | | 48.0 | % | | | 49.4 | % |
Outpatient Visits | | | | | | | | | | | | | | | | | | | | |
Total visits | | | 1,854,735 | | | | 1,830,522 | | | | 1,805,800 | | | | 1,782,614 | | | | 7,273,671 | |
Paying visits (excludes charity and uninsured) | | | 1,728,684 | | | | 1,707,375 | | | | 1,676,686 | | | | 1,671,428 | | | | 6,784,173 | |
Charity and uninsured visits | | | 126,051 | | | | 123,147 | | | | 129,114 | | | | 111,186 | | | | 489,498 | |
Emergency department visits | | | 670,678 | | | | 640,774 | | | | 628,234 | | | | 620,622 | | | | 2,560,308 | |
Paying visits as a percentage of total visits | | | 93.2 | % | | | 93.3 | % | | | 92.9 | % | | | 93.8 | % | | | 93.3 | % |
Charity and uninsured visits as a percentage of total visits | | | 6.8 | % | | | 6.7 | % | | | 7.1 | % | | | 6.2 | % | | | 6.7 | % |
Total emergency department admissions and visits | | | 789,256 | | | | 752,768 | | | | 738,773 | | | | 731,296 | | | | 3,012,093 | |
Revenues | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenues | | $ | 2,499 | | | $ | 2,400 | | | $ | 2,435 | | | $ | 2,442 | | | $ | 9,776 | |
Net outpatient revenues | | $ | 1,331 | | | $ | 1,343 | | | $ | 1,333 | | | $ | 1,340 | | | $ | 5,347 | |
Revenues on a Per Admission, Per Patient Day and Per Visit Basis | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenue per admission | | $ | 13,504 | | | $ | 13,548 | | | $ | 13,709 | | | $ | 13,901 | | | $ | 13,663 | |
Net inpatient revenue per patient day | | $ | 2,899 | | | $ | 2,979 | | | $ | 3,030 | | | $ | 3,059 | | | $ | 2,990 | |
Net outpatient revenue per visit | | $ | 718 | | | $ | 734 | | | $ | 738 | | | $ | 752 | | | $ | 735 | |
Net patient revenue per adjusted patient admission | | $ | 12,128 | | | $ | 12,099 | | | $ | 12,145 | | | $ | 12,444 | | | $ | 12,203 | |
Net patient revenue per adjusted patient day | | $ | 2,629 | | | $ | 2,684 | | | $ | 2,710 | | | $ | 2,759 | | | $ | 2,695 | |
Net Patient Revenues from: | | | | | | | | | | | | | | | | | | | | |
Medicare | | | 20.6 | % | | | 20.1 | % | | | 19.7 | % | | | 19.9 | % | | | 20.1 | % |
Medicaid | | | 8.5 | % | | | 7.8 | % | | | 8.5 | % | | | 8.1 | % | | | 8.2 | % |
Managed care | | | 61.5 | % | | | 62.1 | % | | | 61.7 | % | | | 61.4 | % | | | 61.7 | % |
Indemnity,self-pay and other | | | 9.4 | % | | | 10.0 | % | | | 10.1 | % | | | 10.6 | % | | | 10.0 | % |
| (1) | Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 67 hospitals operated throughout the years ended December 31, 2016 and 2015, associated outpatient facilities and excludes the results of eight hospitals that Tenet acquired, as well as hospitals Tenet divested, since January 1, 2015. |
Page 16
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
(Dollars in millions except per patient day, per admission, per adjusted admission | | Three Months Ended | | | Year Ended | |
| and per visit amounts) | | 03/31/15 | | | 06/30/15 | | | 9/30/2015 | | | 12/31/2015 | | | 12/31/2015 | |
Admissions, Patient Days and Surgeries | | | | | | | | | | | | | | | | | | | | |
Number of hospitals (at end of period) | | | 67 | | | | 67 | | | | 67 | | | | 67 | | | | 67 | |
Total admissions | | | 185,147 | | | | 179,135 | | | | 176,885 | | | | 176,051 | | | | 717,218 | |
Adjusted patient admissions | | | 308,729 | | | | 307,958 | | | | 305,916 | | | | 305,436 | | | | 1,228,039 | |
Paying admissions (excludes charity and uninsured) | | | 176,023 | | | | 170,389 | | | | 167,463 | | | | 166,962 | | | | 680,837 | |
Charity and uninsured admissions | | | 9,124 | | | | 8,746 | | | | 9,422 | | | | 9,089 | | | | 36,381 | |
Admissions through emergency department | | | 118,326 | | | | 113,741 | | | | 110,235 | | | | 110,291 | | | | 452,593 | |
Paying admissions as a percentage of total admissions | | | 95.1 | % | | | 95.1 | % | | | 94.7 | % | | | 94.8 | % | | | 94.9 | % |
Charity and uninsured admissions as a percentage of total admissions | | | 4.9 | % | | | 4.9 | % | | | 5.3 | % | | | 5.2 | % | | | 5.1 | % |
Emergency department admissions as a percentage of total admissions | | | 63.9 | % | | | 63.5 | % | | | 62.3 | % | | | 62.6 | % | | | 63.1 | % |
Surgeries — inpatient | | | 48,295 | | | | 49,291 | | | | 49,527 | | | | 49,239 | | | | 196,352 | |
Surgeries — outpatient | | | 60,494 | | | | 64,407 | | | | 64,985 | | | | 65,046 | | | | 254,932 | |
Total surgeries | | | 108,789 | | | | 113,698 | | | | 114,512 | | | | 114,285 | | | | 451,284 | |
Patient days — total | | | 860,927 | | | | 817,881 | | | | 804,181 | | | | 803,037 | | | | 3,286,026 | |
Adjusted patient days | | | 1,421,505 | | | | 1,391,305 | | | | 1,374,619 | | | | 1,379,612 | | | | 5,567,041 | |
Average length of stay (days) | | | 4.65 | | | | 4.57 | | | | 4.55 | | | | 4.56 | | | | 4.58 | |
Licensed beds (at end of period) | | | 18,244 | | | | 18,244 | | | | 18,201 | | | | 18,130 | | | | 18,130 | |
Average licensed beds | | | 18,241 | | | | 18,244 | | | | 18,233 | | | | 18,154 | | | | 18,217 | |
Utilization of licensed beds | | | 52.4 | % | | | 49.3 | % | | | 47.9 | % | | | 48.1 | % | | | 49.4 | % |
Outpatient Visits | | | | | | | | | | | | | | | | | | | | |
Total visits | | | 1,762,868 | | | | 1,815,393 | | | | 1,792,264 | | | | 1,806,125 | | | | 7,176,650 | |
Paying visits (excludes charity and uninsured) | | | 1,639,131 | | | | 1,691,554 | | | | 1,659,417 | | | | 1,680,609 | | | | 6,670,711 | |
Charity and uninsured visits | | | 123,737 | | | | 123,839 | | | | 132,847 | | | | 125,516 | | | | 505,939 | |
Emergency department visits | | | 636,860 | | | | 632,470 | | | | 624,871 | | | | 626,280 | | | | 2,520,481 | |
Paying visits as a percentage of total visits | | | 93.0 | % | | | 93.2 | % | | | 92.6 | % | | | 93.1 | % | | | 93.0 | % |
Charity and uninsured visits as a percentage of total visits | | | 7.0 | % | | | 6.8 | % | | | 7.4 | % | | | 6.9 | % | | | 7.0 | % |
Total emergency department admissions and visits | | | 755,186 | | | | 746,211 | | | | 735,106 | | | | 736,571 | | | | 2,973,074 | |
Revenues | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenues | | $ | 2,382 | | | $ | 2,305 | | | $ | 2,289 | | | $ | 2,358 | | | $ | 9,334 | |
Net outpatient revenues | | $ | 1,226 | | | $ | 1,281 | | | $ | 1,288 | | | $ | 1,308 | | | $ | 5,103 | |
Revenues on a Per Admission, Per Patient Day and Per Visit Basis | | | | | | | | | | | | | | | | | | | | |
Net inpatient revenue per admission | | $ | 12,865 | | | $ | 12,867 | | | $ | 12,941 | | | $ | 13,394 | | | $ | 13,014 | |
Net inpatient revenue per patient day | | $ | 2,767 | | | $ | 2,818 | | | $ | 2,846 | | | $ | 2,936 | | | $ | 2,841 | |
Net outpatient revenue per visit | | $ | 695 | | | $ | 706 | | | $ | 719 | | | $ | 724 | | | $ | 711 | |
Net patient revenue per adjusted patient admission | | $ | 11,687 | | | $ | 11,644 | | | $ | 11,693 | | | $ | 12,003 | | | $ | 11,756 | |
Net patient revenue per adjusted patient day | | $ | 2,538 | | | $ | 2,577 | | | $ | 2,602 | | | $ | 2,657 | | | $ | 2,593 | |
Net Patient Revenues from: | | | | | | | | | | | | | | | | | | | | |
Medicare | | | 21.9 | % | | | 20.7 | % | | | 20.2 | % | | | 19.9 | % | | | 20.7 | % |
Medicaid | | | 9.4 | % | | | 8.3 | % | | | 8.8 | % | | | 8.3 | % | | | 8.7 | % |
Managed care | | | 59.1 | % | | | 61.6 | % | | | 61.7 | % | | | 61.8 | % | | | 61.1 | % |
Indemnity,self-pay and other | | | 9.6 | % | | | 9.4 | % | | | 9.3 | % | | | 10.0 | % | | | 9.5 | % |
| (1) | Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 67 hospitals operated throughout the years ended December 31, 2016 and 2015, associated outpatient facilities and excludes the results of eight hospitals that Tenet acquired, as well as hospitals Tenet divested, since January 1, 2015. |
Page 17
TENET HEALTHCARE CORPORATION
SEGMENT REPORTING
(Unaudited)
| | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2016 | | | 2015 | |
Assets | | | | | | | | |
Hospital Operations and other | | $ | 17,871 | | | $ | 17,353 | |
Ambulatory Care | | | 5,722 | | | | 5,159 | |
Conifer | | | 1,108 | | | | 1,170 | |
| | | | | | | | |
Total | | $ | 24,701 | | | $ | 23,682 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Years Ended | |
| | | December 31, | | | December 31, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
Capital expenditures: | | | | | | | | | | | | | | | | |
Hospital Operations and other | | $ | 242 | | | $ | 250 | | | $ | 799 | | | $ | 786 | |
Ambulatory Care | | | 9 | | | | 14 | | | | 51 | | | | 28 | |
Conifer | | | 10 | | | | 12 | | | | 25 | | | | 28 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 261 | | | $ | 276 | | | $ | 875 | | | $ | 842 | |
| | | | | | | | | | | | | | | | |
Net operating revenues: | | | | | | | | | | | | | | | | |
Hospital Operations and other | | $ | 4,143 | | | $ | 4,423 | | | $ | 16,904 | | | $ | 16,928 | |
Ambulatory Care | | | 478 | | | | 397 | | | | 1,797 | | | | 959 | |
Conifer | | | | | | | | | | | | | | | | |
Tenet | | | 163 | | | | 178 | | | | 651 | | | | 666 | |
Other customers | | | 239 | | | | 206 | | | | 920 | | | | 747 | |
| | | | | | | | | | | | | | | | |
Total Conifer revenues | | | 402 | | | | 384 | | | | 1,571 | | | | 1,413 | |
| | | | | | | | | | | | | | | | |
Intercompany eliminations | | | (163 | ) | | | (178 | ) | | | (651 | ) | | | (666 | ) |
| | | | | | | | | | | | | | | | |
Total | | $ | 4,860 | | | $ | 5,026 | | | $ | 19,621 | | | $ | 18,634 | |
| | | | | | | | | | | | | | | | |
Equity in earnings of unconsolidated affiliates: | | | | | | | | | | | | | | | | |
Hospital Operations and other | | $ | 3 | | | $ | 4 | | | $ | 9 | | | $ | 16 | |
Ambulatory Care | | | 43 | | | | 47 | | | | 122 | | | | 83 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 46 | | | $ | 51 | | | $ | 131 | | | $ | 99 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA: | | | | | | | | | | | | | | | | |
Hospital Operations and other | | $ | 358 | | | $ | 394 | | | $ | 1,521 | | | $ | 1,653 | |
Ambulatory Care | | | 183 | | | | 158 | | | | 615 | | | | 358 | |
Conifer | | | 72 | | | | 61 | | | | 277 | | | | 265 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 613 | | | $ | 613 | | | $ | 2,413 | | | $ | 2,276 | |
| | | | | | | | | | | | | | | | |
Depreciation and amortization: | | | | | | | | | | | | | | | | |
Hospital Operations and other | | $ | 184 | | | $ | 177 | | | $ | 709 | | | $ | 702 | |
Ambulatory Care | | | 22 | | | | 18 | | | | 91 | | | | 46 | |
Conifer | | | 12 | | | | 13 | | | | 50 | | | | 49 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 218 | | | $ | 208 | | | $ | 850 | | | $ | 797 | |
| | | | | | | | | | | | | | | | |
Page 18
TENET HEALTHCARE CORPORATION
STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT
(Unaudited)
| | | | | | | | | | | | | | | | |
| (Dollars in millions) | | Three Months Ended December 31, | |
| | | 2016 | | | 2015 | |
| | | Ambulatory
Care as
Reported
Under
GAAP | | | Unconsolidated
Affiliates | | | Ambulatory
Care as
Reported
Under
GAAP | | | Unconsolidated
Affiliates | |
Net operating revenues: | | | | | | | | | | | | | | | | |
Net operating revenues before provision for doubtful accounts | | $ | 487 | | | $ | 582 | | | $ | 404 | | | $ | 637 | |
Less: Provision for doubtful accounts | | | (9 | ) | | | (12 | ) | | | (7 | ) | | | (13 | ) |
| | | | | | | | | | | | | | | | |
Net operating revenues(1) | | | 478 | | | | 570 | | | | 397 | | | | 624 | |
Equity in earnings of unconsolidated affiliates(2) | | | 43 | | | | — | | | | 47 | | | | — | |
Operating expenses: | | | | | | | | | | | | | | | | |
Salaries, wages and benefits | | | 157 | | | | 124 | | | | 130 | | | | 135 | |
Supplies | | | 99 | | | | 145 | | | | 79 | | | | 148 | |
Other operating expenses, net | | | 83 | | | | 101 | | | | 78 | | | | 111 | |
Electronic health record incentives | | | (1 | ) | | | — | | | | (1 | ) | | | — | |
Depreciation and amortization | | | 22 | | | | 17 | | | | 18 | | | | 20 | |
Impairment and restructuring charges, and acquisition-related costs | | | 17 | | | | — | | | | 3 | | | | (2 | ) |
(Gains) loss on sales, consolidation and deconsolidation of facilities | | | — | | | | 4 | | | | (32 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Operating income | | | 144 | | | | 179 | | | | 169 | | | | 212 | |
Interest expense | | | (35 | ) | | | (6 | ) | | | (35 | ) | | | (7 | ) |
Other | | | 2 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net income from continuing operations, before income taxes | | | 111 | | | | 173 | | | | 134 | | | | 205 | |
Income tax expense | | | (17 | ) | | | (3 | ) | | | (16 | ) | | | (3 | ) |
| | | | | | | | | | | | | | | | |
Net income | | $ | 94 | | | $ | 170 | | | $ | 118 | | | $ | 202 | |
| | | | | | | | | | | | | | | | |
Less: Net income attributable to noncontrolling interests(3) | | | 81 | | | | | | | | 85 | | | | | |
| | | | | | | | | | | | | | | | |
Net income attributable to Tenet Healthcare Corporation common shareholders | | $ | 13 | | | | | | | $ | 33 | | | | | |
| | | | | | | | | | | | | | | | |
Equity in earnings of unconsolidated affiliates | | | | | | $ | 43 | | | | | | | $ | 47 | |
| (1) | On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 5.9% during the three months ended December 31, 2016, with cases increasing 1.7% and revenue per case increasing 4.1%. |
| (2) | At December 31, 2016, 108 of the 323 facilities in the Company’s newly formed Ambulatory segment were not consolidated based on the nature of the segment’s joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment’s unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company’s overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. The Company controls its remaining 215 facilities and account for these investments as consolidated subsidiaries. |
| (3) | During the three months ended December 31, 2016, the Company recorded a $5 million noncontrolling interests benefit related to $17 million of impairment and restructuring charges, and acquisition-related costs not included in Adjusted EBITDA. |
Page 19
TENET HEALTHCARE CORPORATION
STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT
INCLUDING PRO FORMA USPI AND ASPEN FOR ALL PERIODS
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Years Ended December 31, | |
| | | 2016 | | | 2015 | |
| | | Ambulatory
Care as
Reported
Under
GAAP | | | Unconsolidated
Affiliates | | | Ambulatory
Care as
Reported
Under
GAAP | | | Unconsolidated
Affiliates | |
Net operating revenues: | | | | | | | | | | | | | | | | |
Net operating revenues before provision for doubtful accounts | | $ | 1,833 | | | $ | 2,073 | | | $ | 1,366 | | | $ | 2,213 | |
Less: Provision for doubtful accounts | | | (36 | ) | | | (53 | ) | | | (23 | ) | | | (53 | ) |
| | | | | | | | | | | | | | | | |
Net operating revenues(1) | | | 1,797 | | | | 2,020 | | | | 1,343 | | | | 2,160 | |
Equity in earnings of unconsolidated affiliates(2) | | | 122 | | | | — | | | | 126 | | | | — | |
Operating expenses: | | | | | | | | | | | | | | | | |
Salaries, wages and benefits | | | 594 | | | | 477 | | | | 438 | | | | 514 | |
Supplies | | | 365 | | | | 520 | | | | 253 | | | | 542 | |
Other operating expenses, net | | | 346 | | | | 404 | | | | 290 | | | | 448 | |
Electronic health record incentives | | | (1 | ) | | | — | | | | (1 | ) | | | — | |
Depreciation and amortization | | | 91 | | | | 68 | | | | 64 | | | | 80 | |
Impairment and restructuring charges, and acquisition-related costs | | | 26 | | | | 1 | | | | 5 | | | | 1 | |
(Gains) loss on sales, consolidation and deconsolidation of facilities | | | (33 | ) | | | 7 | | | | (32 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Operating income | | | 531 | | | | 543 | | | | 452 | | | | 575 | |
Interest expense | | | (140 | ) | | | (24 | ) | | | (137 | ) | | | (28 | ) |
Other | | | 2 | | | | 6 | | | | — | | | | (2 | ) |
| | | | | | | | | | | | | | | | |
Net income from continuing operations, before income taxes | | | 393 | | | | 525 | | | | 315 | | | | 545 | |
Income tax expense | | | (54 | ) | | | (8 | ) | | | (52 | ) | | | (8 | ) |
| | | | | | | | | | | | | | | | |
Net Income | | $ | 339 | | | $ | 517 | | | $ | 263 | | | $ | 537 | |
| | | | | | | | | | | | | | | | |
Less: Net income attributable to noncontrolling interests(3) | | | 285 | | | | | | | | 206 | | | | | |
| | | | | | | | | | | | | | | | |
Net income attributable to Tenet Healthcare Corporation common shareholders | | $ | 54 | | | | | | | $ | 57 | | | | | |
| | | | | | | | | | | | | | | | |
Equity in earnings of unconsolidated affiliates | | | | | | $ | 122 | | | | | | | $ | 126 | |
| (1) | On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 9.6% during the year ended December 31, 2016, with cases increasing 5.2% and revenue per case increasing 4.2%. |
| (2) | At December 31, 2016, 108 of the 323 facilities in the Company’s newly formed Ambulatory segment were not consolidated based on the nature of the segment’s joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment’s unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company’s overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. The Company controls its remaining 215 facilities and account for these investments as consolidated subsidiaries. |
| (3) | During the year ended December 31, 2016, the Company recorded $14 million of net noncontrolling interests expense related to a $33 million gain on the consolidation of facilities (the gain is not included in Adjusted EBITDA) and an associated $7 million income tax benefit, net of $26 million of impairment and restructuring charges, and acquisition-related costs not included in Adjusted EBITDA. |
Page 20
Non-GAAP Financial Measures
Adjusted EBITDA, anon-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) the cumulative effect of changes in accounting principle, (2) net loss (income) attributable to noncontrolling interests, (3) income (loss) from discontinued operations, (4) income tax benefit (expense), (5) investment earnings (losses), (6) gain (loss) from early extinguishment of debt, (7) interest expense, (8) litigation and investigation (costs) benefit, net of insurance recoveries, (9) net gains (losses) on sales, consolidation and deconsolidation of facilities, (10) impairment and restructuring charges and acquisition-related costs, and (11) depreciation and amortization. Litigation and investigation costs do not include ordinary course of business malpractice and other litigation and related expense.
Adjusted net income from continuing operations, anon-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) impairment and restructuring charges, and acquisition-related costs, (2) litigation and investigation costs, (3) gains on sales, consolidation and deconsolidation of facilities, (4) the associated impact of these three items on taxes and noncontrolling interests, and (5) net income (loss) from discontinued operations. Adjusted diluted earnings per share from continuing operations, anon-GAAP term, is defined by the Company as Adjusted net income from continuing operations divided by the weighted average diluted shares outstanding in the reporting period.
Free Cash Flow, anon-GAAP measure, is defined by the Company as (1) net cash provided by (used in) operating activities, less (2) purchases of property and equipment from continuing operations.
Adjusted Free Cash Flow, anon-GAAP measure, is defined by the Company as (1) Adjusted net cash provided by (used in) operating activities from continuing operations, less (2) purchases of property and equipment from continuing operations. Adjusted net cash provided by (used in) operating activities, anon-GAAP measure, is defined by the Company as cash provided by (used in) operating activities prior to (1) payments for restructuring charges, acquisition-related costs and litigation costs and settlements, and, (2) net cash provided by (used in) operating activities from discontinued operations.
The Company believes the foregoingnon-GAAP measures are useful to investors and analysts because they present additional information on the Company’s financial performance. Investors, analysts, Company management and the Company’s Board of Directors utilize thesenon-GAAP measures, in addition to GAAP measures, to track the company’s financial and operating performance and compare the Company’s performance to its peer companies, which utilize similarnon-GAAP measures in their presentations. The Human Resources Committee of the Company’s Board of Directors also uses certain of these measures to evaluate management’s performance for the purpose of determining incentive compensation. Additional information regarding the purpose and utility of specificnon-GAAP measures used in this release is set forth below.
The Company believes that Adjusted EBITDA is a useful measure, in part, because certain investors and analysts use both historical and projected Adjusted EBITDA, in addition to other GAAP andnon-GAAP measures, as factors in determining the estimated fair value of shares of the Company’s common stock. Company management also regularly reviews the Adjusted EBITDA performance for each operating segment. The Company does not use Adjusted EBITDA to measure liquidity, but instead to measure operating performance.
We use, and we believe investors and analysts use, Free Cash Flow and Adjusted Free Cash Flow as supplemental measures to analyze cash flows generated from our operations because we believe it is useful to investors in evaluating our ability to fund distributions paid to noncontrolling interests, acquisitions, purchasing equity interests in joint ventures or repaying debt.
Thesenon-GAAP measures may not be comparable to similarly titled measures reported by other companies. Because these measures exclude many items that are included in our financial statements, they do not provide a complete measure of our operating performance. For example, the Company’s definitions of Free Cash Flow and Adjusted Free Cash Flow do not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company’s Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, (ii) distributions paid to noncontrolling interests, or (iii) payments under the Put/Call Agreement for USPI redeemable noncontrolling interest, which are recorded on the Statement of Cash Flows as the purchase of noncontrolling interest. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company’s financial performance.
A reconciliation of Adjusted EBITDA to net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, is set forth in Table #1 below for the three and twelve months ended December 31, 2016 and 2015. A reconciliation of Adjusted net income from continuing operations to net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, is set forth in Table #2 below for the three and twelve months ended December 31, 2016 and 2015. A reconciliation of Free Cash Flow and Adjusted Free Cash Flow to net cash provided by (used in) operating activities, the most comparable GAAP measure, is set forth in Table #3 below for the three and twelve months ended December 31, 2016 and 2015.
Page 21
TENET HEALTHCARE CORPORATION
Additional SupplementalNon-GAAP disclosures
Table #1 – Reconciliation of Adjusted EBITDA to Loss Attributable
to Tenet Healthcare Corporation Common Shareholders
(Unaudited)
| | | | | | | | | | | | | | | | |
| (Dollars in millions) | | Three Months Ended | | | Years Ended | |
| | | December 31, | | | December 31, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
Net loss attributable to Tenet Healthcare Corporation common shareholders | | $ | (79 | ) | | $ | (97 | ) | | $ | (192 | ) | | $ | (140 | ) |
Less: Net income attributable to noncontrolling interests | | | (102 | ) | | | (99 | ) | | | (368 | ) | | | (218 | ) |
Net income (loss) from discontinued operations, net of tax | | | — | | | | 3 | | | | (5 | ) | | | 2 | |
| | | | | | | | | | | | | | | | |
Net income (loss) from continuing operations | | | 23 | | | | (1 | ) | | | 181 | | | | 76 | |
Income tax expense | | | (6 | ) | | | (68 | ) | | | (67 | ) | | | (68 | ) |
Investment earnings | | | 6 | | | | 1 | | | | 8 | | | | 1 | |
Loss from early extinguishment of debt | | | — | | | | (1 | ) | | | — | | | | (1 | ) |
Interest expense | | | (249 | ) | | | (248 | ) | | | (979 | ) | | | (912 | ) |
| | | | | | | | | | | | | | | | |
Operating income | | | 272 | | | | 315 | | | | 1,219 | | | | 1,056 | |
Litigation and investigation costs | | | (2 | ) | | | (224 | ) | | | (293 | ) | | | (291 | ) |
Gains on sales, consolidation and deconsolidation of facilities | | | — | | | | 186 | | | | 151 | | | | 186 | |
Impairment and restructuring charges, and acquisition-related costs | | | (121 | ) | | | (52 | ) | | | (202 | ) | | | (318 | ) |
Depreciation and amortization | | | (218 | ) | | | (208 | ) | | | (850 | ) | | | (797 | ) |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 613 | | | $ | 613 | | | $ | 2,413 | | | $ | 2,276 | |
| | | | | | | | | | | | | | | | |
Net operating revenues | | $ | 4,860 | | | $ | 5,026 | | | $ | 19,621 | | | $ | 18,634 | |
| | | | | | | | | | | | | | | | |
Net loss from continuing operations as a % of operating revenues | | | (1.6 | )% | | | (2.0 | )% | | | (1.0 | )% | | | (0.8 | )% |
Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin) | | | 12.6 | % | | | 12.2 | % | | | 12.3 | % | | | 12.2 | % |
Page 22
TENET HEALTHCARE CORPORATION
Additional SupplementalNon-GAAP disclosures
Table #2 –Pre-Tax,After-Tax and Earnings Per Share Impact of Certain Items
on Continuing Operations
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Years Ended | |
| (Dollars in millions except per share amounts) | | December 31, | | | December 31, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
Adjustments to calculate Adjusted Diluted EPS | | | (Expense) Income | |
Impairment and restructuring charges, and acquisition-related costs | | $ | (121 | ) | | $ | (52 | ) | | $ | (202 | ) | | $ | (318 | ) |
Litigation and investigation costs | | | (2 | ) | | | (224 | ) | | | (293 | ) | | | (291 | ) |
Loss from early extinguishment of debt | | | — | | | | (1 | ) | | | — | | | | (1 | ) |
Gain on sales, consolidation and deconsolidation of facilities | | | — | | | | 186 | | | | 151 | | | | 186 | |
| | | | | | | | | | | | | | | | |
Pre-tax impact | | $ | (123 | ) | | $ | (91 | ) | | $ | (344 | ) | | $ | (424 | ) |
| | | | | | | | | | | | | | | | |
Tax impact of above items | | $ | 33 | | | $ | (24 | ) | | $ | 66 | | | $ | 94 | |
| | | | | | | | | | | | | | | | |
Totalafter-tax impact | | $ | (90 | ) | | $ | (115 | ) | | $ | (278 | ) | | $ | (330 | ) |
Noncontrolling interests impact | | | 5 | | | | (20 | ) | | | (14 | ) | | | (20 | ) |
| | | | | | | | | | | | | | | | |
Total loss from items above | | $ | (85 | ) | | $ | (135 | ) | | $ | (292 | ) | | $ | (350 | ) |
| | | | | | | | | | | | | | | | |
Net income available (loss attributable) to common shareholders | | $ | (79 | ) | | $ | (97 | ) | | $ | (192 | ) | | $ | (140 | ) |
Less net income (loss) discontinued operations, net of tax | | | — | | | | 3 | | | | (5 | ) | | | 2 | |
| | | | | | | | | | | | | | | | |
Net loss from continuing operations, net of tax | | $ | (79 | ) | | $ | (100 | ) | | $ | (187 | ) | | $ | (142 | ) |
Net loss from adjustments above | | | 85 | | | | 135 | | | | 292 | | | | 350 | |
| | | | | | | | | | | | | | | | |
Adjusted net income from continuing operations | | $ | 6 | | | $ | 35 | | | $ | 105 | | | $ | 208 | |
| | | | | | | | | | | | | | | | |
Weighted average dilutive shares outstanding (in thousands) | | | 100,928 | | | | 101,361 | | | | 100,742 | | | | 101,547 | |
Diluted loss per share from continuing operations | | $ | (0.79 | ) | | $ | (1.01 | ) | | $ | (1.88 | ) | | $ | (1.43 | ) |
Adjusted diluted EPS from continuing operations | | $ | 0.06 | | | $ | 0.35 | | | $ | 1.04 | | | $ | 2.05 | |
TENET HEALTHCARE CORPORATION
Additional SupplementalNon-GAAP disclosures
Table #3 – Reconciliations of Free Cash Flow and Adjusted Free Cash Flow
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Years Ended | |
| (Dollars in millions) | | December 31, | | | December 31, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
Net cash provided by (used in) operating activities | | $ | (293 | ) | | $ | 191 | | | $ | 558 | | | $ | 1,026 | |
Purchases of property and equipment | | | (261 | ) | | | (276 | ) | | | (875 | ) | | | (842 | ) |
| | | | | | | | | | | | | | | | |
Free cash flow | | $ | (554 | ) | | $ | (85 | ) | | $ | (317 | ) | | $ | 184 | |
| | | | | | | | | | | | | | | | |
Net cash provided by (used in) investing activities | | $ | (280 | ) | | $ | (45 | ) | | $ | (430 | ) | | $ | (1,317 | ) |
Net cash provided by (used in) financing activities | | $ | 640 | | | $ | (240 | ) | | $ | 232 | | | $ | 454 | |
Net cash provided by (used in) operating activities | | $ | (293 | ) | | $ | 191 | | | $ | 558 | | | $ | 1,026 | |
Less: | | | | | | | | | | | | | | | | |
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | | | (559 | ) | | | (43 | ) | | | (691 | ) | | | (200 | ) |
Net cash used in operating activities from discontinued operations | | | (7 | ) | | | (3 | ) | | | (6 | ) | | | (21 | ) |
| | | | | | | | | | | | | | | | |
Adjusted net cash provided by operating activities – continuing operations | | | 273 | | | | 237 | | | | 1,255 | | | | 1,247 | |
Purchases of property and equipment – continuing operations | | | (261 | ) | | | (276 | ) | | | (875 | ) | | | (842 | ) |
| | | | | | | | | | | | | | | | |
Adjusted free cash flow – continuing operations | | $ | 12 | | | $ | (39 | ) | | $ | 380 | | | $ | 405 | |
| | | | | | | | | | | | | | | | |
Page 23
TENET HEALTHCARE CORPORATION
Additional SupplementalNon-GAAP disclosures
Table #4 – Reconciliation of Outlook Adjusted EBITDA to
Outlook Net Income Attributable to Tenet Healthcare Corporation Common Shareholders
(Unaudited)
| | | | | | | | | | | | | | | | |
| (Dollars in millions) | | Q1 2017 | | | 2017 | |
| | | Low | | | High | | | Low | | | High | |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders | | $ | (65 | ) | | $ | (45 | ) | | $ | 97 | | | $ | 133 | |
Less: Net (income) loss attributable to noncontrolling interests | | | (85 | ) | | | (95 | ) | | | (390 | ) | | | (410 | ) |
Net loss from discontinued operations, net of tax | | | (5 | ) | | | — | | | | (10 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Income from continuing operations | | | 25 | | | | 50 | | | | 497 | | | | 543 | |
Income tax benefit (expense) | | | 15 | | | | 10 | | | | (118 | ) | | | (142 | ) |
| | | | | | | | | | | | | | | | |
Income from continuing operations, before income taxes | | | 10 | | | | 40 | | | | 615 | | | | 685 | |
Interest expense | | | (250 | ) | | | (260 | ) | | | (1,025 | ) | | | (1,035 | ) |
| | | | | | | | | | | | | | | | |
Operating income | | | 260 | | | | 300 | | | | 1,640 | | | | 1,720 | |
Depreciation and amortization | | | (215 | ) | | | (225 | ) | | | (860 | ) | | | (880 | ) |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 475 | | | $ | 525 | | | $ | 2,500 | | | $ | 2,600 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin) | | | 10.0 | % | | | 10.6 | % | | | 12.7 | % | | | 12.9 | % |
Net income (loss) from continuing operations | | $ | (60 | ) | | $ | (45 | ) | | $ | 107 | | | $ | 133 | |
Net income (loss) from continuing operations as a % of operating revenues | | | (1.3 | )% | | | (0.9 | )% | | | 0.5 | % | | | 0.7 | % |
| | | | | | | | | | | | | | | | |
Net operating revenues | | $ | 4,750 | | | $ | 4,950 | | | $ | 19,700 | | | $ | 20,100 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 475 | | | $ | 525 | | | $ | 2,500 | | | $ | 2,600 | |
Depreciation and amortization | | | (215 | ) | | | (225 | ) | | | (860 | ) | | | (880 | ) |
Interest expense | | | (250 | ) | | | (260 | ) | | | (1,025 | ) | | | (1,035 | ) |
| | | | | | | | | | | | | | | | |
Adjusted income from continuing operations before income taxes | | | 10 | | | | 40 | | | | 615 | | | | 685 | |
Income tax benefit (expense) | | | 15 | | | | 10 | | | | (118 | ) | | | (142 | ) |
| | | | | | | | | | | | | | | | |
Adjusted income from continuing operations | | | 25 | | | | 50 | | | | 497 | | | | 543 | |
Net income attributable to noncontrolling interests | | | (85 | ) | | | (95 | ) | | | (390 | ) | | | (410 | ) |
| | | | | | | | | | | | | | | | |
Adjusted net income (loss) attributable to common shareholders | | $ | (60 | ) | | $ | (45 | ) | | $ | 107 | | | $ | 133 | |
| | | | | | | | | | | | | | | | |
Basic weighted average shares outstanding (in millions) | | | 100 | | | | 100 | | | | 100 | | | | 100 | |
Fully diluted weighted average shares outstanding (in millions) | | | 101 | | | | 101 | | | | 102 | | | | 102 | |
Diluted earnings (loss) per share from continuing operations | | $ | (0.60 | ) | | $ | (0.45 | ) | | $ | 1.05 | | | $ | 1.30 | |
Adjusted diluted earnings (loss) per share from continuing operations | | $ | (0.60 | ) | | $ | (0.45 | ) | | $ | 1.05 | | | $ | 1.30 | |
The Company does not forecast impairment and restructuring charges, acquisition-related costs and litigation costs and settlements and gains on sales, consolidation and deconsolidation of facilities because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook.
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TENET HEALTHCARE CORPORATION
Additional SupplementalNon-GAAP disclosures
Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow
for the Year Ending December 31, 2017
| | | | | | | | |
| (Dollars in millions) | | 2017 | |
| | | Low | | | High | |
Net cash provided by operating activities | | $ | 1,295 | | | $ | 1,550 | |
Less: | | | | | | | | |
Net cash used in operating activities from discontinued operations | | | (5 | ) | | | 0 | |
| | | | | | | | |
Adjusted net cash provided by operating activities – continuing operations | | $ | 1,300 | | | $ | 1,550 | |
Purchases of property and equipment – continuing operations | | | (700 | ) | | | (750 | ) |
| | | | | | | | |
Adjusted free cash flow – continuing operations(1) | | $ | 600 | | | $ | 800 | |
| | | | | | | | |
The Company does not forecast impairment and restructuring charges, acquisition-related costs and litigation costs and settlements because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items may be indeterminable at the time the Company provides its financial Outlook.
| (1) | The Company’s definition of Adjusted Free Cash Flow does not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company’s Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, (ii) distributions paid to noncontrolling interests, or (iii) payments under the Put/Call Agreement for USPI redeemable noncontrolling interest, which are recorded on the Statement of Cash Flows as the purchase of noncontrolling interest. |
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