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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tenet Healthcare Corporation New | NYSE:THC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-5.04 | -3.79% | 127.93 | 132.86 | 127.61 | 132.51 | 1,152,001 | 21:20:11 |
Tenet Healthcare Corporation (Tenet) (NYSE: THC) today announced its results for the quarter ended December 31, 2019 (4Q19).
“Our financial results for 2019 support the sustainable changes we have made across each of our operating segments,” said Ronald A. Rittenmeyer, Executive Chairman and Chief Executive Officer. “We closed the year with a very strong fourth quarter and believe our focus on our patients, our physicians and all stakeholders — supported by underlying enhancements to technology, a renewed dedication to customer service and a keen eye on administrative expenses — are driving our growth and positioning us well for 2020 and future years.”
Tenet's results for 4Q19 versus the quarter ended December 31, 2018 (4Q18) and the year ended December 31, 2019 (FY 2019) versus the year ended December 31, 2018 (FY 2018) were as follows:
($ in millions, except per share results)
4Q19
4Q18
FY 2019
FY 2018
Net income (loss) from continuing operations attributable to Tenet common shareholders
$2
$(5)
$(243)
$108
Net income (loss) from continuing operations attributable to Tenet common shareholders per diluted share
$0.02
$(0.05)
$(2.35)
$1.04
Adjusted EBITDA
$805
$684
$2,706
$2,560
Adjusted diluted earnings per share from continuing operations
$0.99
$0.51
$2.68
$1.86
The table above as well as tables and discussions throughout this earnings release include certain financial measures that are not in accordance with Generally Accepted Accounting Principles (GAAP). Reconciliations of GAAP measures to the Adjusted (non-GAAP) measures used are detailed in Tables #1-6 included at the end of this earnings release. Management’s reasoning for the use of these non-GAAP measures and descriptions of the various non-GAAP measures are included in the Non-GAAP Financial Measures section of this earnings release.
Results from Continuing Operations Attributable to Tenet Common Shareholders
Adjusted Results from Continuing Operations Attributable to Tenet Common Shareholders
Reconciliations of net income available (loss attributable) to Tenet common shareholders to Adjusted net income from continuing operations available to Tenet's common shareholders are contained in Table #1 at the end of this release.
Adjusted EBITDA
Reconciliations of net income available (loss attributable) to Tenet common shareholders to Adjusted EBITDA are contained in Table #2 at the end of this release.
Hospital Operations and Other Segment Results
Tenet’s Hospital Operations and other business segment is comprised of acute care and specialty hospitals, ancillary outpatient facilities, freestanding urgent care centers (nearly all which are managed by USPI and operated under the MedPost brand), micro-hospitals and physician practices.
Hospital Operations and other segment results ($ in millions)
4Q19
4Q18
FY 2019
FY 2018
Net operating revenues
$3,983
$3,843
$15,522
$15,285
Same-hospital net patient services revenues (a)
$3,673
$3,490
$14,339
$13,707
Adjusted EBITDA
$407
$352
$1,425
$1,411
Admissions growth
2.6%
(2.7)%
2.3%
(1.7)%
Adjusted Admissions growth (b)
1.9%
(0.8)%
1.9%
0.0%
(a)
Same-hospital revenues and statistical data include those for the 65 hospitals operated by the Company’s Hospital Operations and other segment continuously from January 1, 2018 through December 31, 2019. Revenues and results for any hospitals acquired or disposed of during this time frame are excluded.
(b)
Adjusted admissions are hospital admissions adjusted to include outpatient admissions by multiplying actual patient admissions by the sum of gross inpatient revenues and outpatient revenues, then dividing that result by gross inpatient revenues.
Revenues and Volumes
Operating Expenses
Earnings
Ambulatory Care Segment Results
Tenet’s Ambulatory Care business segment is comprised of the operations of USPI. As of December 31, 2019, USPI had interests in 260 ambulatory surgery centers, 39 urgent care centers (nearly all of which operate under the CareSpot brand), 23 imaging centers and 24 surgical hospitals in 27 states. The Company owns 95 percent of USPI.
Ambulatory Care segment results
($ in millions)
4Q19
4Q18
FY 2019
FY 2018
Net operating revenues
$632
$554
$2,158
$2,085
Same-facility system-wide net patient services revenues (c)
$1,317
$1,226
$4,546
$4,286
Adjusted EBITDA
$304
$245
$895
$792
Adjusted EBITDA less facility-level NCI; excludes Aspen for FY 2018
$190
$151
$568
$488
Surgical cases growth
3.4%
1.1%
3.3%
2.1%
Total ambulatory cases growth
5.7%
0.9%
3.7%
3.4%
(c)
Same-facility system-wide revenues and statistical information include the results of many of the facilities in which the Ambulatory Care segment has an investment that are not consolidated by Tenet (of the 346 facilities at December 31, 2019, the results of 108 were accounted for under the equity method for unconsolidated affiliates). To help analyze the segment’s results of operations, management uses system-wide measures, which include revenues and cases of both consolidated and unconsolidated facilities.
Revenues and Volumes
Earnings
Conifer Segment Results
Tenet’s Conifer business segment provides healthcare business process services in the areas of hospital and physician revenue cycle management as well as value-based care solutions to healthcare systems, individual hospitals, physician practices, self-insured organizations, healthcare plans and other entities.
Conifer segment results
($ in millions)
4Q19
4Q18
FY 2019
FY 2018
Net operating revenues
$332
$372
$1,372
$1,533
Adjusted EBITDA
$94
$87
$386
$357
As previously announced, the Company anticipates a spin-off of its Conifer segment by the end of the second quarter of 2021. This transaction is expected to both enhance shareholder value and reduce the level of debt on Tenet through a tax-free debt-for-debt exchange.
Revenues
Earnings
Cash Flows and Liquidity
Balance Sheet
Cash flows
Reconciliations of net cash provided by operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.
Company Outlook
Tenet’s Outlook for FY 2020 and for 1Q20 on a consolidated basis and by segment follows:
CONSOLIDATED ($ in millions except per share amounts)
FY 2020 Outlook
1Q20 Outlook
Net operating revenues; includes CA Provider Fee revenues of approx. $239 million for FY 2020 and approx. $60 million for 1Q20
$19,100 to $19,500
$4,600 to $4,800
Net income (loss) from continuing operations attributable to Tenet common stockholders
$130 to $245
$(7) to $37
Adjusted EBITDA
$2,785 to $2,885
$625 to $675
Adjusted EBITDA margin
14.6% to 14.8%
13.6% to 14.1%
Diluted income (loss) per common share from continuing operations
$1.23 to $2.31
$(0.07) to $0.35
Adjusted net income from continuing operations
$285 to $355
$45 to $80
Adjusted diluted earnings per share from continuing operations
$2.69 to $3.35
$0.42 to $0.75
Equity in earnings of unconsolidated affiliates
$180 to $200
$30 to $40
Depreciation and amortization
$845 to $865
$205 to $215
Interest expense
$975 to $985
$240 to $250
Net income available to NCI
$450 to $470
$90 to $100
Weighted average diluted common shares
~ 106 million
~106 million
Effective tax rate (d)
22% to 23%
Net cash provided by operating activities
$1,250 to $1,525
Adjusted net cash provided by operating activities
$1,475 to $1,725
Capital expenditures
$700 to $750
Adjusted free cash flow
$775 to $975
NCI cash distributions
$350 to $370
(d)
The effective tax rate is calculated as income tax expense divided by the adjusted pretax income. Income tax expense is calculated by multiplying the corporate tax rate by the sum of: adjusted pretax income less GAAP NCI expense plus permanent differences, non-deductible interest, and non-cash NCI expense related to portion of USPI the Company does not own.
Hospital Operations and Other Segment ($ in millions)
FY 2020 Outlook
Comments
Net operating revenues
$15,965 to $16,215
Prior to intercompany eliminations of approx. $565 million for Conifer
Adjusted EBITDA
$1,430 to $1,490
NCI
~$10
Based on GAAP NCI expense
Net revenues growth
2.9% to 4.5%
Adjusted EBITDA growth
0.4% to 4.6%
Admissions growth
1.5% to 2.5%
On a same-hospital basis
Adjusted admissions growth
1.5% to 2.5%
On a same-hospital basis
Net revenues per adjusted admission growth
1.5% to 2.5%
On a same-hospital basis
Total costs per adjusted admission growth
2.5% to 3.5%
Ambulatory Care Segment ($ in millions)
FY 2020 Outlook
Comments
Net operating revenues
$2,350 to $2,450
Net revenues growth
8.9% to 13.5%
Adjusted EBITDA
$970 to $1,000
Adjusted EBITDA growth
8.4% to 11.7%
NCI
$365 to $385
Based on GAAP NCI expense
Adjusted EBITDA less NCI growth
9.2% to 10.9%
Facility-level NCI expense
Surgical cases growth
3.0% to 3.5%
On a same-facility system-wide basis; excludes non-surgical services
Net revenues per surgical case growth
2.0% to 2.5%
On a same-facility system-wide basis; excludes non-surgical services
Conifer Segment ($ in millions)
FY 2020 Outlook
Comments
Net operating revenues
$1,350 to $1,400
Adjusted EBITDA
$385 to $395
NCI
~$75
Based on GAAP NCI expense; no cash distributions to be made
Net revenues growth
(1.6%) to 2.0%
Adjusted EBITDA growth
(0.3%) to 2.3%
Management’s Webcast Discussion of Results and Outlook
Tenet management will discuss the Company’s 4Q19 and FY 2019 results, as well as the Company's Outlook for FY 2020, on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 25, 2020. Investors can access the webcast through the Company’s website at www.tenethealth.com/investors.
The slide presentation associated with the webcast referenced above, a copy of this earnings press release and a supplemental financial disclosure document will be available on the Company's Investor Relations website.
Cautionary Statement
This release contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address the Company's expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “assume,” “believe,” “budget,” “estimate,” “forecast,” “intend,” “plan,” “predict,” “project,” “seek,” “see,” “target,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause the Company's actual results to be materially different than those expressed in the Company's forward-looking statements include, but are not limited to, the factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2019 and other filings with the Securities and Exchange Commission.
About Tenet Healthcare
Tenet Healthcare Corporation (NYSE: THC) is a diversified healthcare services company headquartered in Dallas with 113,000 employees. Through an expansive care network that includes United Surgical Partners International, we operate 65 hospitals and approximately 500 other healthcare facilities, including surgical hospitals, ambulatory surgery centers, urgent care and imaging centers and other care sites and clinics. We also operate Conifer Health Solutions, which provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other customers. Across the Tenet enterprise, we are united by our mission to deliver quality, compassionate care in the communities we serve. For more information, please visit www.tenethealth.com.
Non-GAAP Financial Measures
The Company believes the foregoing non-GAAP measures are useful to investors and analysts because they present additional information on the Company’s financial performance. Investors, analysts, Company management and the Company’s Board of Directors utilize these non-GAAP measures, in addition to GAAP measures, to track the Company’s financial and operating performance and compare the Company’s performance to its peer companies, which use similar non-GAAP financial measures in their presentations and earnings releases. The Human Resources Committee of the Company’s Board of Directors also uses certain of these measures to evaluate management’s performance for the purpose of determining incentive compensation. Additional information regarding the purpose and utility of specific non-GAAP measures used in this release is set forth below.
The Company believes that Adjusted EBITDA is a useful measure, in part, because certain investors and analysts use both historical and projected Adjusted EBITDA, in addition to other GAAP and non-GAAP measures, as factors in determining the estimated fair value of shares of the Company’s common stock. Company management also regularly reviews the Adjusted EBITDA performance for each operating segment. The Company does not use Adjusted EBITDA to measure liquidity, but instead to measure operating performance.
The Company uses, and believes investors use, Free Cash Flow and Adjusted Free Cash Flow as supplemental non-GAAP measures to analyze cash flows generated from the Company's operations. The Company believes these measures are useful to investors in evaluating its ability to fund distributions paid to noncontrolling interests or for acquisitions, purchasing equity interests in joint ventures or repaying debt.
These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Because these measures exclude many items that are included in the Company's financial statements, they do not provide a complete measure of the Company's operating performance. For example, the Company's definitions of Free Cash Flow and Adjusted Free Cash Flow do not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company's Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, (ii) distributions paid to noncontrolling interests, or (iii) payments under the Put/Call Agreement for USPI redeemable noncontrolling interest, which are recorded on the Statement of Cash Flows as the purchase of noncontrolling interest. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company's financial performance.
Tenet Healthcare Corporation
Financial Statements and Reconciliations
4Q19 Earnings Release
Table of Contents
Description
Page
Consolidated Statements of Operations - quarters
13
Consolidated Statements of Operations - years
14
Consolidated Balance Sheets
15
Consolidated Statements of Cash Flows
16
Segment Reporting
17
Table #1 - Reconciliations of Net Income to Adjusted Net Income
18
Table #2 - Reconciliations of Net Income to Adjusted EBITDA
20
Table #3 - Reconciliations of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow
22
Table #4 - Reconciliations of Outlook Net Income to Outlook Adjusted EBITDA
23
Table #5 - Reconciliations of Outlook Net Income to Outlook Adjusted Net Income
24
Table #6 - Reconciliations of Outlook Net Cash Provided by Operating Activities to Outlook Free Cash Flow and Outlook Adjusted Free Cash Flow
24
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions except per share amounts)
Three Months Ended December 31,
2019
%
2018
%
Change
Net operating revenues
$
4,806
100.0
%
$
4,619
100.0
%
4.0
%
Equity in earnings of unconsolidated affiliates
61
1.3
%
53
1.1
%
15.1
%
Operating expenses:
Salaries, wages and benefits
2,229
46.4
%
2,156
46.7
%
3.4
%
Supplies
803
16.7
%
756
16.4
%
6.2
%
Other operating expenses, net
1,030
21.5
%
1,076
23.3
%
(4.3
)%
Depreciation and amortization
223
4.6
%
200
4.3
%
Impairment and restructuring charges, and acquisition-related costs
84
1.7
%
86
1.9
%
Litigation and investigation costs
26
0.5
%
10
0.2
%
Net losses (gains) on sales, consolidation and deconsolidation of facilities
12
0.3
%
(16
)
(0.4
)%
Operating income
460
9.6
%
404
8.7
%
Interest expense
(243
)
(246
)
Other non-operating expense, net
(2
)
(3
)
Gain from early extinguishment of debt
—
3
Income from continuing operations, before income taxes
215
158
Income tax expense
(86
)
(56
)
Income from continuing operations, before discontinued operations
129
102
Discontinued operations:
Income from operations
2
1
Income tax expense
(2
)
(1
)
Income (loss) from discontinued operations
—
—
Net income
129
102
Less: Net income available to noncontrolling interests
127
107
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
2
$
(5
)
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax
$
2
$
(5
)
Income (loss) from discontinued operations, net of tax
—
—
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
2
$
(5
)
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations
$
0.02
$
(0.05
)
Discontinued operations
—
—
$
0.02
$
(0.05
)
Diluted
Continuing operations
$
0.02
$
(0.05
)
Discontinued operations
—
—
$
0.02
$
(0.05
)
Weighted average shares and dilutive securities outstanding
(in thousands):
Basic
104,048
102,501
Diluted*
105,666
102,501
*
Had the Company generated income from continuing operations in the three months ended December 31, 2018, the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,617 thousand shares.
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions except per share amounts)
Years Ended December 31,
2019
%
2018
%
Change
Net operating revenues
$
18,479
100.0
%
$
18,313
100.0
%
0.9
%
Equity in earnings of unconsolidated affiliates
175
0.9
%
150
0.8
%
16.7
%
Operating expenses:
Salaries, wages and benefits
8,704
47.1
%
8,634
47.1
%
0.8
%
Supplies
3,057
16.5
%
3,004
16.4
%
1.8
%
Other operating expenses, net
4,189
22.6
%
4,256
23.3
%
(1.6
)%
Depreciation and amortization
850
4.6
%
802
4.4
%
Impairment and restructuring charges, and acquisition-related costs
185
1.0
%
209
1.1
%
Litigation and investigation costs
141
0.8
%
38
0.2
%
Net losses (gains) on sales, consolidation and deconsolidation of facilities
15
0.1
%
(127
)
(0.7
)%
Operating income
1,513
8.2
%
1,647
9.0
%
Interest expense
(985
)
(1,004
)
Other non-operating expense, net
(5
)
(5
)
Gain (loss) from early extinguishment of debt
(227
)
1
Income from continuing operations, before income taxes
296
639
Income tax expense
(153
)
(176
)
Income from continuing operations, before discontinued operations
143
463
Discontinued operations:
Income from operations
15
4
Income tax expense
(4
)
(1
)
Income from discontinued operations
11
3
Net income
154
466
Less: Net income available to noncontrolling interests
386
355
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
(232
)
$
111
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax
$
(243
)
$
108
Income from discontinued operations, net of tax
11
3
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
(232
)
$
111
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations
$
(2.35
)
$
1.06
Discontinued operations
0.11
0.03
$
(2.24
)
$
1.09
Diluted
Continuing operations
$
(2.35
)
$
1.04
Discontinued operations
0.11
0.03
$
(2.24
)
$
1.07
Weighted average shares and dilutive securities outstanding
(in thousands):
Basic
103,398
102,110
Diluted*
103,398
103,881
*
Had the Company generated income from continuing operations in the twelve months ended December 31, 2019, the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,457 thousand shares.
TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31,
December 31,
(Dollars in millions)
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
262
$
411
Accounts receivable
2,743
2,595
Inventories of supplies, at cost
310
305
Income tax receivable
10
21
Assets held for sale
387
107
Other current assets
1,369
1,197
Total current assets
5,081
4,636
Investments and other assets
2,369
1,456
Deferred income taxes
169
312
Property and equipment, at cost, less accumulated depreciation and amortization
6,878
6,993
Goodwill
7,252
7,281
Other intangible assets, at cost, less accumulated amortization
1,602
1,731
Total assets
$
23,351
$
22,409
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
171
$
182
Accounts payable
1,204
1,207
Accrued compensation and benefits
877
838
Professional and general liability reserves
330
216
Accrued interest payable
245
240
Liabilities held for sale
44
43
Other current liabilities
1,334
1,131
Total current liabilities
4,205
3,857
Long-term debt, net of current portion
14,580
14,644
Professional and general liability reserves
585
666
Defined benefit plan obligations
560
521
Deferred income taxes
27
36
Other long-term liabilities
1,405
578
Total liabilities
21,362
20,302
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries
1,506
1,420
Equity:
Shareholders’ equity:
Common stock
7
7
Additional paid-in capital
4,760
4,747
Accumulated other comprehensive loss
(257
)
(223
)
Accumulated deficit
(2,467
)
(2,236
)
Common stock in treasury, at cost
(2,414
)
(2,414
)
Total shareholders’ deficit
(371
)
(119
)
Noncontrolling interests
854
806
Total equity
483
687
Total liabilities and equity
$
23,351
$
22,409
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Years Ended
(Dollars in millions)
December 31,
2019
2018
Net income
$
154
$
466
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
850
802
Deferred income tax expense
137
150
Stock-based compensation expense
42
46
Impairment and restructuring charges, and acquisition-related costs
185
209
Litigation and investigation costs
141
38
Net losses (gains) on sales, consolidation and deconsolidation of facilities
15
(127
)
Loss (gain) from early extinguishment of debt
227
(1
)
Equity in earnings of unconsolidated affiliates, net of distributions received
(32
)
(12
)
Amortization of debt discount and debt issuance costs
35
45
Pre-tax income from discontinued operations
(15
)
(4
)
Other items, net
(15
)
(21
)
Changes in cash from operating assets and liabilities:
Accounts receivable
(247
)
(134
)
Inventories and other current assets
(94
)
17
Income taxes
8
(3
)
Accounts payable, accrued expenses and other current liabilities
36
(152
)
Other long-term liabilities
3
(102
)
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements
(192
)
(163
)
Net cash used in operating activities from discontinued operations, excluding income taxes
(5
)
(5
)
Net cash provided by operating activities
1,233
1,049
Cash flows from investing activities:
Purchases of property and equipment — continuing operations
(670
)
(617
)
Purchases of businesses or joint venture interests, net of cash acquired
(25
)
(113
)
Proceeds from sales of facilities and other assets — continuing operations
63
543
Proceeds from sales of facilities and other assets — discontinued operations
17
—
Proceeds from sales of marketable securities, long-term investments and other assets
82
199
Purchases of marketable securities and equity investments
(62
)
(148
)
Other long-term assets
(24
)
15
Other items, net
—
6
Net cash used in investing activities
(619
)
(115
)
Cash flows from financing activities:
Repayments of borrowings under credit facility
(2,640
)
(950
)
Proceeds from borrowings under credit facility
2,640
950
Repayments of other borrowings
(6,131
)
(312
)
Proceeds from other borrowings
5,719
23
Debt issuance costs
(70
)
—
Distributions paid to noncontrolling interests
(307
)
(288
)
Proceeds from sale of noncontrolling interests
21
20
Purchases of noncontrolling interests
(11
)
(647
)
Proceeds from exercise of stock options and employee stock purchase plan
12
16
Other items, net
4
54
Net cash used in financing activities
(763
)
(1,134
)
Net decrease in cash and cash equivalents
(149
)
(200
)
Cash and cash equivalents at beginning of period
411
611
Cash and cash equivalents at end of period
$
262
$
411
Supplemental disclosures:
Interest paid, net of capitalized interest
$
(946
)
$
(976
)
Income tax payments, net
$
(12
)
$
(25
)
TENET HEALTHCARE CORPORATION
SEGMENT REPORTING
(Unaudited)
(Dollars in millions)
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Net operating revenues:
Hospital Operations and other total prior to inter-segment eliminations(1)
$
3,983
$
3,843
$
15,522
$
15,285
Ambulatory Care
632
554
2,158
2,085
Conifer
Tenet
141
150
573
590
Other clients
191
222
799
943
Total Conifer revenues
332
372
1,372
1,533
Inter-segment eliminations
(141
)
(150
)
(573
)
(590
)
Total
$
4,806
$
4,619
$
18,479
$
18,313
Equity in earnings of unconsolidated affiliates:
Hospital Operations and other
$
3
$
4
$
15
$
10
Ambulatory Care
58
49
160
140
Total
$
61
$
53
$
175
$
150
Adjusted EBITDA:
Hospital Operations and other(2)
$
407
$
352
$
1,425
$
1,411
Ambulatory Care
304
245
895
792
Conifer
94
87
386
357
Total
$
805
$
684
$
2,706
$
2,560
Capital expenditures:
Hospital Operations and other
$
149
$
184
$
572
$
527
Ambulatory Care
18
22
75
68
Conifer
11
7
23
22
Total
$
178
$
213
$
670
$
617
(1)
Hospital Operations and other revenues includes health plan revenues of $1 million and $14 million for the twelve months ended December 31, 2019 and 2018, respectively.
(2)
Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of $(2) million and $9 million for the twelve months ended December 31, 2019 and 2018, respectively.
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #1 – Reconciliation of Net Income Available (Loss Attributable) to
Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders for 2019
(Unaudited)
(Dollars in millions except per share amounts)
2019
4th Qtr
Full Year
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
2
$
(232
)
Net income from discontinued operations
—
11
Net income (loss) from continuing operations
2
(243
)
Less: Impairment and restructuring charges, and acquisition-related costs
(84
)
(185
)
Litigation and investigation costs
(26
)
(141
)
Net losses on sales, consolidation and deconsolidation of facilities
(12
)
(15
)
Loss from early extinguishment of debt
—
(227
)
Loss from divested and closed businesses
—
(2
)
Noncontrolling interest impact
—
4
Tax impact of above items
19
42
Adjusted net income available from continuing operations to common shareholders
$
105
$
281
Diluted earnings (loss) per share from continuing operations
$
0.02
$
(2.35
)
Less: Impairment and restructuring charges, and acquisition-related costs
(0.79
)
(1.76
)
Litigation and investigation costs
(0.25
)
(1.34
)
Net losses on sales, consolidation and deconsolidation of facilities
(0.11
)
(0.14
)
Loss from early extinguishment of debt
—
(2.16
)
Loss from divested and closed businesses
—
(0.02
)
Noncontrolling interest impact
—
0.04
Tax impact of above items
0.18
0.40
Adjusted diluted earnings per share from continuing operations
$
0.99
$
2.68
Weighted average basic shares outstanding (in thousands)
104,048
103,398
Weighted average dilutive shares outstanding (in thousands)
105,666
104,855
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #1 – Reconciliation of Net Income Available (Loss Attributable) to
Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders for 2018
(Unaudited)
(Dollars in millions except per share amounts)
2018
4th Qtr
Full Year
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
(5
)
$
111
Net income from discontinued operations
—
3
Net income (loss) from continuing operations
(5
)
108
Less: Impairment and restructuring charges, and acquisition-related costs
(86
)
(209
)
Litigation and investigation costs
(10
)
(38
)
Net gains on sales, consolidation and deconsolidation of facilities
16
127
Gain from early extinguishment of debt
3
1
Income from divested and closed businesses
—
9
Tax impact of above items
19
25
Adjusted net income available from continuing operations to common shareholders
$
53
$
193
Diluted earnings (loss) per share from continuing operations
$
(0.05
)
$
1.04
Less: Impairment and restructuring charges, and acquisition-related costs
(0.83
)
(2.01
)
Litigation and investigation costs
(0.10
)
(0.37
)
Net gains on sales, consolidation and deconsolidation of facilities
0.15
1.22
Gain from early extinguishment of debt
0.03
0.01
Income from divested and closed businesses
—
0.09
Tax impact of above items
0.18
0.24
Adjusted diluted earnings per share from continuing operations
$
0.51
$
1.86
Weighted average basic shares outstanding (in thousands)
102,501
102,110
Weighted average dilutive shares outstanding (in thousands)
104,118
103,881
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #2 – Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA for 2019
(Unaudited)
(Dollars in millions)
2019
4th Qtr
Full Year
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
2
(232
)
Less: Net income available to noncontrolling interests
(127
)
(386
)
Income from discontinued operations, net of tax
—
11
Income from continuing operations
129
143
Income tax expense
(86
)
(153
)
Loss from early extinguishment of debt
—
(227
)
Other non-operating expense, net
(2
)
(5
)
Interest expense
(243
)
(985
)
Operating income
460
1,513
Litigation and investigation costs
(26
)
(141
)
Net losses on sales, consolidation and deconsolidation of facilities
(12
)
(15
)
Impairment and restructuring charges, and acquisition-related costs
(84
)
(185
)
Depreciation and amortization
(223
)
(850
)
Loss from divested and closed businesses
—
(2
)
Adjusted EBITDA
$
805
$
2,706
Net operating revenues
$
4,806
$
18,479
Less: Net operating revenues from health plans
—
1
Adjusted net operating revenues
$
4,806
$
18,478
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders as a % of net operating revenues
—
%
(1.3
)%
Adjusted EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA margin)
16.7
%
14.6
%
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #2 – Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA for 2018
(Unaudited)
(Dollars in millions)
2018
4th Qtr
Full Year
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
(5
)
$
111
Less: Net income available to noncontrolling interests
(107
)
(355
)
Income from discontinued operations, net of tax
—
3
Income from continuing operations
102
463
Income tax expense
(56
)
(176
)
Gain from early extinguishment of debt
3
1
Other non-operating expense, net
(3
)
(5
)
Interest expense
(246
)
(1,004
)
Operating income
404
1,647
Litigation and investigation costs
(10
)
(38
)
Net gains on sales, consolidation and deconsolidation of facilities
16
127
Impairment and restructuring charges, and acquisition-related costs
(86
)
(209
)
Depreciation and amortization
(200
)
(802
)
Income from divested and closed businesses
—
9
Adjusted EBITDA
$
684
$
2,560
Net operating revenues
$
4,619
$
18,313
Less: Net operating revenues from health plans
—
14
Adjusted net operating revenues
$
4,619
$
18,299
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders as a % of net operating revenues
(0.1
)%
0.6
%
Adjusted EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA margin)
14.8
%
14.0
%
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #3 – Reconciliations of Net Cash Provided By Operating Activities to Free Cash Flow and Adjusted Free Cash Flow from Continuing Operations
(Unaudited)
(Dollars in millions)
2019
4th Qtr
Full Year
Net cash provided by operating activities
$
520
$
1,233
Purchases of property and equipment
(178
)
(670
)
Free cash flow
$
342
$
563
Net cash used in investing activities
$
(193
)
$
(619
)
Net cash used in financing activities
$
(379
)
$
(763
)
Net cash provided by operating activities
$
520
$
1,233
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements
(56
)
(192
)
Net cash used in operating activities from discontinued operations
(1
)
(5
)
Adjusted net cash provided by operating activities from continuing operations
577
1,430
Purchases of property and equipment
(178
)
(670
)
Adjusted free cash flow – continuing operations
$
399
$
760
(Dollars in millions)
2018
4th Qtr
Full Year
Net cash provided by operating activities
$
250
$
1,049
Purchases of property and equipment
(213
)
(617
)
Free cash flow
$
37
$
432
Net cash used in investing activities
$
(235
)
$
(115
)
Net cash used in financing activities
$
(104
)
$
(1,134
)
Net cash provided by operating activities
$
250
$
1,049
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements
(50
)
(163
)
Net cash used in operating activities from discontinued operations
(1
)
(5
)
Adjusted net cash provided by operating activities from continuing operations
301
1,217
Purchases of property and equipment
(213
)
(617
)
Adjusted free cash flow – continuing operations
$
88
$
600
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #4 – Reconciliation of Outlook Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted EBITDA
(Unaudited)
(Dollars in millions)
Q1 2020
2020
Low
High
Low
High
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
(7
)
$
37
$
130
$
245
Less: Net income available to noncontrolling interests
(90
)
(100
)
(450
)
(470
)
Income tax expense
(17
)
(33
)
(190
)
(210
)
Interest expense
(250
)
(240
)
(985
)
(975
)
Other non-operating expense, net
(5
)
—
(5
)
5
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1)
(60
)
(50
)
(175
)
(125
)
Depreciation and amortization
(205
)
(215
)
(845
)
(865
)
Loss from divested and closed businesses
(5
)
—
(5
)
—
Adjusted EBITDA
$
625
$
675
$
2,785
$
2,885
Income (loss) from continuing operations
$
(7
)
$
37
$
130
$
245
Net operating revenues
$
4,600
$
4,800
$
19,100
$
19,500
Income from continuing operations as a % of operating revenues
(0.2
)%
0.8
%
0.7
%
1.3
%
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)
13.6
%
14.1
%
14.6
%
14.8
%
(1)
The Company has provided an estimate of restructuring charges it anticipates in 2020. The Company does not generally forecast impairment charges, acquisition-related costs, litigation costs and settlements because it does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook.
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #5 – Reconciliation of Outlook Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted Net Income Available from Continuing Operations to Common Shareholders
(Unaudited)
(Dollars in millions except per share amounts)
Q1 2020
2020
Low
High
Low
High
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
$
(7
)
$
37
$
130
$
245
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements
(60
)
(50
)
(175
)
(125
)
Loss from divested and closed businesses
(5
)
—
(5
)
—
Tax impact of above items
13
7
25
15
Noncontrolling interests impact of above items
—
—
—
—
Adjusted net income available from continuing operations to common shareholders
$
45
$
80
$
285
$
355
Diluted earnings (loss) per share from continuing operations
$
(0.07
)
$
0.35
$
1.23
$
2.31
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements
(0.57
)
(0.47
)
(1.65
)
(1.18
)
Loss from divested and closed businesses
(0.05
)
—
(0.05
)
—
Tax impact of above items
0.12
0.07
0.24
0.14
Noncontrolling interests impact of above items
—
—
—
—
Adjusted diluted earnings per share from continuing operations
$
0.42
$
0.75
$
2.69
$
3.35
Weighted average basic shares outstanding (in thousands)
104,000
104,000
105,000
105,000
Weighted average dilutive shares outstanding (in thousands)
106,000
106,000
106,000
106,000
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #6 – Reconciliation of Outlook Net Cash Provided by Operating Activities to Outlook Adjusted Free Cash Flow from Continuing Operations
(Dollars in millions)
2020
Low
High
Net cash provided by operating activities
$
1,250
$
1,525
Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1)
(225
)
(200
)
Adjusted net cash provided by operating activities – continuing operations
1,475
1,725
Purchases of property and equipment – continuing operations
(700
)
(750
)
Adjusted free cash flow – continuing operations(2)
$
775
$
975
(1)
The Company has provided an estimate of payments that it anticipates in 2020 related to restructuring charges as well as litigation costs and settlements. The Company does not generally forecast payments related to acquisition-related costs and litigation costs and settlements because it does not believe that it can forecast these items with sufficient accuracy since some of these items may be indeterminable at the time the Company provides its financial Outlook.
(2)
The Company's definition of Adjusted Free Cash Flow does not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company's Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, and (ii) distributions paid to noncontrolling interests.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200224005922/en/
Investor Contact Regina Nethery 469-893-2387 regina.nethery@tenethealth.com Media Contact Lesley Bogdanow 469-893-2640 mediarelations@tenethealth.com
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