Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'TENET HEALTHCARE CORP | ' |
Entity Central Index Key | '0000070318 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 98,280,152 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $200 | $113 |
Accounts receivable, less allowance for doubtful accounts ($773 at March 31, 2014 and $589 at December 31, 2013) | 2,238 | 1,890 |
Inventories of supplies, at cost | 270 | 260 |
Income tax receivable | 22 | ' |
Current portion of deferred income taxes | 725 | 692 |
Other current assets | 746 | 737 |
Total current assets | 4,201 | 3,692 |
Investments and other assets | 366 | 357 |
Deferred income taxes, net of current portion | 100 | 148 |
Property and equipment, at cost, less accumulated depreciation and amortization ($4,347 at September 30, 2014 and $3,907 at December 31, 2013) | 7,749 | 7,582 |
Goodwill | 3,705 | 3,566 |
Other intangible assets, at cost, less accumulated amortization ($623 at September 30, 2014 and $549 at December 31, 2013) | 1,191 | 1,105 |
Total assets | 17,312 | 16,450 |
Current liabilities: | ' | ' |
Current portion of long-term debt | 98 | 153 |
Accounts payable | 1,068 | 1,085 |
Accrued compensation and benefits | 735 | 622 |
Professional and general liability reserves | 175 | 156 |
Accrued interest payable | 265 | 198 |
Other current liabilities | 804 | 879 |
Total current liabilities | 3,145 | 3,093 |
Long-term debt, net of current portion | 11,455 | 10,696 |
Professional and general liability reserves | 525 | 555 |
Defined benefit plan obligations | 381 | 398 |
Other long-term liabilities | 544 | 490 |
Total liabilities | 16,050 | 15,232 |
Commitments and contingencies | ' | ' |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | 396 | 340 |
Shareholders' equity: | ' | ' |
Common stock, $0.05 par value; authorized 262,500,000 shares; 145,421,213 shares issued at September 30, 2014 and 144,057,351 shares issued at December 31, 2013 | 7 | 7 |
Additional paid-in capital | 4,597 | 4,572 |
Accumulated other comprehensive loss | -20 | -24 |
Accumulated deficit | -1,471 | -1,422 |
Common stock in treasury, at cost, 47,196,935 shares at September 30, 2014 and 47,197,722 shares at December 31, 2013 | -2,378 | -2,378 |
Total shareholders' equity | 735 | 755 |
Noncontrolling interests | 131 | 123 |
Total equity | 866 | 878 |
Total liabilities and equity | $17,312 | $16,450 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $773 | $589 |
Property and equipment, accumulated depreciation and amortization (in dollars) | 4,347 | 3,907 |
Other intangible assets, accumulated amortization (in dollars) | $623 | $516 |
Common stock, par value (in dollars per share) | $0.05 | $0.05 |
Common stock, authorized shares | 262,500,000 | 262,500,000 |
Common stock, shares issued | 145,421,213 | 144,057,351 |
Common stock in treasury, shares | 47,196,935 | 47,197,722 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net operating revenues: | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | $4,428 | $2,618 | $13,096 | $7,841 |
Less: Provision for doubtful accounts | 249 | 210 | 949 | 624 |
Net operating revenues | 4,179 | 2,408 | 12,147 | 7,217 |
Operating expenses: | ' | ' | ' | ' |
Salaries, wages and benefits | 2,028 | 1,172 | 5,905 | 3,499 |
Supplies | 665 | 387 | 1,942 | 1,158 |
Other operating expenses, net | 1,032 | 575 | 3,066 | 1,710 |
Electronic health record incentives | -5 | -14 | -72 | -48 |
Depreciation and amortization | 207 | 119 | 609 | 354 |
Impairment and restructuring charges, and acquisition-related costs | 37 | 20 | 90 | 45 |
Litigation and investigation costs | 4 | 1 | 19 | 3 |
Operating income | 211 | 148 | 588 | 496 |
Interest expense | -186 | -91 | -558 | -292 |
Loss from early extinguishment of debt | -24 | ' | -24 | -348 |
Investment earnings | ' | ' | ' | 1 |
Net income (loss) from continuing operations, before income taxes | 1 | 57 | 6 | -143 |
Income tax benefit (expense) | 18 | -16 | 11 | 57 |
Net income (loss) from continuing operations, before discontinued operations | 19 | 41 | 17 | -86 |
Discontinued operations: | ' | ' | ' | ' |
Loss from operations | -2 | -8 | -17 | -5 |
Litigation and investigation costs | ' | -2 | -18 | -2 |
Income tax benefit | 1 | 5 | 13 | 3 |
Net loss from discontinued operations | -1 | -5 | -22 | -4 |
Net income (loss) | 18 | 36 | -5 | -90 |
Less: Net income attributable to noncontrolling interests | 9 | 8 | 44 | 20 |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders | 9 | 28 | -49 | -110 |
Amounts attributable to Tenet Healthcare Corporation common shareholders | ' | ' | ' | ' |
Net income (loss) from continuing operations, net of tax | 10 | 33 | -27 | -106 |
Net loss from discontinued operations, net of tax | -1 | -5 | -22 | -4 |
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders | $9 | $28 | ($49) | ($110) |
Basic | ' | ' | ' | ' |
Continuing operations (in dollars per share) | $0.10 | $0.33 | ($0.27) | ($1.03) |
Discontinued operations (in dollars per share) | ($0.01) | ($0.05) | ($0.23) | ($0.04) |
Total loss per share, Basic (in dollars per share) | $0.09 | $0.28 | ($0.50) | ($1.07) |
Diluted | ' | ' | ' | ' |
Continuing operations (in dollars per share) | $0.10 | $0.32 | ($0.27) | ($1.03) |
Discontinued operations (in dollars per share) | ($0.01) | ($0.05) | ($0.23) | ($0.04) |
Total loss per share, Diluted (in dollars per share) | $0.09 | $0.27 | ($0.50) | ($1.07) |
Weighted average shares and dilutive securities outstanding (in thousands): | ' | ' | ' | ' |
Basic (in shares) | 98,036 | 100,894 | 97,625 | 102,669 |
Diluted (in shares) | 100,926 | 103,098 | 97,625 | 102,669 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME | ' | ' | ' | ' |
Net income (loss) | $18 | $36 | ($5) | ($90) |
Other comprehensive income: | ' | ' | ' | ' |
Amortization of prior-year service costs included in net periodic benefit costs | 1 | ' | 4 | ' |
Unrealized gains (losses) on securities held as available-for-sale | -1 | ' | 2 | ' |
Other comprehensive income before income taxes | ' | ' | 6 | ' |
Income tax expense related to items of other comprehensive income | ' | ' | -2 | ' |
Total other comprehensive income, net of tax | ' | ' | 4 | ' |
Comprehensive net income (loss) | 18 | 36 | -1 | -90 |
Less: Comprehensive income attributable to noncontrolling interests | 9 | 8 | 44 | 20 |
Comprehensive net income (loss) attributable to Tenet Healthcare Corporation common shareholders | $9 | $28 | ($45) | ($110) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ' | ' |
Net loss | ($5) | ($90) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 609 | 354 |
Provision for doubtful accounts | 949 | 624 |
Deferred income tax benefit | -22 | -60 |
Stock-based compensation expense | 41 | 26 |
Impairment and restructuring charges, and acquisition-related costs | 90 | 45 |
Litigation and investigation costs | 19 | 3 |
Loss from early extinguishment of debt | 24 | 348 |
Amortization of debt discount and debt issuance costs | 21 | 12 |
Pre-tax loss from discontinued operations | 35 | 7 |
Other items, net | -16 | -19 |
Changes in cash from operating assets and liabilities: | ' | ' |
Accounts receivable | -1,309 | -662 |
Inventories and other current assets | 12 | -159 |
Income taxes | -7 | -5 |
Accounts payable, accrued expenses and other current liabilities | 120 | -44 |
Other long-term liabilities | 38 | -5 |
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | -115 | -36 |
Net cash used in operating activities from discontinued operations, excluding income taxes | -16 | -5 |
Net cash provided by operating activities | 468 | 334 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment - continuing operations | -734 | -398 |
Purchases of businesses or joint venture interests, net of cash acquired | -185 | -142 |
Proceeds from sales of facilities and other assets - discontinued operations | 4 | 11 |
Proceeds from sales of marketable securities, long-term investments and other assets | 2 | 6 |
Other long-term assets | 4 | -11 |
Other items, net | 3 | 3 |
Net cash used in investing activities | -914 | -509 |
Cash flows from financing activities: | ' | ' |
Repayments of borrowings under credit facility | -1,965 | -1,001 |
Proceeds from borrowings under credit facility | 1,560 | 1,211 |
Repayments of other borrowings | -655 | -1,987 |
Proceeds from other borrowings | 1,608 | 1,907 |
Repurchases of common stock | ' | -300 |
Deferred debt issuance costs | -26 | -31 |
Distributions paid to noncontrolling interests | -30 | -18 |
Contributions from noncontrolling interests | 15 | 98 |
Proceeds from exercise of stock options | 23 | 22 |
Other items, net | 3 | -8 |
Net cash provided by (used in) financing activities | 533 | -107 |
Net increase (decrease) in cash and cash equivalents | 87 | -282 |
Cash and cash equivalents at beginning of period | 113 | 364 |
Cash and cash equivalents at end of period | 200 | 82 |
Supplemental disclosures: | ' | ' |
Interest paid, net of capitalized interest | -487 | -295 |
Income tax payments, net | ($5) | ($5) |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||
BASIS OF PRESENTATION | ' | |||||||||||||||||||||
BASIS OF PRESENTATION | ' | |||||||||||||||||||||
NOTE 1. BASIS OF PRESENTATION | ||||||||||||||||||||||
Description of Business and Basis of Presentation | ||||||||||||||||||||||
Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is a national, diversified healthcare services company. As of September 30, 2014, we operated 80 hospitals, 198 outpatient centers, six health plans and Conifer Health Solutions, LLC (“Conifer”), which provides healthcare business process services in the areas of revenue cycle management, value-based care and patient communications. | ||||||||||||||||||||||
Effective October 1, 2013, we acquired the common stock of Vanguard Health Systems, Inc. (“Vanguard”) for $21 per share in an all cash transaction. Vanguard owned and operated 28 hospitals (plus one more under construction, which was recently completed), 39 outpatient centers and five health plans with approximately 140,000 members, serving communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas. We paid approximately $4.3 billion to acquire Vanguard, including the assumption of $2.5 billion of Vanguard’s net debt. | ||||||||||||||||||||||
This quarterly report supplements our Annual Report on Form 10-K for the year ended December 31, 2013 (“Annual Report”). As permitted by the Securities and Exchange Commission for interim reporting, we have omitted certain notes and disclosures that substantially duplicate those in our Annual Report. For further information, refer to the audited Consolidated Financial Statements and notes included in our Annual Report. Unless otherwise indicated, all financial and statistical data included in these notes to our Condensed Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). The accompanying Condensed Consolidated Balance Sheet as of December 31, 2013 was derived from the audited consolidated financial statements included in our Annual Report, but has been revised to reflect the impact of completing the purchase price allocation for the acquisition of Vanguard, as described in Note 14. Additionally, certain prior-year amounts have been adjusted to conform to the current-year presentation, including $73 million of Medicaid supplemental payments receivable that are now presented as other current assets rather than accounts receivable. | ||||||||||||||||||||||
Although the Condensed Consolidated Financial Statements and related notes within this document are unaudited, we believe all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. In preparing our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), we must use estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and these accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable given the particular circumstances in which we operate. Actual results may vary from those estimates. Financial and statistical information we report to other regulatory agencies may be prepared on a basis other than GAAP or using different assumptions or reporting periods and, therefore, may vary from amounts presented herein. Although we make every effort to ensure that the information we report to those agencies is accurate, complete and consistent with applicable reporting guidelines, we cannot be responsible for the accuracy of the information they make available to the public. | ||||||||||||||||||||||
Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the full year. Reasons for this include, but are not limited to: overall revenue and cost trends, particularly the timing and magnitude of price changes; fluctuations in contractual allowances and cost report settlements and valuation allowances; managed care contract negotiations, settlements or terminations and payer consolidations; changes in Medicare and Medicaid regulations; Medicaid and other supplemental funding levels set by the states in which we operate; the timing of approval by the Centers for Medicare and Medicaid Services of Medicaid provider fee revenue programs; trends in patient accounts receivable collectability and associated provisions for doubtful accounts; fluctuations in interest rates; levels of malpractice insurance expense and settlement trends; the number of covered lives managed by our health plans and the plans’ ability to effectively manage medical costs; the timing of when we meet the criteria to recognize electronic health record incentives; impairment of long-lived assets and goodwill; restructuring charges; losses, costs and insurance recoveries related to natural disasters; litigation and investigation costs; acquisitions and dispositions of facilities and other assets; income tax rates and deferred tax asset valuation allowance activity; changes in estimates of accruals for annual incentive compensation; the timing and amounts of stock option and restricted stock unit grants to employees and directors; gains or losses from early extinguishment of debt; and changes in occupancy levels and patient volumes. Factors that affect patient volumes and, thereby, the results of operations at our hospitals and related healthcare facilities include, but are not limited to: the business environment, economic conditions and demographics of local communities in which we operate; the number of uninsured and underinsured individuals in local communities treated at our hospitals; seasonal cycles of illness; climate and weather conditions; physician recruitment, retention and attrition; advances in technology and treatments that reduce length of stay; local healthcare competitors; managed care contract negotiations or terminations; any unfavorable publicity about us, which impacts our relationships with physicians and patients; changes in healthcare regulations and the participation of individual states in federal programs; and the timing of elective procedures. These considerations apply to year-to-year comparisons as well. | ||||||||||||||||||||||
Net Operating Revenues Before Provision for Doubtful Accounts | ||||||||||||||||||||||
We recognize net operating revenues before provision for doubtful accounts in the period in which our services are performed. Net operating revenues before provision for doubtful accounts primarily consist of net patient service revenues that are recorded based on established billing rates (i.e., gross charges), less estimated discounts for contractual and other allowances, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact with Uninsured Patients (“Compact”) and other uninsured discount and charity programs. | ||||||||||||||||||||||
The table below shows the sources of net operating revenues before provision for doubtful accounts: | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
General Hospitals: | ||||||||||||||||||||||
Medicare | $ | 838 | $ | 501 | $ | 2,560 | $ | 1,543 | ||||||||||||||
Medicaid | 340 | 206 | 1,012 | 630 | ||||||||||||||||||
Managed care | 2,369 | 1,378 | 6,787 | 4,126 | ||||||||||||||||||
Indemnity, self-pay and other | 357 | 262 | 1,172 | 783 | ||||||||||||||||||
Acute care hospitals — other revenue | 8 | 14 | 45 | 53 | ||||||||||||||||||
Other: | ||||||||||||||||||||||
Other operations | 516 | 257 | 1,520 | 706 | ||||||||||||||||||
Net operating revenues before provision for doubtful accounts | $ | 4,428 | $ | 2,618 | $ | 13,096 | $ | 7,841 | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||||
We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were approximately $200 million and $113 million at September 30, 2014 and December 31, 2013, respectively. As of September 30, 2014 and December 31, 2013, our book overdrafts were approximately $194 million and $245 million, respectively, which were classified as accounts payable. | ||||||||||||||||||||||
At September 30, 2014 and December 31, 2013, approximately $98 million and $62 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries. | ||||||||||||||||||||||
Also at September 30, 2014 and December 31, 2013, we had $113 million and $193 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $62 million and $138 million, respectively, were included in accounts payable. | ||||||||||||||||||||||
During the nine months ended September 30, 2014 and 2013, we entered into non-cancellable capital leases of approximately $112 million and $99 million, respectively, primarily for buildings and equipment. | ||||||||||||||||||||||
Other Intangible Assets | ||||||||||||||||||||||
The following tables provide information regarding other intangible assets, which are included in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013: | ||||||||||||||||||||||
Gross | ||||||||||||||||||||||
Carrying | Accumulated | Net Book | ||||||||||||||||||||
Amount | Amortization | Value | ||||||||||||||||||||
As of September 30, 2014: | ||||||||||||||||||||||
Capitalized software costs | $ | 1,326 | $ | -552 | $ | 774 | ||||||||||||||||
Long-term debt issuance costs | 245 | -42 | 203 | |||||||||||||||||||
Trade names | 106 | — | 106 | |||||||||||||||||||
Contracts | 57 | -5 | 52 | |||||||||||||||||||
Other | 80 | -24 | 56 | |||||||||||||||||||
Total | $ | 1,814 | $ | -623 | $ | 1,191 | ||||||||||||||||
Gross | ||||||||||||||||||||||
Carrying | Accumulated | Net Book | ||||||||||||||||||||
Amount | Amortization | Value | ||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||
Capitalized software costs | $ | 1,148 | $ | -468 | $ | 680 | ||||||||||||||||
Long-term debt issuance costs | 230 | -31 | 199 | |||||||||||||||||||
Trade names | 106 | — | 106 | |||||||||||||||||||
Contracts | 57 | -2 | 55 | |||||||||||||||||||
Other | 80 | -15 | 65 | |||||||||||||||||||
Total | $ | 1,621 | $ | -516 | $ | 1,105 | ||||||||||||||||
Estimated future amortization of intangibles with finite useful lives as of September 30, 2014 is as follows: | ||||||||||||||||||||||
Years Ending December 31, | ||||||||||||||||||||||
Total | 2014 | 2015 | 2016 | 2017 | 2018 | Later Years | ||||||||||||||||
Amortization of intangible assets | $ | 1,077 | $ | 54 | $ | 190 | $ | 163 | $ | 134 | $ | 130 | $ | 406 | ||||||||
ACCOUNTS_RECEIVABLE_AND_ALLOWA
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ' | ||||||
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ' | ||||||
NOTE 2. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | |||||||
The principal components of accounts receivable are shown in the table below: | |||||||
September 30, | December 31, | ||||||
2014 | 2013 | ||||||
Continuing operations: | |||||||
Patient accounts receivable | $ | 2,978 | $ | 2,459 | |||
Allowance for doubtful accounts | -772 | -589 | |||||
Estimated future recoveries from accounts assigned to our Conifer subsidiary | 122 | 92 | |||||
Net cost reports and settlements payable and valuation allowances | -92 | -75 | |||||
2,236 | 1,887 | ||||||
Discontinued operations | 2 | 3 | |||||
Accounts receivable, net | $ | 2,238 | $ | 1,890 | |||
As of September 30, 2014 and December 31, 2013, our allowance for doubtful accounts was 25.9% and 24.0%, respectively, of our patient accounts receivable. Accounts that are pursued for collection through Conifer’s regional business offices are maintained on our hospitals’ books and reflected in patient accounts receivable with an allowance for doubtful accounts established to reduce the carrying value of such receivables to their estimated net realizable value. Generally, we estimate this allowance based on the aging of our accounts receivable by hospital, our historical collection experience by hospital and for each type of payer, and other relevant factors. As of September 30, 2014 and December 31, 2013, our allowance for doubtful accounts for self-pay was 79.5% and 75.9%, respectively, of our self-pay patient accounts receivable, including co-pays and deductibles owed by patients with insurance. As of September 30, 2014 and December 31, 2013, our allowance for doubtful accounts for managed care was 6.2% and 5.9%, respectively, of our managed care patient accounts receivable. | |||||||
The estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our self-pay patients for the three months ended September 30, 2014 and 2013 were approximately $135 million and $116 million, respectively, and for the nine months ended September 30, 2014 and 2013 were approximately $488 million and $342 million, respectively. Our estimated costs (based on the selected operating expenses described above) of caring for charity care patients for the three months ended September 30, 2014 and 2013 were approximately $42 million and $32 million, respectively, and for the nine months ended September 30, 2014 and 2013 were approximately $137 million and $95 million, respectively. Most states include an estimate of the cost of charity care in the determination of a hospital’s eligibility for Medicaid disproportionate share hospital (“DSH”) payments. Revenues attributable to DSH payments and other state-funded subsidy payments for the three months ended September 30, 2014 and 2013 were approximately $178 million and $72 million, respectively, and for the nine months ended September 30, 2014 and 2013 were approximately $493 million and $257 million, respectively. These payments are intended to mitigate our cost of uncompensated care, as well as reduced Medicaid funding levels. | |||||||
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Discontinued Operation, Additional Disclosures [Abstract] | ' | ||||||||||||
DISCONTINUED OPERATIONS | ' | ||||||||||||
NOTE 3. DISCONTINUED OPERATIONS | |||||||||||||
Net operating revenues and loss before income taxes reported in discontinued operations are as follows: | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Net operating revenues | $ | 1 | $ | 3 | $ | 2 | $ | 6 | |||||
Net loss before income taxes | -2 | -10 | -35 | -7 | |||||||||
Net loss before income taxes from discontinued operations in the nine months ended September 30, 2014 included approximately $18 million of expense recorded in litigation and investigation costs allocable to one of our previously divested hospitals related to a class action lawsuit discussed in Note 10. In the nine months ended September 30, 2013, we recognized a $7 million gain in discontinued operations related to the sale of land. | |||||||||||||
Should we dispose of additional hospitals or other assets in the future, we may incur asset impairment and restructuring charges in future periods. | |||||||||||||
IMPAIRMENT_AND_RESTRUCTURING_C
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | 9 Months Ended | |||
Sep. 30, 2014 | ||||
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | ' | |||
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | ' | |||
NOTE 4. IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | ||||
During the nine months ended September 30, 2014, we recorded impairment and restructuring charges and acquisition-related costs of $90 million, consisting of $14 million of employee severance costs, $6 million of contract and lease termination fees, $19 million of restructuring costs, and $51 million in acquisition-related costs, which include $7 million of transaction costs and $44 million of acquisition integration charges. | ||||
During the nine months ended September 30, 2013, we recorded impairment and restructuring charges and acquisition-related costs of $45 million, consisting of $2 million relating to the impairment of property, $10 million of restructuring costs, $9 million of employee severance costs, $1 million in lease termination fees, and $23 million in acquisition-related costs. | ||||
Our impairment tests presume stable, improving or, in some cases, declining operating results in our hospitals, which are based on programs and initiatives being implemented that are designed to achieve the hospital’s most recent projections. If these projections are not met, or if in the future negative trends occur that impact our future outlook, impairments of long-lived assets and goodwill may occur, and we may incur additional restructuring charges, which could be material. | ||||
As of September 30, 2014, our continuing operations consisted of two operating segments, our hospital and other operations and our Conifer subsidiary. During the three months ended March 31, 2014, we combined our California region and our Phoenix market to form our Western region. Our hospital and other operations are currently structured as follows: | ||||
· | Our Central region includes all of our hospitals and other operations in Missouri, New Mexico, Tennessee and Texas, except for those in the Resolute Health, San Antonio and South Texas markets; | |||
· | Our Florida region includes all of our hospitals and other operations in Florida; | |||
· | Our Northeast region includes all of our hospitals and other operations in Illinois, Massachusetts and Pennsylvania; | |||
· | Our Southern region includes all of our hospitals and other operations in Alabama, Georgia, North Carolina and South Carolina; | |||
· | Our Western region includes all of our hospitals and other operations in Arizona and California; | |||
· | Our Detroit market includes all of our hospitals and other operations in the Detroit, Michigan area; | |||
· | Our Resolute Health market includes our hospital and other operations in the New Braunfels, Texas area; | |||
· | Our San Antonio market includes all of our hospitals and other operations in the San Antonio, Texas area; and | |||
· | Our South Texas market includes all of our hospitals and other operations in the Brownsville and Harlingen, Texas areas. | |||
These regions and markets are reporting units used to perform our goodwill impairment analysis and are one level below our hospital operations reportable business segment level. | ||||
We periodically incur costs to implement restructuring efforts for specific operations, which are recorded in our statement of operations as they are incurred. Our restructuring plans focus on various aspects of operations, including aligning our operations in the most strategic and cost-effective structure. Certain restructuring and acquisition-related costs are based on estimates. Changes in estimates are recognized as they occur. | ||||
LONGTERM_DEBT_AND_LEASE_OBLIGA
LONG-TERM DEBT AND LEASE OBLIGATIONS | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ||||||
NOTE 5. LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||
The table below shows our long-term debt as of September 30, 2014 and December 31, 2013: | |||||||
September 30, | December 31, | ||||||
2014 | 2013 | ||||||
Senior notes: | |||||||
97/8%, due 2014 | $ | — | $ | 60 | |||
91/4%, due 2015 | — | 474 | |||||
5%, due 2019 | 1,100 | — | |||||
51/%, due 2019 | 500 | — | |||||
63/4%, due 2020 | 300 | 300 | |||||
8%, due 2020 | 750 | 750 | |||||
81/8%, due 2022 | 2,800 | 2,800 | |||||
67/8%, due 2031 | 430 | 430 | |||||
Senior secured notes: | |||||||
61/4%, due 2018 | 1,041 | 1,041 | |||||
43/4%, due 2020 | 500 | 500 | |||||
6%, due 2020 | 1,800 | 1,800 | |||||
41/2%, due 2021 | 850 | 850 | |||||
43/8%, due 2021 | 1,050 | 1,050 | |||||
Credit facility due 2016 | — | 405 | |||||
Capital leases and mortgage notes | 453 | 417 | |||||
Unamortized note discounts and premium | -21 | -28 | |||||
Total long-term debt | 11,553 | 10,849 | |||||
Less current portion | 98 | 153 | |||||
Long-term debt, net of current portion | $ | 11,455 | $ | 10,696 | |||
Credit Agreement | |||||||
We have a senior secured revolving credit facility (as amended, “Credit Agreement”) that provides, subject to borrowing availability, for revolving loans in an aggregate principal amount of up to $1 billion, with a $300 million subfacility for standby letters of credit. The Credit Agreement, which has a scheduled maturity date of November 29, 2016, is collateralized by patient accounts receivable of all of our wholly owned acute care and specialty hospitals. In addition, borrowings under the Credit Agreement are guaranteed by our wholly owned hospital subsidiaries. Outstanding revolving loans accrue interest at a base rate plus a margin ranging from 1.00% to 1.50% or the London Interbank Offered Rate plus a margin ranging from 2.00% to 2.50% per annum based on available credit. An unused commitment fee payable on the undrawn portion of the revolving loans ranges from 0.375% to 0.500% per annum based on available credit. Our borrowing availability is based on a specified percentage of eligible accounts receivable, including self-pay accounts. At September 30, 2014, we had no cash borrowings outstanding under the revolving credit facility; however, we had approximately $6 million of standby letters of credit outstanding. Based on our eligible receivables, approximately $994 million was available for borrowing under the revolving credit facility at September 30, 2014. | |||||||
Letter of Credit Facility | |||||||
On March 7, 2014, we entered into a new letter of credit facility agreement (“LC Facility”) that provides for the issuance of standby and documentary letters of credit (including certain letters of credit issued under our existing Credit Agreement, which we transferred to the LC Facility (the “Existing Letters of Credit”)), from time to time, in an aggregate principal amount of up to $180 million (subject to increase to up to $200 million). The LC Facility has a scheduled maturity date of March 7, 2017, and obligations thereunder are guaranteed by and secured by a first priority pledge of the capital stock and other ownership interests of certain of our hospital subsidiaries on an equal ranking basis with our existing senior secured notes. | |||||||
Drawings under any letter of credit issued under the LC Facility (including the Existing Letters of Credit) that we have not reimbursed within three business days after notice thereof will accrue interest at a base rate plus a margin equal to 0.875% per annum. An unused commitment fee is payable at an initial rate of 0.50% per annum with a step down to 0.375% per annum based on the secured debt to EBITDA ratio of 3.00 to 1.00. A per annum fee on the aggregate outstanding amount of issued but undrawn letters of credit (including Existing Letters of Credit) will accrue at a rate of 1.875% per annum. An issuance fee equal to 0.125% per annum of the aggregate face amount of each outstanding letter of credit is payable to the account of the issuer of the related letter of credit. At September 30, 2014, we had approximately $115 million of standby letters of credit outstanding under the LC Facility. | |||||||
Senior Notes | |||||||
In September 2014, we sold $500 million aggregate principal amount of 51/2% senior notes, which will mature on March 1, 2019. We will pay interest on the notes semi-annually in arrears on March 1 and September 1 of each year, commencing on March 1, 2015. The proceeds from the sale of the notes were used for general corporate purposes, including the repayment of indebtedness and drawings under our Credit Agreement, related transaction fees and expenses, and acquisitions. | |||||||
In June and March 2014, we sold $500 million and $600 million aggregate principal amount, respectively, of 5% senior notes, which will mature on March 1, 2019. We will pay interest on the notes semi-annually in arrears on March 1 and September 1 of each year, which payments commenced on September 1, 2014. The net proceeds from the sale of the notes in June 2014 were used to redeem our 91/4% senior notes due 2015 in July 2014. In connection with the redemption, we recorded a loss from early extinguishment of debt of approximately $24 million, primarily related to the difference between the redemption price and the par value of the notes, as well as the write-off of associated unamortized note discounts and issuance costs. The net proceeds from the sale of the notes in March 2014 were used for general corporate purposes, including the repayment of borrowings under our Credit Agreement. | |||||||
All of our senior notes are general unsecured senior debt obligations that rank equally in right of payment with all of our other unsecured senior indebtedness, but are effectively subordinated to our senior secured notes described in our Annual Report, the obligations of our subsidiaries, and any obligations under our Credit Agreement and the LC Facility to the extent of the collateral. Our Annual Report also describes the covenants and conditions, as well as other provisions, including our redemption rights, set forth in the indentures governing our senior notes. | |||||||
GUARANTEES
GUARANTEES | 9 Months Ended |
Sep. 30, 2014 | |
GUARANTEES | ' |
GUARANTEES | ' |
NOTE 6. GUARANTEES | |
At September 30, 2014, the maximum potential amount of future payments under our income guarantees to certain physicians who agree to relocate and revenue collection guarantees to hospital-based physician groups providing certain services at our hospitals was $92 million. We had a liability of $69 million recorded for these guarantees included in other current liabilities at September 30, 2014. | |
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | |||||||||||||
EMPLOYEE BENEFIT PLANS | ' | |||||||||||||
NOTE 7. EMPLOYEE BENEFIT PLANS | ||||||||||||||
At September 30, 2014, approximately 5.2 million shares of common stock were available under our 2008 Stock Incentive Plan for future stock option grants and other incentive awards, including restricted stock units. Options have an exercise price equal to the fair market value of the shares on the date of grant and generally expire 10 years from the date of grant. A restricted stock unit is a contractual right to receive one share of our common stock or the equivalent value in cash in the future. Options and restricted stock units typically vest one-third on each of the first three anniversary dates of the grant; however, from time to time, we grant (i) options and restricted stock units with different time-based vesting terms, and (ii) performance-based options and restricted stock units that vest subject to the achievement of specified performance goals within a specified timeframe. | ||||||||||||||
Our income from continuing operations for the nine months ended September 30, 2014 and 2013 includes $38 million and $29 million, respectively, of pre-tax compensation costs related to our stock-based compensation arrangements recorded in salaries, wages and benefits in the accompanying Condensed Consolidated Statements of Operations. | ||||||||||||||
Stock Options | ||||||||||||||
The following table summarizes stock option activity during the nine months ended September 30, 2014: | ||||||||||||||
Weighted Average | ||||||||||||||
Exercise Price | Aggregate | Weighted Average | ||||||||||||
Options | Per Share | Intrinsic Value | Remaining Life | |||||||||||
(In Millions) | ||||||||||||||
Outstanding as of December 31, 2013 | 3,308,111 | $ | 30.79 | |||||||||||
Granted | — | |||||||||||||
Exercised | -691,050 | 33.72 | ||||||||||||
Forfeited/Expired | -624,052 | 47.97 | ||||||||||||
Outstanding as of September 30, 2014 | 1,993,009 | $ | 24.40 | $ | 70 | 3.9 | years | |||||||
Vested and expected to vest at September 30, 2014 | 1,984,562 | $ | 24.31 | $ | 70 | 3.9 | years | |||||||
Exercisable as of September 30, 2014 | 1,587,878 | $ | 21.90 | $ | 60 | 3.7 | years | |||||||
There were 691,050 stock options exercised during the nine months ended September 30, 2014 with a $13 million aggregate intrinsic value, and 913,369 stock options exercised during the same period in 2013 with a $17 million aggregate intrinsic value. | ||||||||||||||
As of September 30, 2014, there were $2 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 1.1 years. | ||||||||||||||
There were no stock options granted in the nine months ended September 30, 2014. In the nine months ended September 30, 2013, we granted an aggregate of 295,639 stock options under our 2008 Stock Incentive Plan to certain of our senior officers. These stock options will all vest on the third anniversary of the grant date, subject to the terms of the Plan, and will expire on the fifth anniversary of the grant date. | ||||||||||||||
The weighted average estimated fair value of stock options we granted in the nine months ended September 30, 2013 was $14.46 per share. This fair value was calculated based on the grant date, using a binomial lattice model with the following assumptions: | ||||||||||||||
Nine Months Ended | ||||||||||||||
September 30, 2013 | ||||||||||||||
Expected volatility | 50% | |||||||||||||
Expected dividend yield | 0% | |||||||||||||
Expected life | 3.6 years | |||||||||||||
Expected forfeiture rate | 6% | |||||||||||||
Risk-free interest rate | 0.48% | |||||||||||||
Early exercise threshold | 100% gain | |||||||||||||
Early exercise rate | 50% per year | |||||||||||||
The expected volatility used in the binomial lattice model incorporated historical and implied share-price volatility and was based on an analysis of historical prices of our stock and open-market exchanged options. The expected volatility reflects the historical volatility for a duration consistent with the contractual life of the options, and the volatility implied by the trading of options to purchase our stock on open-market exchanges. The historical share-price volatility excludes the movements in our stock price on two dates (one in 2010 and one in 2011) with unusual volatility due to an unsolicited acquisition proposal. The expected life of options granted is derived from the output of the binomial lattice model and represents the period of time that the options are expected to be outstanding. This model incorporates an early exercise assumption in the event of a significant increase in stock price. The risk-free interest rates are based on zero-coupon United States Treasury yields in effect at the date of grant consistent with the expected exercise timeframes. | ||||||||||||||
The following table summarizes information about our outstanding stock options at September 30, 2014: | ||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||
Weighted Average | ||||||||||||||
Number of | Remaining | Weighted Average | Number of | Weighted Average | ||||||||||
Range of Exercise Prices | Options | Contractual Life | Exercise Price | Options | Exercise Price | |||||||||
$0.00 to $4.569 | 242,753 | 4.4 | years | $ | 4.56 | 242,753 | $ | 4.56 | ||||||
$4.57 to $25.089 | 957,583 | 5.2 | years | 20.96 | 830,903 | 20.67 | ||||||||
$25.09 to $32.569 | 402,816 | 1.9 | years | 29.32 | 402,816 | 29.32 | ||||||||
$32.57 to $42.089 | 389,857 | 2.5 | years | 40.10 | 111,406 | 42.08 | ||||||||
1,993,009 | 3.9 | years | $ | 24.40 | 1,587,878 | $ | 21.90 | |||||||
Restricted Stock Units | ||||||||||||||
The following table summarizes restricted stock unit activity during the nine months ended September 30, 2014: | ||||||||||||||
Restricted Stock | Weighted Average Grant | |||||||||||||
Units | Date Fair Value Per Unit | |||||||||||||
Unvested as of December 31, 2013 | 2,707,222 | $ | 33.34 | |||||||||||
Granted | 1,768,508 | 48.41 | ||||||||||||
Vested | -900,763 | 36.51 | ||||||||||||
Forfeited | -140,468 | 35.23 | ||||||||||||
Unvested as of September 30, 2014 | 3,434,499 | $ | 41.85 | |||||||||||
In the nine months ended September 30, 2014, we granted 1,045,750 restricted stock units subject to time-vesting of which 944,249 will vest and be settled ratably over a three-year period from the date of the grant, 23,435 will vest 100% on the tenth anniversary of the grant date, 63,623 will vest 100% on the fifth anniversary of the grant date and 14,443 will vest 100% on the third anniversary of the grant date. In addition, we granted 271,815 performance-based restricted stock units to certain of our senior officers; the vesting of these restricted stock units is contingent on our achievement of a specified one-year performance goal for the year ending December 31, 2014. Provided the goal is achieved, the performance-based restricted stock units will vest ratably over a three-year period from the grant date. If the performance goal is not achieved, the restricted stock units will be forfeited. The actual number of performance-based restricted stock units that could vest will range from 0% to 200% of the 271,815 units granted, depending on our level of achievement with respect to the performance goal. We also granted 450,943 special retention restricted stock units to a select group of officers; two-thirds of the award will vest contingent on our achievement of a performance goal of which one-half will vest based on performance over a one-year period ending in December 2015 and the remaining one-half will vest based on performance over a four-year period ending in December 2018. The remaining one-third of this special retention award will vest in full on the fifth anniversary of the grant date. | ||||||||||||||
In the nine months ended September 30, 2013, we granted 815,262 restricted stock units subject to time-vesting, of which 735,129 will vest and be settled ratably over a three-year period from the grant date and 80,133 will vest 100% on the fifth anniversary of the grant date. In addition, we granted 206,058 performance-based restricted stock units to certain of our senior officers. Because the performance goal for the year ended December 31, 2013 was met at the target level, 100% of the performance-based restricted stock units will vest and be settled ratably over a three-year period from the grant date. We also awarded a grant of 212,180 restricted stock units to our chief executive officer, of which 106,090 are subject to time-vesting and 106,090 are performance-based. If target conditions are met, 50% of this grant will vest three years from the grant date and the remaining 50% will vest six years from the grant date. The award also allows for an additional 106,090 shares to be issued if higher performance criteria are met. | ||||||||||||||
As of September 30, 2014, there were $107 million of total unrecognized compensation costs related to restricted stock units. These costs are expected to be recognized over a weighted average period of 3.0 years. | ||||||||||||||
EQUITY
EQUITY | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||
EQUITY | ' | |||||||||||||||||||||||
EQUITY | ' | |||||||||||||||||||||||
NOTE 8. EQUITY | ||||||||||||||||||||||||
Changes in Shareholders’ Equity | ||||||||||||||||||||||||
The following table shows the changes in consolidated equity during the nine months ended September 30, 2014 and 2013 (dollars in millions, share amounts in thousands): | ||||||||||||||||||||||||
Tenet Healthcare Corporation Shareholders’ Equity | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||||
Shares | Issued Par | Paid-in | Comprehensive | Accumulated | Treasury | Noncontrolling | ||||||||||||||||||
Outstanding | Amount | Capital | Loss | Deficit | Stock | Interests | Total Equity | |||||||||||||||||
Balances at December 31, 2013 | 96,860 | $ | 7 | $ | 4,572 | $ | -24 | $ | -1,422 | $ | -2,378 | $ | 123 | $ | 878 | |||||||||
Net income (loss) | — | — | — | — | -49 | — | 20 | -29 | ||||||||||||||||
Distributions paid to noncontrolling interests | — | — | — | — | — | — | -27 | -27 | ||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | 5 | 5 | ||||||||||||||||
Other comprehensive income | — | — | — | 4 | — | — | — | 4 | ||||||||||||||||
Purchases (sales) of businesses or joint venture interests | — | — | -22 | — | — | — | 10 | -12 | ||||||||||||||||
Stock-based compensation expense and issuance of common stock | 1,364 | — | 47 | — | — | — | — | 47 | ||||||||||||||||
Balances at September 30, 2014 | 98,224 | $ | 7 | $ | 4,597 | $ | -20 | $ | -1,471 | $ | -2,378 | $ | 131 | $ | 866 | |||||||||
Balances at December 31, 2012 | 104,633 | $ | 7 | $ | 4,471 | $ | -68 | $ | -1,288 | $ | -1,979 | $ | 75 | $ | 1,218 | |||||||||
Net income (loss) | — | — | — | — | -110 | — | 13 | -97 | ||||||||||||||||
Distributions paid to noncontrolling interests | — | — | — | — | — | — | -16 | -16 | ||||||||||||||||
Sales of joint venture interests | — | — | 53 | — | — | — | — | 53 | ||||||||||||||||
Purchases of businesses or joint venture interests | — | — | — | — | — | — | 23 | 23 | ||||||||||||||||
Repurchase of common stock | -7,095 | — | — | — | — | -300 | — | -300 | ||||||||||||||||
Stock-based compensation expense and issuance of common stock | 1,628 | — | 38 | — | — | 1 | — | 39 | ||||||||||||||||
Balances at September 30, 2013 | 99,166 | $ | 7 | $ | 4,562 | $ | -68 | $ | -1,398 | $ | -2,278 | $ | 95 | $ | 920 | |||||||||
Changes in Redeemable Noncontrolling Interests in Equity of Consolidated Subsidiaries | ||||||||||||||||||||||||
The following table shows the changes in redeemable noncontrolling interests in equity of consolidated subsidiaries during the nine months ended September 30, 2014 and 2013: | ||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Balances at beginning of period | $ | 340 | $ | 16 | ||||||||||||||||||||
Net income | 24 | 7 | ||||||||||||||||||||||
Distributions paid to noncontrolling interests | -3 | -2 | ||||||||||||||||||||||
Contributions from noncontrolling interests | 10 | — | ||||||||||||||||||||||
Sales of joint venture interests | — | 52 | ||||||||||||||||||||||
Purchases of businesses | 25 | 10 | ||||||||||||||||||||||
Balances at end of period | $ | 396 | $ | 83 | ||||||||||||||||||||
PROPERTY_AND_PROFESSIONAL_AND_
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | 9 Months Ended |
Sep. 30, 2014 | |
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | ' |
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | ' |
NOTE 9. PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | |
Property Insurance | |
We have property, business interruption and related insurance coverage to mitigate the financial impact of catastrophic events or perils that is subject to deductible provisions based on the terms of the policies. These policies are on an occurrence basis. | |
Professional and General Liability Reserves | |
At September 30, 2014 and December 31, 2013, the aggregate current and long-term professional and general liability reserves in our accompanying Condensed Consolidated Balance Sheets were approximately $700 million and $711 million, respectively. These reserves include the reserves recorded by our captive insurance subsidiaries and our self-insured retention reserves recorded based on actuarial estimates for the portion of our professional and general liability risks, including incurred but not reported claims, for which we do not have insurance coverage. We estimated the reserves for losses and related expenses using expected loss-reporting patterns discounted to their present value under a risk-free rate approach using a Federal Reserve seven-year maturity rate of 2.22% at September 30, 2014 and 2.45% at December 31, 2013. | |
If the aggregate limit of any of our professional and general liability policies is exhausted, in whole or in part, it could deplete or reduce the limits available to pay any other material claims applicable to that policy period. | |
Included in other operating expenses, net, in the accompanying Condensed Consolidated Statements of Operations is malpractice expense of $170 million and $71 million for the nine months ended September 30, 2014 and 2013, respectively. | |
CLAIMS_AND_LAWSUITS
CLAIMS AND LAWSUITS | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
CLAIMS AND LAWSUITS | ' | ||||||||||||
CLAIMS AND LAWSUITS | ' | ||||||||||||
NOTE 10. CLAIMS AND LAWSUITS | |||||||||||||
We operate in a highly regulated and litigious industry. As a result, we commonly become involved in disputes, litigation and regulatory matters incidental to our operations, including governmental investigations, personal injury lawsuits, employment claims and other matters arising out of the normal conduct of our business. | |||||||||||||
We record accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and we can reasonably estimate the amount of the loss or a range of loss. If a loss on a material matter is reasonably possible and estimable, we disclose an estimate of the loss or a range of loss. In cases where we have not disclosed an estimate, we have concluded that the loss is either not reasonably possible or the loss, or a range of loss, is not reasonably estimable, based on available information. | |||||||||||||
Governmental Reviews | |||||||||||||
Healthcare companies are subject to numerous investigations by various governmental agencies. Further, private parties have the right to bring qui tam or “whistleblower” lawsuits against companies that allegedly submit false claims for payments to, or improperly retain overpayments from, the government and, in some states, private payers. Certain of our individual facilities have received inquiries from government agencies, and our facilities may receive such inquiries in future periods. The following material governmental reviews, which have been previously reported, are currently pending. | |||||||||||||
· | Kyphoplasty—From March 2009 through July 2010, seven of our hospitals became the subject of a review by the U.S. Department of Justice (“DOJ”) and certain other federal agencies regarding the appropriateness of inpatient treatment for Medicare patients receiving kyphoplasty, which is a surgical procedure used to treat certain spinal conditions. In January 2013, we paid $900,000 to settle claims against one of our hospitals subject to this review, and, in April 2014, we confirmed that another hospital is no longer the subject of investigation. In September 2014, subject to negotiation of final settlement terms, we reached a verbal financial agreement with the government to settle this matter with respect to the remaining five hospitals for approximately $2 million, which has been fully reserved as of September 30, 2014. | ||||||||||||
· | Implantable Cardioverter Defibrillators (“ICDs”)—We are engaged in potential settlement discussions with the DOJ to resolve an investigation to determine whether ICD procedures performed at 56 of our hospitals from 2002 to 2010 complied with Medicare coverage requirements. It is impossible at this time to predict with any certainty the outcome of those discussions or the amount of any potential resolution. However, based on current discussions, we believe the amount of the reserve management has established for this matter, as described below, continues to reflect our current estimate of probable liability for all of the hospitals under review as part of the government’s examination, which commenced in March 2010. | ||||||||||||
· | Clinica de la Mama Investigations and Qui Tam Action—As previously reported, we received a subpoena in May 2012 from the Office of Inspector General (“OIG”) of U.S. Department of Health and Human Services in Atlanta seeking documents from January 2004 through May 2012 related to the relationship that certain of our Georgia and South Carolina hospitals had with Hispanic Medical Management, Inc. (“HMM”). HMM was an unaffiliated entity that owned and operated clinics that provided, among other things, prenatal care predominantly to uninsured patients. The hospitals contracted with HMM for translation, marketing, management and Medicaid eligibility determination services. The civil investigation is being conducted by the Civil Division of the DOJ, the U.S. Attorney’s Office for the Middle District of Georgia and the Georgia Attorney General’s Office, while the parallel criminal investigation is being conducted by the Criminal Division of the DOJ and the U.S. Attorney’s Office for the Northern District of Georgia. | ||||||||||||
The investigations arose out of a qui tam action captioned United States of America, ex. rel. Ralph D. Williams v. Health Management Associates, Inc., et al. filed in the U.S. District Court for the Middle District of Georgia. Tenet and four of its hospital subsidiaries are defendants in the qui tam action, which alleges that the arrangements the hospitals had with HMM violated the federal and state anti-kickback statutes and false claims acts. Both the Georgia Attorney General’s Office, on behalf of the State of Georgia, and the U.S. Attorney’s Office, on behalf of the United States, have intervened in the qui tam action. We submitted answers to the complaints filed by the relator, the State of Georgia and the United States on July 15, 2014 following the court’s denial of our motions to dismiss in June 2014. The parties have agreed to stay discovery in the case until March 31, 2015. | |||||||||||||
If we or our subsidiaries were determined to have violated the anti-kickback statutes, the government could require us to reimburse related government program payments received during the subject period, assess civil monetary penalties including treble damages, exclude individuals or subsidiaries from participation in federal healthcare programs, or seek criminal sanctions against current or former employees of our hospital subsidiary companies or the hospital companies themselves. In a Bill of Information filed on July 23, 2014 with the U.S. District Court for the Northern District of Georgia, Atlanta Division, the U.S. Attorney for that District asserted charges of one count of criminal conspiracy against a former owner of HMM (a non-employee of Tenet) related to the agreements between HMM and the Tenet hospitals described above. In a separate Bill of Information also filed with the court on July 23, 2014, the U.S. Attorney asserted charges of one count of criminal conspiracy against a former employee of a Tenet hospital, but such charges relate to an unaffiliated entity. It is impossible at this time to predict with any certainty the amount and terms of any potential resolution of these matters; however, we believe the amount of the reserve established continues to reflect our current estimate of probable liability. We will continue to vigorously defend against the government’s allegations. | |||||||||||||
Except with respect to the matter settled in January 2013 involving one hospital, as discussed above, our analysis of each of these pending reviews is still ongoing, and we are unable to predict with any certainty the progress or final outcome of any discussions with government agencies at this time. Management has established reserves of approximately $38 million in the aggregate for our potential obligations with respect to all of the hospitals under review for their billing practices for kyphoplasty and cardiac defibrillator implantation procedures, as well as the Clinica de la Mama matters. Changes in the reserves may be required in the future as additional information becomes available. We cannot predict the ultimate resolution of any governmental review, and the final amounts paid in settlement or otherwise, if any, could differ materially from our currently recorded reserves. | |||||||||||||
Ordinary Course Matters | |||||||||||||
We are also subject to other claims and lawsuits arising in the ordinary course of business, including potential claims related to, among other things, the care and treatment provided at our hospitals and outpatient facilities, the application of various federal and state labor laws, tax audits and other matters. Although the results of these claims and lawsuits cannot be predicted with certainty, we believe that the ultimate resolution of these ordinary course claims and lawsuits will not have a material effect on our business, financial condition or results of operations. | |||||||||||||
In addition, in October 2014, we received court approval of a final agreement to settle a previously disclosed class action lawsuit captioned Doe, et al. v. Jo Ellen Smith Medical Foundation, which was filed in the Civil District Court for the Parish of Orleans in Louisiana in March 1997. The plaintiffs pursued a claim for tortious invasion of privacy due to the fact that in April 1996 patient identifying records from a psychiatric hospital we closed in 1995 were temporarily placed in an unsecure location while the hospital was undergoing renovations. The court certified a class of over 5,000 persons; however, only eight individuals (in addition to the two plaintiffs) have been identified to date in the class certification process. The plaintiffs have asserted each member of the class is entitled to common damages under a theory of presumed “common damage” regardless of whether or not any members of the class were actually harmed or even aware of the incident. In an effort to avoid protracted litigation, the parties settled this matter in June 2014 for a maximum potential payment of $32.5 million, subject to the number and type of claims asserted by the class members between January 15 and March 31, 2015. The settlement will be funded in amounts and on a schedule to be agreed to by the parties. In the three months ended June 30, 2014, we established a reserve of $17 million, recorded in discontinued operations, to reflect our current estimate of probable liability for this matter based on anticipated levels of class member participation. | |||||||||||||
New claims or inquiries may be initiated against us from time to time. These matters could (1) require us to pay substantial damages or amounts in judgments or settlements, which, individually or in the aggregate, could exceed amounts, if any, that may be recovered under our insurance policies where coverage applies and is available, (2) cause us to incur substantial expenses, (3) require significant time and attention from our management, and (4) cause us to close or sell hospitals or otherwise modify the way we conduct business. | |||||||||||||
The table below presents reconciliations of the beginning and ending liability balances in connection with legal settlements and related costs recorded during the nine months ended September 30, 2014 and 2013: | |||||||||||||
Balances at | Litigation and | Balances at | |||||||||||
Beginning | Investigation | Cash | End of | ||||||||||
of Period | Costs | Payments | Period | ||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||
Continuing operations | $ | 64 | $ | 19 | $ | -10 | $ | 73 | |||||
Discontinued operations | 6 | 18 | -6 | 18 | |||||||||
$ | 70 | $ | 37 | $ | -16 | $ | 91 | ||||||
Nine Months Ended September 30, 2013 | |||||||||||||
Continuing operations | $ | 5 | $ | 3 | $ | -3 | $ | 5 | |||||
Discontinued operations | 5 | 2 | -1 | 6 | |||||||||
$ | 10 | $ | 5 | $ | -4 | $ | 11 | ||||||
For the nine months ended September 30, 2014 and 2013, we recorded costs of $37 million and $5 million, respectively, primarily related to costs associated with various legal proceedings and governmental reviews. | |||||||||||||
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2014 | |
INCOME TAXES | ' |
INCOME TAXES | ' |
NOTE 11. INCOME TAXES | |
During the nine months ended September 30, 2014, we recorded a net income tax benefit of $11 million, which includes, among other things: (1) $3 million of income tax expense to increase our valuation allowance for deferred tax assets; (2) $7 million of income tax benefit related to tax basis adjustments for state tax purposes on the Vanguard acquisition; (3) $4 million of income tax benefit related to certain amended state tax returns; and (4) $4 million of income tax benefit related to other tax adjustments. The increase in the valuation allowance relates to an estimated decrease in the future utilization of certain state net operating loss carryovers. | |
During the nine months ended September 30, 2014, we reduced our estimated liabilities for uncertain tax positions by $3 million, net of related deferred tax assets. The total amount of unrecognized tax benefits as of September 30, 2014 was $40 million, of which $31 million, if recognized, would impact our effective tax rate and income tax expense (benefit) from continuing operations. | |
Our practice is to recognize interest and penalties related to income tax matters in income tax expense in our consolidated statements of operations. Total accrued interest and penalties on unrecognized tax benefits as of September 30, 2014 were $5 million, all of which related to continuing operations. | |
As of September 30, 2014, approximately $2 million of unrecognized federal and state tax benefits, as well as reserves for interest and penalties, may decrease in the next 12 months as a result of the settlement of audits, the filing of amended tax returns or the expiration of statutes of limitations. | |
EARNINGS_LOSS_PER_COMMON_SHARE
EARNINGS (LOSS) PER COMMON SHARE | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
EARNINGS (LOSS) PER COMMON SHARE | ' | ||||||||
EARNINGS (LOSS) PER COMMON SHARE | ' | ||||||||
NOTE 12. EARNINGS (LOSS) PER COMMON SHARE | |||||||||
The table below is a reconciliation of the numerators and denominators of our basic and diluted earnings (loss) per common share calculations for net income (loss) from continuing operations for the three and nine months ended September 30, 2014 and 2013. Net income (loss) is expressed in millions and weighted average shares are expressed in thousands. | |||||||||
Weighted | |||||||||
Net Income | Average | ||||||||
(Loss) | Shares | Per-Share | |||||||
(Numerator) | (Denominator) | Amount | |||||||
Three Months Ended September 30, 2014 | |||||||||
Net income available to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | 10 | 98,036 | $ | 0.10 | ||||
Effect of dilutive stock options, restricted stock units and deferred compensation units | — | 2,890 | — | ||||||
Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | 10 | 100,926 | $ | 0.10 | ||||
Three Months Ended September 30, 2013 | |||||||||
Net income available to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | 33 | 100,894 | $ | 0.33 | ||||
Effect of dilutive stock options, restricted stock units and deferred compensation units | — | 2,204 | -0.01 | ||||||
Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | 33 | 103,098 | $ | 0.32 | ||||
Nine Months Ended September 30, 2014 | |||||||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | -27 | 97,625 | $ | -0.27 | ||||
Effect of dilutive stock options, restricted stock units and deferred compensation units | — | — | — | ||||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | -27 | 97,625 | $ | -0.27 | ||||
Nine Months Ended September 30, 2013 | |||||||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | -106 | 102,669 | $ | -1.03 | ||||
Effect of dilutive stock options, restricted stock units and deferred compensation units | — | — | — | ||||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | -106 | 102,669 | $ | -1.03 | ||||
All potentially dilutive securities were excluded from the calculation of diluted loss per share for the nine months ended September 30, 2014 and 2013 because we did not report income from continuing operations available to shareholders in those periods. In circumstances where we do not have income from continuing operations available to shareholders, the effect of stock options and other potentially dilutive securities is anti-dilutive, that is, a loss from continuing operations available to shareholders has the effect of making the diluted loss per share less than the basic loss per share. Had we generated income from continuing operations available to shareholders in those periods, the effect (in thousands) of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase in shares of 2,332 for the nine months ended September 30, 2014 and 827 for the nine months ended September 30, 2013. | |||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||
NOTE 13. FAIR VALUE MEASUREMENTS | |||||||||||||
Our financial assets and liabilities recorded at fair value on a recurring basis primarily relate to investments in available-for-sale securities held by our captive insurance subsidiaries. The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013. The following tables also indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. We consider a security that trades at least weekly to have an active market. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. | |||||||||||||
Quoted Prices | |||||||||||||
in Active | Significant | ||||||||||||
Markets for | Significant Other | Unobservable | |||||||||||
Identical Assets | Observable Inputs | Inputs | |||||||||||
Investments | September 30, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||
Marketable securities — current | $ | 2 | $ | 2 | $ | — | $ | — | |||||
Investments in Reserve Yield Plus Fund | 2 | — | 2 | — | |||||||||
Marketable debt securities — noncurrent | 62 | 26 | 35 | 1 | |||||||||
$ | 66 | $ | 28 | $ | 37 | $ | 1 | ||||||
Quoted Prices | |||||||||||||
in Active | Significant | ||||||||||||
Markets for | Significant Other | Unobservable | |||||||||||
Identical Assets | Observable Inputs | Inputs | |||||||||||
Investments | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||
Marketable securities — current | $ | 1 | $ | 1 | $ | — | $ | — | |||||
Investments in Reserve Yield Plus Fund | 2 | — | 2 | — | |||||||||
Marketable debt securities — noncurrent | 62 | 23 | 38 | 1 | |||||||||
$ | 65 | $ | 24 | $ | 40 | $ | 1 | ||||||
The fair value of our long-term debt is based on quoted market prices (Level 1). At September 30, 2014 and December 31, 2013, the estimated fair value of our long-term debt was approximately 103.8% and 103.5%, respectively, of the carrying value of the debt. | |||||||||||||
ACQUISITIONS
ACQUISITIONS | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
ACQUISITIONS | ' | ||||||||||||
ACQUISITIONS | ' | ||||||||||||
NOTE 14. ACQUISITIONS | |||||||||||||
During the nine months ended September 30, 2014, we acquired a majority interest in Texas Regional Medical Center at Sunnyvale, a 70-bed hospital in Sunnyvale, Texas, a suburban community east of Dallas, and completed our acquisition of Emanuel Medical Center, a 209-bed hospital in Turlock, California, located approximately 100 miles southeast of San Francisco. We also acquired four ambulatory surgery centers, three urgent care centers, one diagnostic imaging center and various physician practice entities in the same period. The fair value of the consideration conveyed in the acquisitions (the “purchase price”) was $185 million. | |||||||||||||
We are required to allocate the purchase prices of the acquired businesses to assets acquired or liabilities assumed and, if applicable, noncontrolling interests based on their fair values. The excess of the purchase price allocation over those fair values is recorded as goodwill. We are in process of finalizing the purchase price allocations, including valuations of the acquired property and equipment, primarily for several recent acquisitions; therefore, those purchase price allocations are subject to adjustment once the valuations are completed. | |||||||||||||
Preliminary purchase price allocations for the acquisitions made during the nine months ended September 30, 2014 are as follows: | |||||||||||||
Current assets | $ | 19 | |||||||||||
Property and equipment | 104 | ||||||||||||
Goodwill | 137 | ||||||||||||
Current liabilities | -21 | ||||||||||||
Long-term liabilities | -19 | ||||||||||||
Redeemable noncontrolling interests | -21 | ||||||||||||
Noncontrolling interests | -14 | ||||||||||||
Net cash paid | $ | 185 | |||||||||||
The goodwill generated from these transactions, the majority of which will be deductible for income tax purposes, can be attributed to the benefits that we expect to realize from operating efficiencies and increased reimbursement. Approximately $7 million in transaction costs related to prospective and closed acquisitions were expensed during the nine months ended September 30, 2014, and are included in impairment and restructuring charges, and acquisition-related costs in the accompanying Condensed Consolidated Statement of Operations. | |||||||||||||
Acquisition of Vanguard | |||||||||||||
Effective October 1, 2013, we acquired the common stock of Vanguard for $21 per share in an all cash transaction. Vanguard owned and operated 28 hospitals (plus one more under construction, which was recently completed), 39 outpatient centers and five health plans with approximately 140,000 members, serving communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas. We paid approximately $4.3 billion to acquire Vanguard, including the assumption of $2.5 billion of Vanguard’s net debt. We have completed the analysis required to finalize the purchase price allocation for this acquisition and related disclosures. We have revised our Condensed Consolidated Balance Sheet as of December 31, 2013 to reflect the impact of these adjustments. | |||||||||||||
The purchase price allocation for our Vanguard acquisition is as follows: | |||||||||||||
Current assets | $ | 976 | |||||||||||
Property and equipment | 2,830 | ||||||||||||
Other long term assets | 152 | ||||||||||||
Other intangible assets | 155 | ||||||||||||
Goodwill | 2,460 | ||||||||||||
Current liabilities | -1,193 | ||||||||||||
Deferred taxes-long term | -103 | ||||||||||||
Other long-term liabilities | -3,711 | ||||||||||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | -258 | ||||||||||||
Noncontrolling interests | -7 | ||||||||||||
Net cash paid | $ | 1,301 | |||||||||||
Pro Forma Information—Unaudited | |||||||||||||
The following table provides certain pro forma financial information for Tenet as if the Vanguard acquisition had occurred at the beginning of the year ended December 31, 2013: | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Net operating revenues | $ | 4,179 | $ | 3,748 | $ | 12,147 | $ | 11,574 | |||||
Net income (loss) from continuing operations, before income taxes | $ | 1 | $ | -220 | $ | 6 | $ | -418 | |||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||
NOTE 15. SEGMENT INFORMATION | |||||||||||||
Our core business is hospital operations and other, which is focused on owning and operating acute care hospitals and outpatient facilities. We also own various related healthcare businesses. At September 30, 2014, our subsidiaries operated 80 hospitals, with a total of 20,762 licensed beds, primarily serving urban and suburban communities, as well as 198 outpatient centers and six health plans. | |||||||||||||
We operate revenue cycle management and patient communications and engagement services businesses under our Conifer subsidiary. In addition, Conifer operates a management services business that supports value-based performance through clinical integration, financial risk management and population health management. At September 30, 2014, Conifer provided services to more than 700 Tenet and non-Tenet hospital and other clients nationwide. Conifer’s two largest customers, Tenet and Catholic Health Initiatives, together comprised 82% and 78% of Conifer’s net operating revenues for the nine months ended September 30, 2014 and 2013, respectively. | |||||||||||||
The following tables include amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations: | |||||||||||||
September 30, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Assets: | |||||||||||||
Hospital operations and other | $ | 16,988 | $ | 16,194 | |||||||||
Conifer | 324 | 256 | |||||||||||
Total | $ | 17,312 | $ | 16,450 | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Capital expenditures: | |||||||||||||
Hospital operations and other | $ | 207 | $ | 139 | $ | 717 | $ | 387 | |||||
Conifer | 4 | 3 | 17 | 11 | |||||||||
Total | $ | 211 | $ | 142 | $ | 734 | $ | 398 | |||||
Net operating revenues: | |||||||||||||
Hospital operations and other | $ | 4,031 | $ | 2,275 | $ | 11,707 | $ | 6,840 | |||||
Conifer | |||||||||||||
Tenet | 148 | 92 | 426 | 278 | |||||||||
Other customers | 148 | 133 | 440 | 377 | |||||||||
4,327 | 2,500 | 12,573 | 7,495 | ||||||||||
Intercompany eliminations | -148 | -92 | -426 | -278 | |||||||||
Total | $ | 4,179 | $ | 2,408 | $ | 12,147 | $ | 7,217 | |||||
Adjusted EBITDA: | |||||||||||||
Hospital operations and other | $ | 412 | $ | 252 | $ | 1,167 | $ | 802 | |||||
Conifer | 47 | 36 | 139 | 96 | |||||||||
Total | $ | 459 | $ | 288 | $ | 1,306 | $ | 898 | |||||
Depreciation and amortization: | |||||||||||||
Hospital operations and other | $ | 202 | $ | 114 | $ | 594 | $ | 339 | |||||
Conifer | 5 | 5 | 15 | 15 | |||||||||
Total | $ | 207 | $ | 119 | $ | 609 | $ | 354 | |||||
Adjusted EBITDA | $ | 459 | $ | 288 | $ | 1,306 | $ | 898 | |||||
Depreciation and amortization | -207 | -119 | -609 | -354 | |||||||||
Impairment and restructuring charges, and acquisition-related costs | -37 | -20 | -90 | -45 | |||||||||
Litigation and investigation costs | -4 | -1 | -19 | -3 | |||||||||
Interest expense | -186 | -91 | -558 | -292 | |||||||||
Loss from early extinguishment of debt | -24 | — | -24 | -348 | |||||||||
Investment earnings | — | — | — | 1 | |||||||||
Net income (loss) from continuing operations before income taxes | $ | 1 | $ | 57 | $ | 6 | $ | -143 | |||||
RECENTLY_ISSUED_ACCOUNTING_STA
RECENTLY ISSUED ACCOUNTING STANDARDS | 9 Months Ended |
Sep. 30, 2014 | |
RECENTLY ISSUED ACCOUNTING STANDARDS | ' |
RECENTLY ISSUED ACCOUNTING STANDARDS | ' |
NOTE 16. RECENTLY ISSUED ACCOUNTING STANDARDS | |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08”). ASU 2014-08 changes the requirements for reporting discontinued operations in FASB Accounting Standards Codification Subtopic 205-20, such that a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. ASU 2014-08 requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position, as well as additional disclosures about discontinued operations. Additionally, ASU 2014-08 requires disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements and expands the disclosures about an entity’s significant continuing involvement with a discontinued operation. We are currently evaluating the potential impact of this guidance, which will be effective for us beginning in 2015. | |
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We are currently evaluating the potential impact of this guidance, which will be effective for us beginning in 2017. | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | ' |
NOTE 17. SUBSEQUENT EVENTS | |
Acquisition of Revenue Cycle Services for Physician Practices—In October 2014, Conifer acquired SPi Healthcare, a provider of revenue cycle management, health information management and software solutions for independent and provider-owned physician practices. The base purchase price was $235 million. We have not yet finalized the analysis required to complete the purchase price allocation for this acquisition and the related disclosures. | |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
BASIS OF PRESENTATION | ' | |||||||||
Basis of Presentation | ' | |||||||||
Description of Business and Basis of Presentation | ||||||||||
Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is a national, diversified healthcare services company. As of September 30, 2014, we operated 80 hospitals, 198 outpatient centers, six health plans and Conifer Health Solutions, LLC (“Conifer”), which provides healthcare business process services in the areas of revenue cycle management, value-based care and patient communications. | ||||||||||
Effective October 1, 2013, we acquired the common stock of Vanguard Health Systems, Inc. (“Vanguard”) for $21 per share in an all cash transaction. Vanguard owned and operated 28 hospitals (plus one more under construction, which was recently completed), 39 outpatient centers and five health plans with approximately 140,000 members, serving communities in Arizona, California, Illinois, Massachusetts, Michigan and Texas. We paid approximately $4.3 billion to acquire Vanguard, including the assumption of $2.5 billion of Vanguard’s net debt. | ||||||||||
This quarterly report supplements our Annual Report on Form 10-K for the year ended December 31, 2013 (“Annual Report”). As permitted by the Securities and Exchange Commission for interim reporting, we have omitted certain notes and disclosures that substantially duplicate those in our Annual Report. For further information, refer to the audited Consolidated Financial Statements and notes included in our Annual Report. Unless otherwise indicated, all financial and statistical data included in these notes to our Condensed Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). The accompanying Condensed Consolidated Balance Sheet as of December 31, 2013 was derived from the audited consolidated financial statements included in our Annual Report, but has been revised to reflect the impact of completing the purchase price allocation for the acquisition of Vanguard, as described in Note 14. Additionally, certain prior-year amounts have been adjusted to conform to the current-year presentation, including $73 million of Medicaid supplemental payments receivable that are now presented as other current assets rather than accounts receivable. | ||||||||||
Although the Condensed Consolidated Financial Statements and related notes within this document are unaudited, we believe all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. In preparing our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), we must use estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and these accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable given the particular circumstances in which we operate. Actual results may vary from those estimates. Financial and statistical information we report to other regulatory agencies may be prepared on a basis other than GAAP or using different assumptions or reporting periods and, therefore, may vary from amounts presented herein. Although we make every effort to ensure that the information we report to those agencies is accurate, complete and consistent with applicable reporting guidelines, we cannot be responsible for the accuracy of the information they make available to the public. | ||||||||||
Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the full year. Reasons for this include, but are not limited to: overall revenue and cost trends, particularly the timing and magnitude of price changes; fluctuations in contractual allowances and cost report settlements and valuation allowances; managed care contract negotiations, settlements or terminations and payer consolidations; changes in Medicare and Medicaid regulations; Medicaid and other supplemental funding levels set by the states in which we operate; the timing of approval by the Centers for Medicare and Medicaid Services of Medicaid provider fee revenue programs; trends in patient accounts receivable collectability and associated provisions for doubtful accounts; fluctuations in interest rates; levels of malpractice insurance expense and settlement trends; the number of covered lives managed by our health plans and the plans’ ability to effectively manage medical costs; the timing of when we meet the criteria to recognize electronic health record incentives; impairment of long-lived assets and goodwill; restructuring charges; losses, costs and insurance recoveries related to natural disasters; litigation and investigation costs; acquisitions and dispositions of facilities and other assets; income tax rates and deferred tax asset valuation allowance activity; changes in estimates of accruals for annual incentive compensation; the timing and amounts of stock option and restricted stock unit grants to employees and directors; gains or losses from early extinguishment of debt; and changes in occupancy levels and patient volumes. Factors that affect patient volumes and, thereby, the results of operations at our hospitals and related healthcare facilities include, but are not limited to: the business environment, economic conditions and demographics of local communities in which we operate; the number of uninsured and underinsured individuals in local communities treated at our hospitals; seasonal cycles of illness; climate and weather conditions; physician recruitment, retention and attrition; advances in technology and treatments that reduce length of stay; local healthcare competitors; managed care contract negotiations or terminations; any unfavorable publicity about us, which impacts our relationships with physicians and patients; changes in healthcare regulations and the participation of individual states in federal programs; and the timing of elective procedures. These considerations apply to year-to-year comparisons as well. | ||||||||||
Net Operating Revenues before Provision for Doubtful Accounts | ' | |||||||||
Net Operating Revenues Before Provision for Doubtful Accounts | ||||||||||
We recognize net operating revenues before provision for doubtful accounts in the period in which our services are performed. Net operating revenues before provision for doubtful accounts primarily consist of net patient service revenues that are recorded based on established billing rates (i.e., gross charges), less estimated discounts for contractual and other allowances, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact with Uninsured Patients (“Compact”) and other uninsured discount and charity programs. | ||||||||||
Cash and Cash Equivalents | ' | |||||||||
Cash and Cash Equivalents | ||||||||||
We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were approximately $200 million and $113 million at September 30, 2014 and December 31, 2013, respectively. As of September 30, 2014 and December 31, 2013, our book overdrafts were approximately $194 million and $245 million, respectively, which were classified as accounts payable. | ||||||||||
At September 30, 2014 and December 31, 2013, approximately $98 million and $62 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries. | ||||||||||
Also at September 30, 2014 and December 31, 2013, we had $113 million and $193 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $62 million and $138 million, respectively, were included in accounts payable. | ||||||||||
During the nine months ended September 30, 2014 and 2013, we entered into non-cancellable capital leases of approximately $112 million and $99 million, respectively, primarily for buildings and equipment. | ||||||||||
Other Intangible Assets | ' | |||||||||
Other Intangible Assets | ||||||||||
The following tables provide information regarding other intangible assets, which are included in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013: | ||||||||||
Gross | ||||||||||
Carrying | Accumulated | Net Book | ||||||||
Amount | Amortization | Value | ||||||||
As of September 30, 2014: | ||||||||||
Capitalized software costs | $ | 1,326 | $ | -552 | $ | 774 | ||||
Long-term debt issuance costs | 245 | -42 | 203 | |||||||
Trade names | 106 | — | 106 | |||||||
Contracts | 57 | -5 | 52 | |||||||
Other | 80 | -24 | 56 | |||||||
Total | $ | 1,814 | $ | -623 | $ | 1,191 | ||||
Gross | ||||||||||
Carrying | Accumulated | Net Book | ||||||||
Amount | Amortization | Value | ||||||||
As of December 31, 2013: | ||||||||||
Capitalized software costs | $ | 1,148 | $ | -468 | $ | 680 | ||||
Long-term debt issuance costs | 230 | -31 | 199 | |||||||
Trade names | 106 | — | 106 | |||||||
Contracts | 57 | -2 | 55 | |||||||
Other | 80 | -15 | 65 | |||||||
Total | $ | 1,621 | $ | -516 | $ | 1,105 | ||||
Estimated future amortization of intangibles with finite useful lives as of September 30, 2014 is as follows: | ||||||||||
BASIS_OF_PRESENTATION_Tables
BASIS OF PRESENTATION (Tables) | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||
BASIS OF PRESENTATION | ' | |||||||||||||||||||||
Schedule of sources of net operating revenues before provision for doubtful accounts | ' | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
General Hospitals: | ||||||||||||||||||||||
Medicare | $ | 838 | $ | 501 | $ | 2,560 | $ | 1,543 | ||||||||||||||
Medicaid | 340 | 206 | 1,012 | 630 | ||||||||||||||||||
Managed care | 2,369 | 1,378 | 6,787 | 4,126 | ||||||||||||||||||
Indemnity, self-pay and other | 357 | 262 | 1,172 | 783 | ||||||||||||||||||
Acute care hospitals — other revenue | 8 | 14 | 45 | 53 | ||||||||||||||||||
Other: | ||||||||||||||||||||||
Other operations | 516 | 257 | 1,520 | 706 | ||||||||||||||||||
Net operating revenues before provision for doubtful accounts | $ | 4,428 | $ | 2,618 | $ | 13,096 | $ | 7,841 | ||||||||||||||
Schedule of other intangible assets | ' | |||||||||||||||||||||
Gross | ||||||||||||||||||||||
Carrying | Accumulated | Net Book | ||||||||||||||||||||
Amount | Amortization | Value | ||||||||||||||||||||
As of September 30, 2014: | ||||||||||||||||||||||
Capitalized software costs | $ | 1,326 | $ | -552 | $ | 774 | ||||||||||||||||
Long-term debt issuance costs | 245 | -42 | 203 | |||||||||||||||||||
Trade names | 106 | — | 106 | |||||||||||||||||||
Contracts | 57 | -5 | 52 | |||||||||||||||||||
Other | 80 | -24 | 56 | |||||||||||||||||||
Total | $ | 1,814 | $ | -623 | $ | 1,191 | ||||||||||||||||
Gross | ||||||||||||||||||||||
Carrying | Accumulated | Net Book | ||||||||||||||||||||
Amount | Amortization | Value | ||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||
Capitalized software costs | $ | 1,148 | $ | -468 | $ | 680 | ||||||||||||||||
Long-term debt issuance costs | 230 | -31 | 199 | |||||||||||||||||||
Trade names | 106 | — | 106 | |||||||||||||||||||
Contracts | 57 | -2 | 55 | |||||||||||||||||||
Other | 80 | -15 | 65 | |||||||||||||||||||
Total | $ | 1,621 | $ | -516 | $ | 1,105 | ||||||||||||||||
Schedule of estimated future amortization of intangibles with finite useful lives | ' | |||||||||||||||||||||
Years Ending December 31, | ||||||||||||||||||||||
Total | 2014 | 2015 | 2016 | 2017 | 2018 | Later Years | ||||||||||||||||
Amortization of intangible assets | $ | 1,077 | $ | 54 | $ | 190 | $ | 163 | $ | 134 | $ | 130 | $ | 406 | ||||||||
ACCOUNTS_RECEIVABLE_AND_ALLOWA1
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ' | ||||||
Schedule Of Components Of Accounts Receivable | ' | ||||||
September 30, | December 31, | ||||||
2014 | 2013 | ||||||
Continuing operations: | |||||||
Patient accounts receivable | $ | 2,978 | $ | 2,459 | |||
Allowance for doubtful accounts | -772 | -589 | |||||
Estimated future recoveries from accounts assigned to our Conifer subsidiary | 122 | 92 | |||||
Net cost reports and settlements payable and valuation allowances | -92 | -75 | |||||
2,236 | 1,887 | ||||||
Discontinued operations | 2 | 3 | |||||
Accounts receivable, net | $ | 2,238 | $ | 1,890 | |||
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Discontinued Operation, Additional Disclosures [Abstract] | ' | ||||||||||||
Schedule of net operating revenues and net loss before income taxes | ' | ||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Net operating revenues | $ | 1 | $ | 3 | $ | 2 | $ | 6 | |||||
Net loss before income taxes | -2 | -10 | -35 | -7 | |||||||||
LONGTERM_DEBT_AND_LEASE_OBLIGA1
LONG-TERM DEBT AND LEASE OBLIGATIONS (Tables) | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ||||||
Summary of long-term debt | ' | ||||||
September 30, | December 31, | ||||||
2014 | 2013 | ||||||
Senior notes: | |||||||
97/8%, due 2014 | $ | — | $ | 60 | |||
91/4%, due 2015 | — | 474 | |||||
5%, due 2019 | 1,100 | — | |||||
51/%, due 2019 | 500 | — | |||||
63/4%, due 2020 | 300 | 300 | |||||
8%, due 2020 | 750 | 750 | |||||
81/8%, due 2022 | 2,800 | 2,800 | |||||
67/8%, due 2031 | 430 | 430 | |||||
Senior secured notes: | |||||||
61/4%, due 2018 | 1,041 | 1,041 | |||||
43/4%, due 2020 | 500 | 500 | |||||
6%, due 2020 | 1,800 | 1,800 | |||||
41/2%, due 2021 | 850 | 850 | |||||
43/8%, due 2021 | 1,050 | 1,050 | |||||
Credit facility due 2016 | — | 405 | |||||
Capital leases and mortgage notes | 453 | 417 | |||||
Unamortized note discounts and premium | -21 | -28 | |||||
Total long-term debt | 11,553 | 10,849 | |||||
Less current portion | 98 | 153 | |||||
Long-term debt, net of current portion | $ | 11,455 | $ | 10,696 | |||
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | |||||||||||||
Summary of stock option activity | ' | |||||||||||||
Weighted Average | ||||||||||||||
Exercise Price | Aggregate | Weighted Average | ||||||||||||
Options | Per Share | Intrinsic Value | Remaining Life | |||||||||||
(In Millions) | ||||||||||||||
Outstanding as of December 31, 2013 | 3,308,111 | $ | 30.79 | |||||||||||
Granted | — | |||||||||||||
Exercised | -691,050 | 33.72 | ||||||||||||
Forfeited/Expired | -624,052 | 47.97 | ||||||||||||
Outstanding as of September 30, 2014 | 1,993,009 | $ | 24.40 | $ | 70 | 3.9 | years | |||||||
Vested and expected to vest at September 30, 2014 | 1,984,562 | $ | 24.31 | $ | 70 | 3.9 | years | |||||||
Exercisable as of September 30, 2014 | 1,587,878 | $ | 21.90 | $ | 60 | 3.7 | years | |||||||
Schedule of assumptions used to determine fair value of stock options | ' | |||||||||||||
Nine Months Ended | ||||||||||||||
September 30, 2013 | ||||||||||||||
Expected volatility | 50% | |||||||||||||
Expected dividend yield | 0% | |||||||||||||
Expected life | 3.6 years | |||||||||||||
Expected forfeiture rate | 6% | |||||||||||||
Risk-free interest rate | 0.48% | |||||||||||||
Early exercise threshold | 100% gain | |||||||||||||
Early exercise rate | 50% per year | |||||||||||||
Summary of information about stock options by range of exercise prices | ' | |||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||
Weighted Average | ||||||||||||||
Number of | Remaining | Weighted Average | Number of | Weighted Average | ||||||||||
Range of Exercise Prices | Options | Contractual Life | Exercise Price | Options | Exercise Price | |||||||||
$0.00 to $4.569 | 242,753 | 4.4 | years | $ | 4.56 | 242,753 | $ | 4.56 | ||||||
$4.57 to $25.089 | 957,583 | 5.2 | years | 20.96 | 830,903 | 20.67 | ||||||||
$25.09 to $32.569 | 402,816 | 1.9 | years | 29.32 | 402,816 | 29.32 | ||||||||
$32.57 to $42.089 | 389,857 | 2.5 | years | 40.10 | 111,406 | 42.08 | ||||||||
1,993,009 | 3.9 | years | $ | 24.40 | 1,587,878 | $ | 21.90 | |||||||
Summary of restricted stock unit activity | ' | |||||||||||||
Restricted Stock | Weighted Average Grant | |||||||||||||
Units | Date Fair Value Per Unit | |||||||||||||
Unvested as of December 31, 2013 | 2,707,222 | $ | 33.34 | |||||||||||
Granted | 1,768,508 | 48.41 | ||||||||||||
Vested | -900,763 | 36.51 | ||||||||||||
Forfeited | -140,468 | 35.23 | ||||||||||||
Unvested as of September 30, 2014 | 3,434,499 | $ | 41.85 | |||||||||||
EQUITY_Tables
EQUITY (Tables) | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||
EQUITY | ' | |||||||||||||||||||||||
Schedule Of Changes In Consolidated Equity | ' | |||||||||||||||||||||||
Tenet Healthcare Corporation Shareholders’ Equity | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||||
Shares | Issued Par | Paid-in | Comprehensive | Accumulated | Treasury | Noncontrolling | ||||||||||||||||||
Outstanding | Amount | Capital | Loss | Deficit | Stock | Interests | Total Equity | |||||||||||||||||
Balances at December 31, 2013 | 96,860 | $ | 7 | $ | 4,572 | $ | -24 | $ | -1,422 | $ | -2,378 | $ | 123 | $ | 878 | |||||||||
Net income (loss) | — | — | — | — | -49 | — | 20 | -29 | ||||||||||||||||
Distributions paid to noncontrolling interests | — | — | — | — | — | — | -27 | -27 | ||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | 5 | 5 | ||||||||||||||||
Other comprehensive income | — | — | — | 4 | — | — | — | 4 | ||||||||||||||||
Purchases (sales) of businesses or joint venture interests | — | — | -22 | — | — | — | 10 | -12 | ||||||||||||||||
Stock-based compensation expense and issuance of common stock | 1,364 | — | 47 | — | — | — | — | 47 | ||||||||||||||||
Balances at September 30, 2014 | 98,224 | $ | 7 | $ | 4,597 | $ | -20 | $ | -1,471 | $ | -2,378 | $ | 131 | $ | 866 | |||||||||
Balances at December 31, 2012 | 104,633 | $ | 7 | $ | 4,471 | $ | -68 | $ | -1,288 | $ | -1,979 | $ | 75 | $ | 1,218 | |||||||||
Net income (loss) | — | — | — | — | -110 | — | 13 | -97 | ||||||||||||||||
Distributions paid to noncontrolling interests | — | — | — | — | — | — | -16 | -16 | ||||||||||||||||
Sales of joint venture interests | — | — | 53 | — | — | — | — | 53 | ||||||||||||||||
Purchases of businesses or joint venture interests | — | — | — | — | — | — | 23 | 23 | ||||||||||||||||
Repurchase of common stock | -7,095 | — | — | — | — | -300 | — | -300 | ||||||||||||||||
Stock-based compensation expense and issuance of common stock | 1,628 | — | 38 | — | — | 1 | — | 39 | ||||||||||||||||
Balances at September 30, 2013 | 99,166 | $ | 7 | $ | 4,562 | $ | -68 | $ | -1,398 | $ | -2,278 | $ | 95 | $ | 920 | |||||||||
Schedule of changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | |||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Balances at beginning of period | $ | 340 | $ | 16 | ||||||||||||||||||||
Net income | 24 | 7 | ||||||||||||||||||||||
Distributions paid to noncontrolling interests | -3 | -2 | ||||||||||||||||||||||
Contributions from noncontrolling interests | 10 | — | ||||||||||||||||||||||
Sales of joint venture interests | — | 52 | ||||||||||||||||||||||
Purchases of businesses | 25 | 10 | ||||||||||||||||||||||
Balances at end of period | $ | 396 | $ | 83 | ||||||||||||||||||||
CLAIMS_AND_LAWSUITS_Tables
CLAIMS AND LAWSUITS (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
CLAIMS AND LAWSUITS | ' | ||||||||||||
Reconciliations Of Legal Settlements And Related Costs | ' | ||||||||||||
Balances at | Litigation and | Balances at | |||||||||||
Beginning | Investigation | Cash | End of | ||||||||||
of Period | Costs | Payments | Period | ||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||
Continuing operations | $ | 64 | $ | 19 | $ | -10 | $ | 73 | |||||
Discontinued operations | 6 | 18 | -6 | 18 | |||||||||
$ | 70 | $ | 37 | $ | -16 | $ | 91 | ||||||
Nine Months Ended September 30, 2013 | |||||||||||||
Continuing operations | $ | 5 | $ | 3 | $ | -3 | $ | 5 | |||||
Discontinued operations | 5 | 2 | -1 | 6 | |||||||||
$ | 10 | $ | 5 | $ | -4 | $ | 11 | ||||||
EARNINGS_LOSS_PER_COMMON_SHARE1
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
EARNINGS (LOSS) PER COMMON SHARE | ' | ||||||||
Schedule of reconciliation of numerators and denominators of our basic and diluted loss per common share | ' | ||||||||
Weighted | |||||||||
Net Income | Average | ||||||||
(Loss) | Shares | Per-Share | |||||||
(Numerator) | (Denominator) | Amount | |||||||
Three Months Ended September 30, 2014 | |||||||||
Net income available to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | 10 | 98,036 | $ | 0.10 | ||||
Effect of dilutive stock options, restricted stock units and deferred compensation units | — | 2,890 | — | ||||||
Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | 10 | 100,926 | $ | 0.10 | ||||
Three Months Ended September 30, 2013 | |||||||||
Net income available to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | 33 | 100,894 | $ | 0.33 | ||||
Effect of dilutive stock options, restricted stock units and deferred compensation units | — | 2,204 | -0.01 | ||||||
Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | 33 | 103,098 | $ | 0.32 | ||||
Nine Months Ended September 30, 2014 | |||||||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | -27 | 97,625 | $ | -0.27 | ||||
Effect of dilutive stock options, restricted stock units and deferred compensation units | — | — | — | ||||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | -27 | 97,625 | $ | -0.27 | ||||
Nine Months Ended September 30, 2013 | |||||||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share | $ | -106 | 102,669 | $ | -1.03 | ||||
Effect of dilutive stock options, restricted stock units and deferred compensation units | — | — | — | ||||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $ | -106 | 102,669 | $ | -1.03 | ||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||
Quoted Prices | |||||||||||||
in Active | Significant | ||||||||||||
Markets for | Significant Other | Unobservable | |||||||||||
Identical Assets | Observable Inputs | Inputs | |||||||||||
Investments | September 30, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||
Marketable securities — current | $ | 2 | $ | 2 | $ | — | $ | — | |||||
Investments in Reserve Yield Plus Fund | 2 | — | 2 | — | |||||||||
Marketable debt securities — noncurrent | 62 | 26 | 35 | 1 | |||||||||
$ | 66 | $ | 28 | $ | 37 | $ | 1 | ||||||
Quoted Prices | |||||||||||||
in Active | Significant | ||||||||||||
Markets for | Significant Other | Unobservable | |||||||||||
Identical Assets | Observable Inputs | Inputs | |||||||||||
Investments | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||
Marketable securities — current | $ | 1 | $ | 1 | $ | — | $ | — | |||||
Investments in Reserve Yield Plus Fund | 2 | — | 2 | — | |||||||||
Marketable debt securities — noncurrent | 62 | 23 | 38 | 1 | |||||||||
$ | 65 | $ | 24 | $ | 40 | $ | 1 | ||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Vanguard | ' | ||||||||||||
Business Acquisition | ' | ||||||||||||
Schedule of Preliminary purchase price allocation | ' | ||||||||||||
Current assets | $ | 976 | |||||||||||
Property and equipment | 2,830 | ||||||||||||
Other long term assets | 152 | ||||||||||||
Other intangible assets | 155 | ||||||||||||
Goodwill | 2,460 | ||||||||||||
Current liabilities | -1,193 | ||||||||||||
Deferred taxes-long term | -103 | ||||||||||||
Other long-term liabilities | -3,711 | ||||||||||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | -258 | ||||||||||||
Noncontrolling interests | -7 | ||||||||||||
Net cash paid | $ | 1,301 | |||||||||||
Schedule of pro forma financial information as if the Vanguard Health Systems acquisition had occurred at the beginning of the year | ' | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Net operating revenues | $ | 4,179 | $ | 3,748 | $ | 12,147 | $ | 11,574 | |||||
Net income (loss) from continuing operations, before income taxes | $ | 1 | $ | -220 | $ | 6 | $ | -418 | |||||
Series of individual business acquisitions | ' | ||||||||||||
Business Acquisition | ' | ||||||||||||
Schedule of Preliminary purchase price allocation | ' | ||||||||||||
Current assets | $ | 19 | |||||||||||
Property and equipment | 104 | ||||||||||||
Goodwill | 137 | ||||||||||||
Current liabilities | -21 | ||||||||||||
Long-term liabilities | -19 | ||||||||||||
Redeemable noncontrolling interests | -21 | ||||||||||||
Noncontrolling interests | -14 | ||||||||||||
Net cash paid | $ | 185 | |||||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||
Reconciliation of assets by reportable segment to consolidated assets | ' | ||||||||||||
September 30, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Assets: | |||||||||||||
Hospital operations and other | $ | 16,988 | $ | 16,194 | |||||||||
Conifer | 324 | 256 | |||||||||||
Total | $ | 17,312 | $ | 16,450 | |||||||||
Reconciliation of other significant reconciling items from segments to consolidated | ' | ||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Capital expenditures: | |||||||||||||
Hospital operations and other | $ | 207 | $ | 139 | $ | 717 | $ | 387 | |||||
Conifer | 4 | 3 | 17 | 11 | |||||||||
Total | $ | 211 | $ | 142 | $ | 734 | $ | 398 | |||||
Net operating revenues: | |||||||||||||
Hospital operations and other | $ | 4,031 | $ | 2,275 | $ | 11,707 | $ | 6,840 | |||||
Conifer | |||||||||||||
Tenet | 148 | 92 | 426 | 278 | |||||||||
Other customers | 148 | 133 | 440 | 377 | |||||||||
4,327 | 2,500 | 12,573 | 7,495 | ||||||||||
Intercompany eliminations | -148 | -92 | -426 | -278 | |||||||||
Total | $ | 4,179 | $ | 2,408 | $ | 12,147 | $ | 7,217 | |||||
Adjusted EBITDA: | |||||||||||||
Hospital operations and other | $ | 412 | $ | 252 | $ | 1,167 | $ | 802 | |||||
Conifer | 47 | 36 | 139 | 96 | |||||||||
Total | $ | 459 | $ | 288 | $ | 1,306 | $ | 898 | |||||
Depreciation and amortization: | |||||||||||||
Hospital operations and other | $ | 202 | $ | 114 | $ | 594 | $ | 339 | |||||
Conifer | 5 | 5 | 15 | 15 | |||||||||
Total | $ | 207 | $ | 119 | $ | 609 | $ | 354 | |||||
Adjusted EBITDA | $ | 459 | $ | 288 | $ | 1,306 | $ | 898 | |||||
Depreciation and amortization | -207 | -119 | -609 | -354 | |||||||||
Impairment and restructuring charges, and acquisition-related costs | -37 | -20 | -90 | -45 | |||||||||
Litigation and investigation costs | -4 | -1 | -19 | -3 | |||||||||
Interest expense | -186 | -91 | -558 | -292 | |||||||||
Loss from early extinguishment of debt | -24 | — | -24 | -348 | |||||||||
Investment earnings | — | — | — | 1 | |||||||||
Net income (loss) from continuing operations before income taxes | $ | 1 | $ | 57 | $ | 6 | $ | -143 | |||||
BASIS_OF_PRESENTATION_Details
BASIS OF PRESENTATION (Details) (USD $) | 9 Months Ended | 0 Months Ended | |
Sep. 30, 2014 | Oct. 01, 2013 | Oct. 01, 2013 | |
plan | Vanguard | Vanguard | |
Institution | plan | ||
person | |||
Institution | |||
Business Acquisition | ' | ' | ' |
Business acquisition share price (in dollars per share) | ' | ' | $21 |
Number of hospitals | 80 | 28 | ' |
Number of hospitals under construction | ' | 1 | ' |
Number of outpatient centers | 198 | ' | ' |
Number of outpatient centers acquired | ' | 39 | ' |
Number of health plans | 6 | 5 | ' |
Number of members covered under the health plans | ' | 140,000 | ' |
Amount paid for acquisition, including assumed debt | ' | $4,300,000,000 | ' |
Assumed debt | ' | $2,500,000,000 | ' |
BASIS_OF_PRESENTATION_Revenues
BASIS OF PRESENTATION - Revenues (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Supplemental payments and net operating revenues | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | $4,428 | $2,618 | $13,096 | $7,841 |
Medicare | ' | ' | ' | ' |
Supplemental payments and net operating revenues | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 838 | 501 | 2,560 | 1,543 |
Medicaid | ' | ' | ' | ' |
Supplemental payments and net operating revenues | ' | ' | ' | ' |
Supplemental payments receivable recorded as other current assets rather than accounts receivable | 73 | ' | 73 | ' |
Net operating revenues before provision for doubtful accounts | 340 | 206 | 1,012 | 630 |
Managed care | ' | ' | ' | ' |
Supplemental payments and net operating revenues | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 2,369 | 1,378 | 6,787 | 4,126 |
Indemnity, self-pay and other | ' | ' | ' | ' |
Supplemental payments and net operating revenues | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 357 | 262 | 1,172 | 783 |
Acute care hospitals - other revenue | ' | ' | ' | ' |
Supplemental payments and net operating revenues | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | 8 | 14 | 45 | 53 |
Other operations | ' | ' | ' | ' |
Supplemental payments and net operating revenues | ' | ' | ' | ' |
Net operating revenues before provision for doubtful accounts | $516 | $257 | $1,520 | $706 |
BASIS_OF_PRESENTATION_Cash_and
BASIS OF PRESENTATION - Cash and Cash Equivalents (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash and Cash Equivalents | ' | ' | ' | ' |
Cash and cash equivalents | $200 | $82 | $113 | $364 |
Accrued property and equipment purchases for items received but not yet paid | 113 | ' | 193 | ' |
Non-cancellable capital leases primarily for buildings and equipment | 112 | 99 | ' | ' |
Accounts payable | ' | ' | ' | ' |
Cash and Cash Equivalents | ' | ' | ' | ' |
Book overdrafts classified as accounts payable | 194 | ' | 245 | ' |
Accrued property and equipment purchases for items received but not yet paid | 62 | ' | 138 | ' |
Captive insurance subsidiaries | ' | ' | ' | ' |
Cash and Cash Equivalents | ' | ' | ' | ' |
Cash and cash equivalents | $98 | ' | $62 | ' |
BASIS_OF_PRESENTATION_Intangib
BASIS OF PRESENTATION - Intangible Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other intangible assets | ' | ' |
Gross Carrying Amount | $1,814 | $1,621 |
Accumulated Amortization | -623 | -516 |
Net Book Value | 1,191 | 1,105 |
Capitalized software costs | ' | ' |
Other intangible assets | ' | ' |
Gross Carrying Amount | 1,326 | 1,148 |
Accumulated Amortization | -552 | -468 |
Net Book Value | 774 | 680 |
Long-term debt issuance costs | ' | ' |
Other intangible assets | ' | ' |
Gross Carrying Amount | 245 | 230 |
Accumulated Amortization | -42 | -31 |
Net Book Value | 203 | 199 |
Trade names | ' | ' |
Other intangible assets | ' | ' |
Gross Carrying Amount | 106 | 106 |
Net Book Value | 106 | 106 |
Contracts | ' | ' |
Other intangible assets | ' | ' |
Gross Carrying Amount | 57 | 57 |
Accumulated Amortization | -5 | -2 |
Net Book Value | 52 | 55 |
Other | ' | ' |
Other intangible assets | ' | ' |
Gross Carrying Amount | 80 | 80 |
Accumulated Amortization | -24 | -15 |
Net Book Value | $56 | $65 |
BASIS_OF_PRESENTATION_Amortiza
BASIS OF PRESENTATION - Amortization of Intangible Assets (Details) (USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Estimated future amortization of intangibles with finite useful lives | ' |
Net Book Value | $1,077 |
2014 | 54 |
2015 | 190 |
2016 | 163 |
2017 | 134 |
2018 | 130 |
Later Years | $406 |
ACCOUNTS_RECEIVABLE_AND_ALLOWA2
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS - Components (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable | ' | ' |
Accounts receivable, net | $2,238 | $1,890 |
Continuing operations | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' |
Patient accounts receivable | 2,978 | 2,459 |
Allowance for doubtful accounts | -772 | -589 |
Estimated future recoveries from accounts assigned to our collection agency subsidiary | 122 | 92 |
Net cost reports and settlements receivable (payable) and valuation allowances | -92 | -75 |
Accounts receivable, net | 2,236 | 1,887 |
Discontinued operations | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' |
Accounts receivable, net | $2 | $3 |
ACCOUNTS_RECEIVABLE_AND_ALLOWA3
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS - Allowance (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' | ' | ' |
Allowance for doubtful accounts as a percent of patients accounts receivable | ' | ' | 25.90% | ' | 24.00% |
Total | $4,428 | $2,618 | $13,096 | $7,841 | ' |
Self-Pay Patients | ' | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' | ' | ' |
Allowance for doubtful accounts as a percent of patients accounts receivable | ' | ' | 79.50% | ' | 75.90% |
Estimated costs of caring | 135 | 116 | 488 | 342 | ' |
Managed Care Patients | ' | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' | ' | ' |
Allowance for doubtful accounts as a percent of patients accounts receivable | ' | ' | 6.20% | ' | 5.90% |
Charity Care Patients | ' | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' | ' | ' |
Estimated costs of caring | 42 | 32 | 137 | 95 | ' |
Disproportionate Share Hospital | ' | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable | ' | ' | ' | ' | ' |
Total | $178 | $72 | $493 | $257 | ' |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net operating revenues and income (loss) before income taxes | ' | ' | ' | ' |
Net operating revenues | $1 | $3 | $2 | $6 |
Net loss before income taxes | -2 | -10 | -35 | -7 |
Litigation and investigation costs allocable to the previously divested hospitals related to a class action suit | 18 | ' | ' | ' |
Land | ' | ' | ' | ' |
Net operating revenues and income (loss) before income taxes | ' | ' | ' | ' |
Gain (loss) on sale of discontinued operations | ' | $7 | ' | ' |
IMPAIRMENT_AND_RESTRUCTURING_C1
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
segment | ||
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | ' | ' |
Impairment, restructuring charges, and acquisition-related costs | $90 | $45 |
Employee severance costs | 14 | 9 |
Lease termination costs | 6 | 1 |
Restructuring costs | 19 | 10 |
Acquisition costs | 51 | 23 |
Acquisition-related transaction costs | 7 | ' |
Acquisition integration charges | 44 | ' |
Impairment of property | ' | $2 |
Number of continuing operating segments | 2 | ' |
LONGTERM_DEBT_AND_LEASE_OBLIGA2
LONG-TERM DEBT AND LEASE OBLIGATIONS - Schedule of Debt (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Capital leases and mortgage notes | $453 | ' | ' | 417 |
Unamortized note discounts and premium | -21 | ' | ' | -28 |
Total long-term debt | 11,553 | ' | ' | 10,849 |
Less current portion | 98 | ' | ' | 153 |
Long-term debt, net of current portion | 11,455 | ' | ' | 10,696 |
9 7/8%, due 2014 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 9.88% | ' | ' | 9.88% |
Carrying amount | ' | ' | ' | 60 |
9 1/4%, due 2015 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 9.25% | 9.25% | ' | 9.25% |
Carrying amount | ' | ' | ' | 474 |
5%, due 2019 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 5.00% | 5.00% | 5.00% | 5.00% |
Carrying amount | 1,100 | ' | ' | ' |
5 1/2%, due 2019 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 5.50% | ' | ' | 5.50% |
Carrying amount | 500 | ' | ' | ' |
6 3/4%, due 2020 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 6.75% | ' | ' | 6.75% |
Carrying amount | 300 | ' | ' | 300 |
8%, due 2020 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 8.00% | ' | ' | 8.00% |
Carrying amount | 750 | ' | ' | 750 |
8 1/8%, due 2022 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 8.13% | ' | ' | 8.13% |
Carrying amount | 2,800 | ' | ' | 2,800 |
6 7/8%, due 2031 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 6.88% | ' | ' | 6.88% |
Carrying amount | 430 | ' | ' | 430 |
6.25%, due 2018 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 6.25% | ' | ' | 6.25% |
Carrying amount | 1,041 | ' | ' | 1,041 |
4 3/4%, due 2020 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 4.75% | ' | ' | 4.75% |
Carrying amount | 500 | ' | ' | 500 |
6%, due 2020 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 6.00% | ' | ' | 6.00% |
Carrying amount | 1,800 | ' | ' | 1,800 |
4 1/2%, due 2021 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 4.50% | ' | ' | 4.50% |
Carrying amount | 850 | ' | ' | 850 |
4 3/8%, due 2021 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Interest rate, stated percentage | 4.38% | ' | ' | 4.38% |
Carrying amount | 1,050 | ' | ' | 1,050 |
Credit Facility due 2016 | ' | ' | ' | ' |
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' |
Carrying amount | ' | ' | ' | 405 |
LONGTERM_DEBT_AND_LEASE_OBLIGA3
LONG-TERM DEBT AND LEASE OBLIGATIONS - Credit Agreement (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 07, 2014 | Sep. 30, 2014 |
In Millions, unless otherwise specified | 9 1/4%, due 2015 | 9 1/4%, due 2015 | 9 1/4%, due 2015 | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Letter of Credit Facility | Letter of Credit Facility | Letter of Credit Facility |
Minimum | Maximum | Base rate | Base rate | LIBOR | LIBOR | Maximum | |||||||
Minimum | Maximum | Minimum | Maximum | ||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving credit facility, maximum borrowing capacity | ' | ' | ' | $1,000 | ' | ' | ' | ' | ' | ' | ' | $180 | ' |
Line of credit facility, subfacility maximum available capacity | ' | ' | ' | 300 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate, stated percentage | 9.25% | 9.25% | 9.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying amount | ' | ' | 474 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Margin on variable rate (as a percent) | ' | ' | ' | ' | ' | ' | 1.00% | 1.50% | 2.00% | 2.50% | 0.88% | ' | ' |
Unused commitment fee (as a percent) | ' | ' | ' | ' | 0.38% | 0.50% | ' | ' | ' | ' | 0.50% | ' | ' |
Standby letters of credit outstanding | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | 115 | ' | ' |
Amount available for borrowing under revolving credit facility | ' | ' | ' | 994 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity after increase subject to certain conditions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $200 | ' |
Number of business days after notice, for reimbursement of amount drawn. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 days |
Unused commitment fee after step down | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.38% |
Secured debt to EBITDA ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' |
Issuance fee (percentage) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.88% | ' | ' |
Issuance fee, based on face amount (percentage) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.13% | ' | ' |
LONGTERM_DEBT_AND_LEASE_OBLIGA4
LONG-TERM DEBT AND LEASE OBLIGATIONS - Senior Notes (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jul. 31, 2014 |
5 1/2%, due 2019 | 5 1/2%, due 2019 | 5 1/2%, due 2019 | 5%, due 2019 | 5%, due 2019 | 5%, due 2019 | 5%, due 2019 | 5%, due 2019 | 5%, due 2019 | 9 1/4%, due 2015 | 9 1/4%, due 2015 | 9 1/4%, due 2015 | 9 1/4%, due 2015 | ||||
Senior Notes | Senior Notes | Senior Notes | Senior Notes | |||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of notes sold | ' | ' | ' | ' | ' | $500 | ' | ' | ' | ' | $500 | $600 | ' | ' | ' | ' |
Interest rate, stated percentage | ' | ' | ' | 5.50% | 5.50% | 5.50% | 5.00% | 5.00% | 5.00% | 5.00% | ' | ' | 9.25% | 9.25% | 9.25% | ' |
Loss from early extinguishment of debt | ($24) | ($24) | ($348) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($24) |
GUARANTEES_Details
GUARANTEES (Details) (Income and Revenue Collection Guarantee, USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Income and Revenue Collection Guarantee | ' |
GUARANTEES | ' |
Maximum potential amount of future payments under guarantees | $92 |
Liability for the fair value of guarantees | $69 |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
EMPLOYEE BENEFIT PLANS | ' | ' |
Stock-based compensation costs, pretax | $38 | $29 |
2008 Stock Incentive Plan | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' |
Shares available for issuance under the plan | 5,200,000 | ' |
2008 Stock Incentive Plan | Stock Options | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' |
Expiration period from the date of grant | '10 years | ' |
Portion of awards vesting on each of the first three anniversary dates of the grant (as a percent) | 33.30% | ' |
Vesting period | '3 years | ' |
2008 Stock Incentive Plan | Restricted Stock Units | ' | ' |
EMPLOYEE BENEFIT PLANS | ' | ' |
Contractual right to receive shares of common stock for a stock based award | 1 | ' |
Portion of awards vesting on each of the first three anniversary dates of the grant (as a percent) | 33.30% | ' |
Vesting period | '3 years | ' |
EMPLOYEE_BENEFIT_PLANS_Stock_O
EMPLOYEE BENEFIT PLANS - Stock Options (Details) (Stock Options, USD $) | 9 Months Ended | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2011 | Dec. 31, 2010 |
item | item | item | ||
Stock option activity | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 3,308,111 | ' | ' | ' |
Granted (in shares) | 0 | ' | ' | ' |
Exercised (in shares) | -691,050 | -913,369 | ' | ' |
Forfeited/Expired (in shares) | -624,052 | ' | ' | ' |
Outstanding at the end of the period (in shares) | 1,993,009 | ' | ' | ' |
Vested and expected to vest at the end of the period (in shares) | 1,984,562 | ' | ' | ' |
Exercisable at the end of the period (in shares) | 1,587,878 | ' | ' | ' |
Weighted Average Exercise Price Per Share | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $30.79 | ' | ' | ' |
Exercised (in dollars per share) | $33.72 | ' | ' | ' |
Forfeited/Expired (in dollars per share) | $47.97 | ' | ' | ' |
Outstanding at the end of the period (in dollars per share) | $24.40 | ' | ' | ' |
Vested and expected to vest at the end of the period (in dollars per share) | $24.31 | ' | ' | ' |
Exercisable at the end of the period (in dollars per share) | $21.90 | ' | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' | ' |
Outstanding at the end of the period | $70 | ' | ' | ' |
Vested and expected to vest at the end of the period | 70 | ' | ' | ' |
Exercisable at the end of the period | 60 | ' | ' | ' |
Weighted Average Remaining Life | ' | ' | ' | ' |
Outstanding at the end of the period | '3 years 10 months 24 days | ' | ' | ' |
Vested and expected to vest at the end of the period | '3 years 10 months 24 days | ' | ' | ' |
Exercisable at the end of the period | '3 years 8 months 12 days | ' | ' | ' |
Other Disclosures | ' | ' | ' | ' |
Aggregate Intrinsic value of awards exercised | 13 | 17 | ' | ' |
Unrecognized compensation costs | $2 | ' | ' | ' |
Period for recognition of unrecognized compensation costs | '1 year 1 month 6 days | ' | ' | ' |
Weighted average estimated fair value of awards granted (in dollars per share) | ' | $14.46 | ' | ' |
Assumptions used to calculate fair value of awards granted to top eleven employees | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | 50.00% | ' | ' |
Expected dividend yield (as a percent) | ' | 0.00% | ' | ' |
Expected life | ' | '3 years 7 months 6 days | ' | ' |
Expected forfeiture rate (as a percent) | ' | 6.00% | ' | ' |
Risk-free interest rate (as a percent) | ' | 0.48% | ' | ' |
Early exercise threshold gain (as a percent) | ' | 100.00% | ' | ' |
Early exercise rate, gain (as a percent) | ' | 50.00% | ' | ' |
Number of dates excluded from historical share-price volatility | 2 | ' | 1 | 1 |
2008 Stock Incentive Plan | ' | ' | ' | ' |
Stock option activity | ' | ' | ' | ' |
Granted (in shares) | ' | 295,639 | ' | ' |
Other Disclosures | ' | ' | ' | ' |
Vesting period | '3 years | ' | ' | ' |
Expiration period | '10 years | ' | ' | ' |
EMPLOYEE_BENEFIT_PLANS_Range_o
EMPLOYEE BENEFIT PLANS - Range of Exercise Prices (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Options Exercisable | ' |
Weighted Average Remaining Contractual life | '3 years 10 months 24 days |
Range of Exercise Prices, $0.00 to $4.569 | ' |
Options Exercisable | ' |
Weighted Average Remaining Contractual life | '4 years 4 months 24 days |
Range of Exercise Prices, $4.57 to $25.089 | ' |
Options Exercisable | ' |
Weighted Average Remaining Contractual life | '5 years 2 months 12 days |
Range of Exercise Prices, $25.09 to $32.569 | ' |
Options Exercisable | ' |
Weighted Average Remaining Contractual life | '1 year 10 months 24 days |
Range of Exercise Prices, $32.57 to $42.089 | ' |
Options Exercisable | ' |
Weighted Average Remaining Contractual life | '2 years 6 months |
Stock Options | ' |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 1,993,009 |
Number of Options Exercisable (in shares) | 1,587,878 |
Weighted Average Exercise Price Outstanding (in dollars per share) | 24.4 |
Weighted Average Exercise Price (in dollars per share) | 21.9 |
Stock Options | Range of Exercise Prices, $0.00 to $4.569 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | 0 |
Exercise price per share, high end of the range (in dollars per share) | 4.569 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 242,753 |
Number of Options Exercisable (in shares) | 242,753 |
Weighted Average Exercise Price Outstanding (in dollars per share) | 4.56 |
Weighted Average Exercise Price (in dollars per share) | 4.56 |
Stock Options | Range of Exercise Prices, $4.57 to $25.089 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | 4.57 |
Exercise price per share, high end of the range (in dollars per share) | 25.089 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 957,583 |
Number of Options Exercisable (in shares) | 830,903 |
Weighted Average Exercise Price Outstanding (in dollars per share) | 20.96 |
Weighted Average Exercise Price (in dollars per share) | 20.67 |
Stock Options | Range of Exercise Prices, $25.09 to $32.569 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | 25.09 |
Exercise price per share, high end of the range (in dollars per share) | 32.569 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 402,816 |
Number of Options Exercisable (in shares) | 402,816 |
Weighted Average Exercise Price Outstanding (in dollars per share) | 29.32 |
Weighted Average Exercise Price (in dollars per share) | 29.32 |
Stock Options | Range of Exercise Prices, $32.57 to $42.089 | ' |
Summary information about outstanding stock options | ' |
Exercise price per share, low end of the range (in dollars per share) | 32.57 |
Exercise price per share, high end of the range (in dollars per share) | 42.089 |
Options Exercisable | ' |
Number of Options Outstanding (in shares) | 389,857 |
Number of Options Exercisable (in shares) | 111,406 |
Weighted Average Exercise Price Outstanding (in dollars per share) | 40.1 |
Weighted Average Exercise Price (in dollars per share) | 42.08 |
EMPLOYEE_BENEFIT_PLANS_Restric
EMPLOYEE BENEFIT PLANS - Restricted Stock (Details) (USD $) | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Restricted Stock Units | ' | ' |
Restricted stock unit activity | ' | ' |
Unvested at the beginning of the period (in shares) | 2,707,222 | ' |
Granted (in shares) | 1,768,508 | ' |
Vested (in shares) | -900,763 | ' |
Forfeited (in shares) | -140,468 | ' |
Unvested at the end of the period (in shares) | 3,434,499 | ' |
Weighted Average Grant Date Fair Value Per Unit | ' | ' |
Unvested at the beginning of the period (in dollars per share) | 33.34 | ' |
Granted (in dollars per share) | 48.41 | ' |
Vested (in dollars per share) | 36.51 | ' |
Forfeited (in dollars per share) | 35.23 | ' |
Unvested at the end of the period (in dollars per share) | 41.85 | ' |
Other Disclosures | ' | ' |
Percentage of restricted stock units which will vest on the tenth anniversary of the grant date | 100.00% | ' |
Unrecognized compensation costs | 107 | ' |
Period for recognition of unrecognized compensation costs | '3 years | ' |
Restricted Stock Units | Chief executive officer | ' | ' |
Restricted stock unit activity | ' | ' |
Granted (in shares) | 212,180 | ' |
Restricted Stock Units | Time-vesting | ' | ' |
Restricted stock unit activity | ' | ' |
Granted (in shares) | 1,045,750 | 815,262 |
Other Disclosures | ' | ' |
Restricted stock that will vest and be settled over a three-year period from the grant date (in shares) | 944,249 | 735,129 |
Restricted stock that will vest and be settled on the tenth anniversary of the grant date (in shares) | 23,435 | ' |
Restricted stock that will vest and be settled on the fifth anniversary of the grant date (in shares) | 63,623 | 80,133 |
Percentage of restricted stock units, which will vest on the fifth anniversary of the grant date | 100.00% | 100.00% |
Restricted stock that will vest and be settled on the third anniversary of the grant date (in shares) | 14,443 | ' |
Percentage of restricted stock units, which will vest three years from the grant date | 100.00% | ' |
Vesting period | '3 years | '3 years |
Restricted Stock Units | Time-vesting | Chief executive officer | ' | ' |
Restricted stock unit activity | ' | ' |
Granted (in shares) | 106,090 | ' |
Restricted Stock Units | Performance-based vesting | ' | ' |
Restricted stock unit activity | ' | ' |
Granted (in shares) | 271,815 | 206,058 |
Other Disclosures | ' | ' |
Term for achievement of specified performance goal | '1 year | ' |
Vesting period | '3 years | ' |
Awards vesting (as a percent) | 100.00% | ' |
Restricted Stock Units | Performance-based vesting | Minimum | ' | ' |
Other Disclosures | ' | ' |
Awards vesting (as a percent) | 0.00% | ' |
Restricted Stock Units | Performance-based vesting | Maximum | ' | ' |
Other Disclosures | ' | ' |
Awards vesting (as a percent) | 200.00% | ' |
Restricted Stock Units | Performance-based vesting | Chief executive officer | ' | ' |
Restricted stock unit activity | ' | ' |
Granted (in shares) | 106,090 | ' |
Other Disclosures | ' | ' |
Additional award to be granted (in shares) | 106,090 | ' |
Restricted Stock Units | Performance-based - 3 year vesting | Chief executive officer | ' | ' |
Other Disclosures | ' | ' |
Vesting period | '3 years | ' |
Awards vesting (as a percent) | 50.00% | ' |
Restricted Stock Units | Performance-based - 6 year vesting | Chief executive officer | ' | ' |
Other Disclosures | ' | ' |
Vesting period | '6 years | ' |
Awards vesting (as a percent) | 50.00% | ' |
Special Retention Restricted Stock Units | Performance-based vesting | ' | ' |
Restricted stock unit activity | ' | ' |
Granted (in shares) | 450,943 | ' |
Other Disclosures | ' | ' |
Awards vesting (as a percent) | 66.70% | ' |
Special Retention Restricted Stock Units | Performance-based - 1 year vesting | ' | ' |
Other Disclosures | ' | ' |
Vesting period | '1 year | ' |
Awards vesting (as a percent) | 50.00% | ' |
Special Retention Restricted Stock Units | Performance-based - 4 year vesting | ' | ' |
Other Disclosures | ' | ' |
Vesting period | '4 years | ' |
Awards vesting (as a percent) | 50.00% | ' |
Special Retention Restricted Stock Units | Performance-based - 5 year vesting | ' | ' |
Other Disclosures | ' | ' |
Awards vesting (as a percent) | 33.30% | ' |
EQUITY_Changes_in_Shareholders
EQUITY - Changes in Shareholders' Equity (Details) (USD $) | 9 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Common Stock | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | Accumulated Deficit | Accumulated Deficit | Treasury Stock | Treasury Stock | Treasury Stock | Noncontrolling Interests | Noncontrolling Interests | |||
Changes in Shareholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balances | $878 | $1,218 | $7 | $7 | $4,572 | $4,471 | ($24) | ($68) | ($68) | ($1,422) | ($1,288) | ($1,979) | ($2,378) | ($2,378) | $123 | $75 |
Balances (in shares) | ' | ' | 96,860 | 104,633 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | -29 | -97 | ' | ' | ' | ' | ' | ' | ' | -49 | -110 | ' | ' | ' | 20 | 13 |
Distributions paid to noncontrolling interests | -27 | -16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -27 | -16 |
Contributions from noncontrolling interests | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' |
Other comprehensive income | 4 | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchases (sales) of business or joint venture interests | -12 | ' | ' | ' | -22 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' |
Sales of joint venture interests | ' | 53 | ' | ' | ' | 53 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchases of businesses or joint venture interests | ' | 23 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23 |
Repurchase of common stock | ' | -300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -300 | ' | ' | ' | ' |
Repurchase of common stock (in shares) | ' | ' | ' | -7,095 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation expense and issuance of common stock | 47 | 39 | ' | ' | 47 | 38 | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' |
Stock-based compensation expense and issuance of common stock (in shares) | ' | ' | 1,364 | 1,628 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balances | $866 | $920 | $7 | $7 | $4,597 | $4,562 | ($20) | ($68) | ($68) | ($1,471) | ($1,398) | ($2,278) | ($2,378) | ($2,378) | $131 | $95 |
Balances (in shares) | ' | ' | 98,224 | 99,166 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
EQUITY_Changes_in_Redeemable_N
EQUITY - Changes in Redeemable Noncontrolling Interests (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' |
Distributions paid to noncontrolling interests | ($27) | ($16) |
Contributions from noncontrolling interests | 5 | ' |
Redeemable noncontrolling interests | ' | ' |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' |
Balances at beginning of period | 340 | 16 |
Net income | 24 | 7 |
Distributions paid to noncontrolling interests | -3 | -2 |
Contributions from noncontrolling interests | 10 | ' |
Sales of joint venture interests | ' | 52 |
Purchases of businesses | 25 | 10 |
Balances at end of period | $396 | $83 |
PROPERTY_AND_PROFESSIONAL_AND_1
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
Professional and General Liability Insurance | Professional and General Liability Insurance | |||
Insurance coverage | ' | ' | ' | ' |
Self insurance reserve | ' | ' | $700 | $711 |
Loss contingency discount rate, maturity rate period | ' | ' | '7 years | '7 years |
Risk-free rate (as a percent) | ' | ' | 2.22% | 2.45% |
Malpractice expense | $170 | $71 | ' | ' |
CLAIMS_AND_LAWSUITS_Details
CLAIMS AND LAWSUITS (Details) (USD $) | Sep. 30, 2014 | Jan. 31, 2013 | Sep. 30, 2014 | Jul. 31, 2010 | Sep. 30, 2014 | Jul. 23, 2014 | Sep. 30, 2014 | Oct. 31, 2014 | Jun. 30, 2014 |
Governmental Reviews | Kyphoplasty | Kyphoplasty | Kyphoplasty | ICDs | Clinica de la Mama Investigations and Qui Tam Action | Clinica de la Mama Investigations and Qui Tam Action | Ordinary Course Matters | Ordinary Course Matters | |
Institution | Institution | Institution | Institution | defendant | Institution | plaintiff | |||
person | |||||||||
Loss Contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of hospitals under governmental review | ' | ' | ' | 7 | 56 | ' | 4 | ' | ' |
Settlement amount | ' | $900,000,000 | ' | ' | ' | ' | ' | ' | ' |
Number of hospitals under Medicare claims review | ' | 1 | ' | ' | ' | ' | ' | ' | ' |
Number of hospitals for which settlement discussions to resolve matter is engaged | ' | ' | 5 | ' | ' | ' | ' | ' | ' |
Litigation reserve | 38,000,000 | ' | 2,000,000 | ' | ' | ' | ' | ' | 17,000,000 |
Number of criminal conspiracy counts against a former owner of HMM | ' | ' | ' | ' | ' | 1 | ' | ' | ' |
Number of criminal conspiracy counts against a former employee | ' | ' | ' | ' | ' | 1 | ' | ' | ' |
Number of persons in class action lawsuits | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' |
Number of persons identified in class certification process | ' | ' | ' | ' | ' | ' | ' | 8 | ' |
Number of plaintiffs identified in class certification process | ' | ' | ' | ' | ' | ' | ' | 2 | ' |
Maximum potential payment | ' | ' | ' | ' | ' | ' | ' | ' | $32,500,000 |
CLAIMS_AND_LAWSUITS_Reconcilia
CLAIMS AND LAWSUITS - Reconciliations (Details) (Claims, lawsuits, and regulatory proceedings, USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Loss Contingencies | ' | ' |
Litigation reserve, Balances at Beginning of Period | $70 | $10 |
Litigation and Investigation costs | 37 | 5 |
Cash Payments | -16 | -4 |
Litigation reserve, Balances at End of Period | 91 | 11 |
Continuing operations | ' | ' |
Loss Contingencies | ' | ' |
Litigation reserve, Balances at Beginning of Period | 64 | 5 |
Litigation and Investigation costs | 19 | 3 |
Cash Payments | -10 | -3 |
Litigation reserve, Balances at End of Period | 73 | 5 |
Discontinued operations | ' | ' |
Loss Contingencies | ' | ' |
Litigation reserve, Balances at Beginning of Period | 6 | 5 |
Litigation and Investigation costs | 18 | 2 |
Cash Payments | -6 | -1 |
Litigation reserve, Balances at End of Period | $18 | $6 |
INCOME_TAXES_Reconciliation_De
INCOME TAXES - Reconciliation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Taxes | ' | ' | ' | ' |
Income tax benefit (expense) | $18 | ($16) | $11 | $57 |
Income tax expense related to increase in the valuation allowance for deferred tax assets | ' | ' | 3 | ' |
Tax basis adjustments for state tax purposes related to acquisition | ' | ' | 7 | ' |
Tax benefit, amended state tax returns | ' | ' | 4 | ' |
Tax benefit, other adjustments | ' | ' | 4 | ' |
Reduction in estimated liabilities for uncertain tax positions | ' | ' | 3 | ' |
Unrecognized tax benefits | 40 | ' | 40 | ' |
Unrecognized tax benefits which, if recognized, would impact effective tax rate | 31 | ' | 31 | ' |
Unrecognized federal and state tax benefits and reserves for interest and penalties, which may decrease in the next 12 months | 2 | ' | 2 | ' |
Continuing operations | ' | ' | ' | ' |
Income Taxes | ' | ' | ' | ' |
Interest and penalties related to accrued liabilities for uncertain tax positions, recognized | ' | ' | $5 | ' |
EARNINGS_LOSS_PER_COMMON_SHARE2
EARNINGS (LOSS) PER COMMON SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net Income (Loss) (Numerator) | ' | ' | ' | ' |
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share | $10 | $33 | ($27) | ($106) |
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share | $10 | $33 | ($27) | ($106) |
Weighted Average Shares (Denominator) | ' | ' | ' | ' |
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share (in Weighted Average Shares) | 98,036 | 100,894 | 97,625 | 102,669 |
Effect of dilutive stock options, restricted stock units and deferred compensation units on the diluted shares (in weighted average shares) | 2,890 | 2,204 | ' | ' |
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share (in Weighted Average Shares) | 100,926 | 103,098 | 97,625 | 102,669 |
Per-Share Amount | ' | ' | ' | ' |
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings, Per-Share Amount (in dollars per share) | $0.10 | $0.33 | ($0.27) | ($1.03) |
Effect of dilutive stock options and restricted stock units (Per-Share) | ' | ($0.01) | ' | ' |
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share, Per-Share Amount (in dollars per share) | $0.10 | $0.32 | ($0.27) | ($1.03) |
EARNINGS_LOSS_PER_COMMON_SHARE3
EARNINGS (LOSS) PER COMMON SHARE - Antidilutive securities (Details) (Employee stock options, restricted stock units and deferred compensation units) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Employee stock options, restricted stock units and deferred compensation units | ' | ' |
Antidilutive securities | ' | ' |
Anti-dilutive securities excluded from computation of earnings per share | 2,332 | 827 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (Recurring basis, USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Total | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' |
Marketable securities-current | $2 | $1 |
Investments in Reserve Yield Plus Fund | 2 | 2 |
Marketable debt securities-noncurrent | 62 | 62 |
Investments | 66 | 65 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' |
Marketable securities-current | 2 | 1 |
Marketable debt securities-noncurrent | 26 | 23 |
Investments | 28 | 24 |
Estimated fair value of the long-term debt instrument as a percentage of carrying value | 103.80% | 103.50% |
Significant Other Observable Inputs (Level 2) | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' |
Investments in Reserve Yield Plus Fund | 2 | 2 |
Marketable debt securities-noncurrent | 35 | 38 |
Investments | 37 | 40 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Fair value of assets and liabilities measured on recurring basis | ' | ' |
Marketable debt securities-noncurrent | 1 | 1 |
Investments | $1 | $1 |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | 9 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Oct. 01, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Oct. 01, 2013 | |
plan | Series of individual business acquisitions | Series of individual business acquisitions | Series of individual business acquisitions | Series of individual business acquisitions | Series of individual business acquisitions | Series of individual business acquisitions | Vanguard | Vanguard | Vanguard | Vanguard | Vanguard | Vanguard | ||
Institution | Texas Regional Medical Center | Emanuel Medical Center | Ambulatory Surgery Centers | Urgent care centers | Other diagnostic imaging center | Institution | ||||||||
item | item | Institution | Institution | Institution | person | |||||||||
plan | ||||||||||||||
Business Acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition share price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $21 |
Number of hospitals | 80 | ' | ' | ' | ' | ' | ' | ' | 28 | ' | ' | ' | ' | ' |
Number of hospitals under construction | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' |
Number of outpatient centers acquired | ' | ' | ' | ' | ' | ' | ' | ' | 39 | ' | ' | ' | ' | ' |
Number of health plans | 6 | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' |
Number of members covered under the health plans | ' | ' | ' | ' | ' | ' | ' | ' | 140,000 | ' | ' | ' | ' | ' |
Number of licensed beds | ' | ' | ' | 70 | 209 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of ambulatory surgery centers | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of urgent care centers | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' |
Number of diagnostic imaging centers | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' |
Amount paid for acquisition, including assumed debt | ' | ' | $185,000,000 | ' | ' | ' | ' | ' | $4,300,000,000 | ' | ' | ' | ' | ' |
Assumed debt | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000,000 | ' | ' | ' | ' | ' |
Preliminary purchase price allocations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | 19,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 976,000,000 |
Property and equipment | ' | ' | 104,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,830,000,000 |
Other long-term assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 152,000,000 |
Other intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 155,000,000 |
Goodwill | 3,705,000,000 | 3,566,000,000 | 137,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,460,000,000 |
Current liabilities | ' | ' | -21,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,193,000,000 |
Deferred taxes - long term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -103,000,000 |
Other long-term liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -3,711,000,000 |
Long-term liabilities | ' | ' | -19,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | ' | ' | -21,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -258,000,000 |
Noncontrolling interests | ' | ' | -14,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -7,000,000 |
Net cash paid | ' | ' | 185,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,301,000,000 |
Transaction costs related to prospective and closed acquisitions | ' | ' | 7,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pro Forma Information - Unaudited | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,179,000,000 | 3,748,000,000 | 12,147,000,000 | 11,574,000,000 | ' |
Net income (loss) from continuing operations, before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,000,000 | ($220,000,000) | $6,000,000 | ($418,000,000) | ' |
SEGMENT_INFORMATION_General_In
SEGMENT INFORMATION - General Information and Customer Concentration (Details) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
SEGMENT INFORMATION | ' | ' |
Number of hospitals owned by subsidiaries | 80 | ' |
Number of licensed beds in hospitals operated by subsidiaries | 20,762 | ' |
Number of provider-based outpatient centers operated by subsidiaries | 198 | ' |
Number of health plans | 6 | ' |
Tenet and Catholic Health Initiatives | Conifer | ' | ' |
SEGMENT INFORMATION | ' | ' |
Number of customers | 2 | ' |
Tenet and Catholic Health Initiatives | Revenue | Customer | Conifer | ' | ' |
SEGMENT INFORMATION | ' | ' |
Percentage of concentration risk | 82.00% | 78.00% |
Minimum | Conifer | ' | ' |
SEGMENT INFORMATION | ' | ' |
Number of Tenet and non-Tenet Hospitals and other health care organizations to which Conifer provided revenue cycle services | 700 | ' |
SEGMENT_INFORMATION_Reconcilin
SEGMENT INFORMATION - Reconciling Items (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Assets | $17,312 | ' | $17,312 | ' | $16,450 |
Capital expenditures: | 211 | 142 | 734 | 398 | ' |
Net operating revenues | 4,179 | 2,408 | 12,147 | 7,217 | ' |
Adjusted EBITDA | 459 | 288 | 1,306 | 898 | ' |
Depreciation and amortization | 207 | 119 | 609 | 354 | ' |
Adjusted EBITDA and other reconciling items | ' | ' | ' | ' | ' |
Adjusted EBITDA | 459 | 288 | 1,306 | 898 | ' |
Depreciation and amortization | -207 | -119 | -609 | -354 | ' |
Impairment and restructuring charges, and acquisition-related costs | -37 | -20 | -90 | -45 | ' |
Litigation and investigation costs | -4 | -1 | -19 | -3 | ' |
Interest expense | -186 | -91 | -558 | -292 | ' |
Loss from early extinguishment of debt | -24 | ' | -24 | -348 | ' |
Investment earnings | ' | ' | ' | 1 | ' |
Net income (loss) from continuing operations, before income taxes | 1 | 57 | 6 | -143 | ' |
Hospital operations and other | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Assets | 16,988 | ' | 16,988 | ' | 16,194 |
Conifer | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Assets | 324 | ' | 324 | ' | 256 |
Operating segments | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Net operating revenues | 4,327 | 2,500 | 12,573 | 7,495 | ' |
Operating segments | Hospital operations and other | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Capital expenditures: | 207 | 139 | 717 | 387 | ' |
Net operating revenues | 4,031 | 2,275 | 11,707 | 6,840 | ' |
Adjusted EBITDA | 412 | 252 | 1,167 | 802 | ' |
Depreciation and amortization | 202 | 114 | 594 | 339 | ' |
Adjusted EBITDA and other reconciling items | ' | ' | ' | ' | ' |
Adjusted EBITDA | 412 | 252 | 1,167 | 802 | ' |
Depreciation and amortization | -202 | -114 | -594 | -339 | ' |
Operating segments | Conifer | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Capital expenditures: | 4 | 3 | 17 | 11 | ' |
Adjusted EBITDA | 47 | 36 | 139 | 96 | ' |
Depreciation and amortization | 5 | 5 | 15 | 15 | ' |
Adjusted EBITDA and other reconciling items | ' | ' | ' | ' | ' |
Adjusted EBITDA | 47 | 36 | 139 | 96 | ' |
Depreciation and amortization | -5 | -5 | -15 | -15 | ' |
Operating segments | Conifer | Tenet | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Net operating revenues | 148 | 92 | 426 | 278 | ' |
Operating segments | Conifer | Other customers | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Net operating revenues | 148 | 133 | 440 | 377 | ' |
Intercompany eliminations | ' | ' | ' | ' | ' |
SEGMENT INFORMATION | ' | ' | ' | ' | ' |
Net operating revenues | ($148) | ($92) | ($426) | ($278) | ' |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent event, Conifer, SPi Healthcare, USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Oct. 31, 2014 |
Subsequent event | Conifer | SPi Healthcare | ' |
Subsequent event | ' |
Base purchase price | $235 |