Exhibit 99.1



tenet_logo.jpg
 
Tenet Reports Results for the First Quarter Ended March 31, 2018

Same-hospital net patient revenue grew 6.7%. Admissions increased 0.3%, adjusted admissions increased 0.6%, and revenue per adjusted admission increased 6.0%.
Ambulatory Care same-facility system-wide revenue grew 2.7%, with cases up 3.2% and revenue per case down 0.5%. Surgical revenue grew 2.3%, with cases down 0.5% and revenue per surgical case up 2.8%.
Conifer’s revenues increased 0.5% with revenue from third parties up 4.5%.
Tenet reported net income from continuing operations available to Tenet shareholders of $98 million or $0.95 per diluted share in the first quarter compared to a net loss of $52 million or $0.52 per diluted share in the first quarter of 2017. After adjusting for certain items, which totaled $39 million or $0.38 per share in the first quarter of 2018, Tenet reported Adjusted diluted earnings per share from continuing operations of $0.57 in the first quarter of 2018 compared to an Adjusted diluted loss per share of $0.27 in the first quarter of 2017.
Adjusted EBITDA was $665 million in the first quarter of 2018 compared to $527 million in the first quarter of 2017. Adjusted EBITDA in the first quarter of 2018 consisted of $402 million in the Hospital segment, $165 million in the Ambulatory segment and $98 million in the Conifer segment.
Net cash provided by operating activities was $113 million compared to $186 million in the first quarter of 2017; the $73 million decrease was primarily due to an anticipated $82 million reduction in receipts related to the California Provider Fee program. Free Cash Flow was an outflow of $30 million, a decrease of $18 million when compared to an outflow of $12 million in the first quarter of 2017. Adjusted Free Cash Flow was $4 million, a $6 million decrease when compared to $10 million in the first quarter of 2017.
2018 Outlook has been increased to reflect net income from continuing operations attributable to Tenet common shareholders of $105 million to $180 million, Adjusted EBITDA of $2.550 billion to $2.650 billion, diluted earnings per share from continuing operations of $1.02 to $1.75 and Adjusted diluted earnings per share from continuing operations of $1.36 to $1.70.

DALLAS - April 30, 2018 - Tenet Healthcare Corporation (NYSE: THC) reported net income from continuing operations available to Tenet shareholders of $98 million in the first quarter of 2018, compared to a $52 million net loss from continuing operations in the first quarter of 2017. Adjusted EBITDA was $665 million in the first quarter of 2018 compared to $527 million in the first quarter of 2017.

“The actions we have taken to be a more efficient, agile and decisive organization have resulted in stronger financial performance,” said Ronald A. Rittenmeyer, executive chairman and CEO.  “We





are continuing our focus on improving quality, growth and financial results and will be exploring additional opportunities to enhance margins and shareholder returns.”

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $3.947 billion, down 4.1 percent from the first quarter of 2017, primarily due to divestitures and a decline in health plan revenues.

On a same-hospital basis, net patient revenues after implicit price concessions (as discussed below in the section titled “New Revenue Recognition Accounting Rules and Uncompensated Care”) was $3.594 billion, up 6.7 percent from the first quarter of 2017. Adjusted admissions were up 0.6 percent and revenue per adjusted admission was up 6.0 percent, with 190 basis points related to the California Provider Fee and a benefit from increased acuity. Same-hospital revenue included $64 million from the California Provider Fee Program in the first quarter of 2018 compared to no revenue in the first quarter of 2017 since the 2017 program was not approved until December 2017.

Adjusted EBITDA in Tenet’s hospital segment was $402 million, an increase of $93 million or 30.1 percent as compared to $309 million in the first quarter of 2017. The $93 million increase in Adjusted EBITDA in the hospital segment was primarily driven by: (i) a $64 million increase in California Provider Fee revenue, (ii) a $12 million favorable adjustment in Q1’18 to malpractice and workers’ compensation expense related to an increase in the discount rate, (iii) strong cost management within the company’s hospital operations and corporate overhead functions, and (iv) increased acuity, which were partially offset by divestiture activity.

Tenet’s health plan business recognized $6 million of revenue and a $1 million EBITDA loss in the first quarter of 2018 versus $65 million of revenue and a $16 million loss in the first quarter of 2017. The revenue and expenses associated with the Company’s health plan operations are included in Tenet’s consolidated statements of operations; however, the results are excluded from Adjusted EBITDA in both periods.

Selected operating expenses in the segment, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 2.7 percent on a per adjusted admission basis in the first quarter of 2017.

Exchanges

Same-hospital exchange outpatient visits were 49,680 in the first quarter of 2018, up 11.4 percent from the first quarter of 2017. Tenet’s same-hospital exchange admissions were 4,677 in the first quarter of 2018, down 1.1 percent from the first quarter of 2017.

Ambulatory Care Segment

During the first quarter of 2018, the Ambulatory segment produced net operating revenues of $498 million, representing an increase of 9.5 percent as compared to $455 million in the first quarter

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of 2017. In addition, the Ambulatory segment generated Adjusted EBITDA of $165 million, up 7.8 percent from $153 million in the first quarter of 2017 and Adjusted EBITDA less facility-level noncontrolling interest was $109 million, up 9.0 percent from $100 million in the first quarter of 2017.

The results of many of the facilities in which the Ambulatory segment has an investment are not consolidated by Tenet. To help analyze the segment’s results of operations, management uses system-wide measures, which include revenues and cases of both consolidated and unconsolidated facilities. On a same-facility system-wide basis, revenue in the Ambulatory segment increased 2.7 percent, with cases increasing 3.2 percent and revenue per case declining 0.5 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 2.3 percent, with cases down 0.5 percent and revenue per case up 2.8 percent, reflecting growth in higher-acuity surgical procedures. In the non-surgical business, same-facility system-wide revenue grew 11.8 percent, with revenue per case up 2.8 percent and cases up 8.7 percent, reflecting strong growth in urgent care visits due in part to the elevated flu season.

Conifer Segment

During the first quarter of 2018, Conifer’s revenue increased 0.5 percent to $404 million, up from $402 million in the first quarter of 2017. Revenue from third party customers grew 4.5 percent to $254 million. Conifer’s revenue in the first quarter of 2018 included $10 million of contract termination fees related to one of Conifer’s customers selling its hospital to a system that chose to insource revenue cycle management.

Conifer generated $98 million of Adjusted EBITDA in the first quarter of 2018, up 50.8 percent from $65 million in the first quarter of 2017. After normalizing for two items that increased Conifer’s Adjusted EBITDA by $13 million in the first quarter of 2018, Adjusted EBITDA grew by 31 percent, primarily driven by improvements in Conifer’s cost structure. The two items totaling $13 million were the aforementioned $10 million contract termination fee and $3 million in customer incentive payments.

Net Income and Earnings Per Share

Tenet reported net income from continuing operations available to Tenet shareholders of $98 million, or $0.95 per diluted share, in the first quarter of 2018 compared to a net loss of $52 million, or $0.52 per diluted share, in the first quarter of 2017.

As shown on Table #2, net income from continuing operations available to Tenet shareholders of $98 million included: (i) $47 million of pre-tax impairment and restructuring charges consisting of $19 million of impairment charges primarily from the write-down of assets held for sale in the Chicago area to their estimated fair value, $25 million of restructuring charges primarily related to employee severance associated with the Company’s cost reduction initiatives, and $3 million of acquisition-related costs; (ii) a $110 million pre-tax gain on sales, consolidation and deconsolidation of facilities, primarily related to a $98 million pre-tax gain on the sale of MacNeal Hospital in the Chicago area on March 1, 2018 and a $13 million pre-tax gain on the sales of our minority interests

Page 3



in several Dallas-area hospitals; and (iii) an $8 million pre-tax loss from other items. These items collectively increased pre-tax income by $55 million, after-tax income by $39 million and diluted earnings per share by $0.38.

After adjusting for the items listed above and on Table #2, Tenet produced Adjusted net income from continuing operations available to Tenet shareholders of $59 million, or $0.57 per diluted share, during the first quarter of 2018, as compared to an Adjusted net loss from continuing operations attributable to Tenet shareholders of $27 million, or $0.27 per diluted share, in the first quarter of 2017.

A reconciliation of GAAP net income (loss) available to Tenet shareholders to Adjusted net income (loss) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations available to Tenet shareholders is contained in Table #2 at the end of this release.

Cash Flow and Liquidity

Cash and cash equivalents were $974 million at March 31, 2018 compared to $611 million at December 31, 2017. The Company had no outstanding borrowings on its $1 billion credit line as of March 31, 2018. Accounts receivable days outstanding from continuing operations were 54.3 at March 31, 2018 compared to 55.8 at December 31, 2017.

Net cash provided by operating activities was $113 in the first quarter of 2018, representing a $73 million decrease compared to $186 million in the first quarter of 2017. After subtracting $143 million and $198 million of capital expenditures in the first quarters of 2018 and 2017, respectively, Free Cash Flow was an outflow of $30 million in the first quarter of 2018, a decline of $18 million compared to an outflow of $12 million in the first quarter of 2017. Adjusted Free Cash Flow was $4 million in the first quarter of 2018, representing a $6 million decrease from $10 million in the first quarter of 2017. The year-over-year declines in net cash provided by operating activities, free cash flow and adjusted free cash flow were primarily due to an anticipated $82 million reduction in receipts related to the California Provider Fee program.

Net cash provided by investing activities was $373 million in the first quarter of 2018 compared to $189 million of net cash used in investing activities in the first quarter of 2017. The 2018 period included $559 million of proceeds from the sales of facilities, long-term investments and other assets, primarily from the sale of the Company’s two hospitals in the Philadelphia area, MacNeal Hospital and the Company’s minority interest in several Dallas-area hospitals.

Net cash used in financing activities was $123 million in the first quarter of 2018 compared to $141 million of net cash used in financing activities in the first quarter of 2017. The 2018 period included $50 million of debt retirement through open market purchases.

Reconciliations of net cash provided by operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.


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Outlook

The Company’s revised Outlook for 2018 includes:

Revenue of $17.9 billion to $18.3 billion,
Net income from continuing operations available to Tenet common shareholders of $105 million to $180 million,
Adjusted EBITDA of $2.550 billion to $2.650 billion,
Net cash provided by operating activities of $1.245 billion to $1.550 billion,
Adjusted Free Cash Flow of $725 million to $925 million,
Diluted earnings per share from continuing operations available to Tenet shareholders of $1.02 to $1.75, and
Adjusted diluted earnings per share from continuing operations available to Tenet shareholders of $1.36 to $1.70.

The Company raised the midpoint of its previous 2018 Adjusted EBITDA Outlook range by $50 million to reflect higher expectations for Conifer, primarily as a result of the business achieving improvements in its cost structure on a faster pace than previously anticipated.

The Outlook for 2018 assumes equity in earnings of unconsolidated affiliates of $160 million to $170 million, net income attributable to noncontrolling interests of $410 million to $430 million and an average diluted share count of 103 million. The Outlook for net income attributable to noncontrolling interests reflects a reduction in noncontrolling interest expense as a result of Tenet increasing its ownership in USPI from 80 percent to 95 percent, effective April 26, 2018, substantially offset by increased noncontrolling interest expense at Conifer resulting from our increased expectations for Conifer’s net income this year.

The Company’s Outlook for the second quarter of 2018 includes:

Revenue of $4.475 billion to $4.675 billion,
Net income from continuing operations available to Tenet shareholders ranging from a loss of $5 million to income of $10 million,
Adjusted EBITDA of $605 million to $655 million,
Earnings per diluted share from continuing operations available to Tenet shareholders ranging from a loss of $0.05 to earnings of $0.10, and
Adjusted earnings per diluted share from continuing operations available to Tenet shareholders ranging from $0.15 to $0.29.

The Outlook for the second quarter assumes equity in earnings of unconsolidated affiliates of $35 million to $40 million, net income attributable to noncontrolling interests of $95 million to $105 million, and an average diluted share count of 102 million.


Page 5



Additional details on Tenet’s Outlook for both the second quarter and calendar year 2018 are available in Tables #4, #5 and #6 at the end of this press release and in an accompanying slide presentation that is accessible through the Company’s website at www.tenethealth.com/investors.

New Revenue Recognition Accounting Rules and Uncompensated Care

Effective January 1, 2018, Tenet adopted the Financial Accounting Standards Board Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) using a modified retrospective method of application. For our Hospital Operations and other and Ambulatory Care segments, the adoption of ASU 2014-09 resulted in changes to our presentation for and disclosure of revenue primarily related to uninsured or underinsured patients. Prior to the adoption of ASU 2014-09, a significant portion of our provision for doubtful accounts related to self-pay patients, as well as co-pays, co-insurance amounts and deductibles owed to us by patients with insurance. Under ASU 2014-09, the estimated uncollectable amounts due from these patients are generally considered implicit price concessions that are a direct reduction to net operating revenues, with a corresponding material reduction in the amounts previously considered provision for doubtful accounts. Since implicit price concessions are essentially similar to provision for doubtful accounts, for comparability purposes with the 2017 period implicit price concessions in the 2018 quarter are compared to provision for doubtful accounts in the 2017 quarter.

Tenet’s implicit price concessions in the first quarter of 2018 were $347 million, representing a ratio of 6.9 percent of revenues before these items compared to $383 million in the first quarter of 2017, or 7.4 percent of revenues. The decrease in this ratio was primarily attributable to hospital divestitures, revenue growth in our Ambulatory segment, and revenue from the California Provider Fee program revenue being recorded in the first quarter of 2018.

Tenet’s uncompensated care costs, defined as the sum of implicit price concessions, provision for doubtful accounts, charity care write-offs and uninsured discounts, were $1.362 billion and $1.342 billion in the first quarters of 2018 and 2017, respectively, including $1.015 billion and $959 million, respectively, of charity care write-offs and uninsured discounts that were offered through Tenet’s Compact with Uninsured Patients. Uncompensated care in the first quarter of 2018 represented 22.5 percent of revenue before implicit price concessions, bad debts, uninsured discounts and charity care write-offs, up from 21.8 percent in the first quarter of 2017. Nearly all of Tenet’s uncompensated care is associated with the Hospital Operations and other segment.

Uninsured plus charity admissions increased by 536 admissions, or 5.9 percent on a same-hospital basis in the first quarter of 2018 compared to the first quarter of 2017. Uninsured plus charity outpatient visits increased by 1,806 visits, or 1.6 percent, on a same-hospital basis.

Management’s Webcast Discussion of First Quarter Results

Tenet management will discuss the Company’s first quarter 2018 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on May 1, 2018. Investors can access the webcast through the Company’s website at www.tenethealth.com/investors. A set of slides, which

Page 6



will be referred to on the conference call, is available on the Quarterly Results section of the Company’s website.

Additional information regarding Tenet’s quarterly results of operations is contained in its Form 10‑Q report for the three months ended March 31, 2018, which will be filed with the Securities and Exchange Commission and posted on the Company’s website before the webcast.

This press release includes certain non-GAAP measures, such as Adjusted EBITDA, Adjusted net income (loss) from continuing operations attributable to Tenet shareholders, Adjusted diluted earnings (loss) per share from continuing operations attributable to Tenet shareholders, Free Cash Flow and Adjusted Free Cash Flow. Reconciliations of these measures to the most comparable GAAP measure are contained in the tables at the end of this release.

Tenet Healthcare Corporation is a diversified healthcare services company with approximately 115,000 employees united around a common mission: to help people live happier, healthier lives. Through its subsidiaries, partnerships and joint ventures, including United Surgical Partners International, the Company operates general acute care and specialty hospitals, ambulatory surgery centers, urgent care centers and other outpatient facilities in the United States and the United Kingdom. Tenet’s Conifer Health Solutions subsidiary provides technology-enabled performance improvement and health management solutions to hospitals, health systems, integrated delivery networks, physician groups, self-insured organizations and health plans. For more information, please visit www.tenethealth.com.

The terms "THC", "Tenet Healthcare Corporation", "the Company", "we", "us" or "our" refer to Tenet Healthcare Corporation or one or more of its subsidiaries or affiliates as applicable.

# # #
Investor Contact
Brendan Strong
469-893-6992
investorrelations@tenethealth.com
Media Contact
Lesley Bogdanow
469-893-2640
mediarelations@tenethealth.com

This release contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “assume,” “anticipate,” “estimate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, but are not limited to, the factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2017, and subsequent Form 10-Q filings and other filings with the Securities and Exchange Commission.

Tenet uses its Company website to provide important information to investors about the Company including the posting of important announcements regarding financial performance and corporate developments.


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TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions except per share amounts)
 
Three Months Ended March 31,
 
 
2018
 
%
 
2017
 
%
 
Change
Net operating revenues:
 
 
 
 
 
 
 
 
 
 
Net operating revenues before provision for doubtful accounts
 


 
 
 
$
5,196

 
 
 


Less: Provision for doubtful accounts
 


 
 
 
383

 
 
 


Net operating revenues
 
$
4,699

 
100.0
 %
 
4,813

 
100.0
 %
 
(2.4
)%
Equity in earnings of unconsolidated affiliates
 
25

 
0.5
 %
 
29

 
0.6
 %
 
(13.8
)%
Operating expenses:
 
 
 
 
 
 
 
 
 
 
Salaries, wages and benefits
 
2,227

 
47.3
 %
 
2,380

 
49.4
 %
 
(6.4
)%
Supplies
 
774

 
16.5
 %
 
765

 
15.9
 %
 
1.2
 %
Other operating expenses, net
 
1,060

 
22.6
 %
 
1,187

 
24.7
 %
 
(10.7
)%
Electronic health record incentives
 
(1
)
 
 %
 
(1
)
 
 %
 
 %
Depreciation and amortization
 
204

 
4.3
 %
 
221

 
4.6
 %
 
 
Impairment and restructuring charges, and acquisition-related costs
 
47

 
1.0
 %
 
33

 
0.7
 %
 
 
Litigation and investigation costs
 
6

 
0.1
 %
 
5

 
0.1
 %
 
 
Gains on sales, consolidation and deconsolidation of facilities
 
(110
)
 
(2.3
)%
 
(15
)
 
(0.3
)%
 
 
Operating income
 
517

 
11.0
 %
 
267

 
5.5
 %
 
 
Interest expense
 
(255
)
 
 
 
(258
)
 
 
 
 
Other non-operating expense, net
 
(1
)
 
 
 
(5
)
 
 
 
 
Loss from early extinguishment of debt
 
(1
)
 
 
 

 
 
 
 
Income from continuing operations, before income taxes
 
260

 
 
 
4

 
 
 
 
Income tax benefit (expense)
 
(70
)
 
 
 
33

 
 
 
 
Income from continuing operations, before discontinued operations
 
190

 
 
 
37

 
 
 
 
Discontinued operations:
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
1

 
 
 
(2
)
 
 
 
 
Income tax benefit (expense)
 

 
 
 
1

 
 
 
 
Income (loss) from discontinued operations
 
1

 
 
 
(1
)
 
 
 
 
Net income
 
191

 
 
 
36

 
 
 
 
Less: Net income attributable to noncontrolling interests
 
92

 
 
 
89

 
 
 
 
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
 
$
99

 
 
 
$
(53
)
 
 
 
 
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax
 
$
98

 
 
 
$
(52
)
 
 
 
 
Income (loss) from discontinued operations, net of tax
 
1

 
 
 
(1
)
 
 
 
 
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
 
$
99

 
 
 
$
(53
)
 
 
 
 
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
0.97

 
 
 
$
(0.52
)
 
 
 
 
Discontinued operations
 
0.01

 
 
 
(0.01
)
 
 
 
 
 
 
$
0.98

 
 
 
$
(0.53
)
 
 
 
 
Diluted
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
0.95

 
 
 
$
(0.52
)
 
 
 
 
Discontinued operations
 
0.01

 
 
 
(0.01
)
 
 
 
 
 
 
$
0.96

 
 
 
$
(0.53
)
 
 
 
 
Weighted average shares and dilutive securities outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
Basic
 
101,392

 
 
 
100,000

 
 
 
 
Diluted*
 
102,656

 
 
 
100,000

 
 
 
 


*Had we generated income from continuing operations in the three months ended March 31, 2017 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 848 thousand shares.




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TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

 
 
 
 
 
 
 
March 31,
 
December 31,
(Dollars in millions)
 
2018
 
2017
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
974

 
$
611

Accounts receivable, less allowance for doubtful accounts
 
2,519

 
2,616

Inventories of supplies, at cost
 
294

 
289

Income tax receivable
 
20

 
5

Assets held for sale
 
599

 
1017

Other current assets
 
1,228

 
1,035

Total current assets 
 
5,634

 
5,573

Investments and other assets
 
1,433

 
1,543

Deferred income taxes
 
383

 
455

Property and equipment, at cost, less accumulated depreciation and amortization
 
6,906

 
7,030

Goodwill
 
7,036

 
7,018

Other intangible assets, at cost, less accumulated amortization
 
1,792

 
1,766

Total assets 
 
$
23,184

 
$
23,385

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Current portion of long-term debt
 
$
666

 
$
146

Accounts payable
 
1,059

 
1,175

Accrued compensation and benefits
 
708

 
848

Professional and general liability reserves
 
222

 
200

Accrued interest payable
 
332

 
256

Liabilities held for sale
 
406

 
480

Other current liabilities
 
1,168

 
1,227

Total current liabilities 
 
4,561

 
4,332

Long-term debt, net of current portion
 
14,223

 
14,791

Professional and general liability reserves
 
651

 
654

Defined benefit plan obligations
 
528

 
536

Deferred income taxes
 
36

 
36

Other long-term liabilities
 
627

 
631

Total liabilities 
 
20,626

 
20,980

Commitments and contingencies
 
 
 
 
Redeemable noncontrolling interests in equity of consolidated subsidiaries
 
1,942

 
1,866

Equity:
 
 
 
 
Shareholders’ equity:
 
 
 
 
Common stock
 
7

 
7

Additional paid-in capital
 
4,833

 
4,859

Accumulated other comprehensive loss
 
(239)

 
(204)

Accumulated deficit
 
(2,248)

 
(2,390)

Common stock in treasury, at cost
 
(2,418)

 
(2,419)

Total shareholders’ equity (deficit)
 
(65)

 
(147)

Noncontrolling interests 
 
681

 
686

Total equity
 
616

 
539

Total liabilities and equity 
 
$
23,184

 
$
23,385








Page 9



TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended
(Dollars in millions)
 
March 31,
 
 
2018
 
2017
Net income
 
$
191

 
$
36

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
204

 
221

Provision for doubtful accounts
 

 
383

Deferred income tax expense (benefit)
 
70

 

Stock-based compensation expense
 
9

 
13

Impairment and restructuring charges, and acquisition-related costs
 
47

 
33

Litigation and investigation costs
 
6

 
5

Gains on sales, consolidation and deconsolidation of facilities
 
(110
)
 
(15
)
Loss from early extinguishment of debt
 
1

 

Equity in earnings of unconsolidated affiliates, net of distributions received
 
9

 
4

Amortization of debt discount and debt issuance costs
 
11

 
11

Pre-tax loss (income) from discontinued operations
 
(1
)
 
2

Other items, net
 
(1
)
 
(2
)
Changes in cash from operating assets and liabilities:
 
 
 
 
Accounts receivable
 
(66
)
 
(446
)
Inventories and other current assets
 
(41
)
 
132

Income taxes
 

 
(34
)
Accounts payable, accrued expenses and other current liabilities
 
(183
)
 
(161
)
Other long-term liabilities
 
1

 
26

Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements
 
(33
)
 
(24
)
Net cash provided by (used in) operating activities from discontinued operations, excluding income taxes
 
(1
)
 
2

Net cash provided by operating activities
 
113

 
186

Cash flows from investing activities:
 
 

 
 
Purchases of property and equipment — continuing operations
 
(143
)
 
(198
)
Purchases of businesses or joint venture interests, net of cash acquired
 
(16
)
 
(6
)
Proceeds from sales of facilities and other assets
 
425

 
20

Proceeds from sales of marketable securities, long-term investments and other assets
 
134

 
9

Purchases of equity investments
 
(30
)
 
(1
)
Other long-term assets
 
7

 
(12
)
Other items, net
 
(4
)
 
(1
)
Net cash provided by (used in) investing activities
 
373

 
(189
)
Cash flows from financing activities:
 
 

 
 
Repayments of borrowings under credit facility
 

 

Proceeds from borrowings under credit facility
 

 

Repayments of other borrowings
 
(91
)
 
(89
)
Proceeds from other borrowings
 
7

 
6

Debt issuance costs
 

 
(2
)
Distributions paid to noncontrolling interests
 
(64
)
 
(63
)
Proceeds from sale of noncontrolling interests
 
5

 
10

Purchases of noncontrolling interests
 
(9
)
 

Proceeds from exercise of stock options and employee stock purchase plan
 
9

 
2

Other items, net
 
20

 
(5
)
Net cash used in financing activities
 
(123
)
 
(141
)
Net increase (decrease) in cash and cash equivalents
 
363

 
(144
)
Cash and cash equivalents at beginning of period
 
611

 
716

Cash and cash equivalents at end of period
 
$
974

 
$
572

Supplemental disclosures:
 
 

 
 
Interest paid, net of capitalized interest
 
$
(169
)
 
$
(130
)
Income tax refunds (payments), net
 
$
1

 
$
(1
)

Page 10




TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) 
(Unaudited)
 
 
 
 
 
 
 
 
(Dollars in millions except per adjusted patient day
 
Three Months Ended March 31,
 
and per adjusted patient admission amounts)
 
2018
 
2017
 
Change
 
 
 
 
 
 
 
 
 
Admissions, Patient Days and Surgeries
 
 
 
 
 
 
 
Number of hospitals (at end of period)
 
69

 
76

 
(7
)
*
Total admissions
 
182,306

 
196,907

 
(7.4
)%
 
Adjusted patient admissions
 
320,868

 
347,150

 
(7.6
)%
 
Paying admissions (excludes charity and uninsured)
 
172,490

 
186,648

 
(7.6
)%
 
Charity and uninsured admissions
 
9,816

 
10,259

 
(4.3
)%
 
Admissions through emergency department
 
125,076

 
126,473

 
(1.1
)%
 
Paying admissions as a percentage of total admissions
 
94.6
%
 
94.8
%
 
(0.2
)%
*
Charity and uninsured admissions as a percentage of total admissions
 
5.4
%
 
5.2
%
 
0.2
 %
*
Emergency department admissions as a percentage of total admissions
 
68.6
%
 
64.2
%
 
4.4
 %
*
Surgeries — inpatient
 
47,223

 
51,800

 
(8.8
)%
 
Surgeries — outpatient
 
63,008

 
69,604

 
(9.5
)%
 
Total surgeries
 
110,231

 
121,404

 
(9.2
)%
 
Patient days — total
 
858,648

 
923,339

 
(7.0
)%
 
Adjusted patient days
 
1,486,139

 
1,603,698

 
(7.3
)%
 
Average length of stay (days)
 
4.71

 
4.69

 
0.4
 %
 
Licensed beds (at end of period)
 
18,457

 
20,439

 
(9.7
)%
 
Average licensed beds
 
18,685

 
20,440

 
(8.6
)%
 
Utilization of licensed beds
 
51.1
%
 
50.2
%
 
0.9
 %
*
Outpatient Visits
 

 
 
 
 
 
Total visits
 
1,842,539

 
2,039,942

 
(9.7
)%
 
Paying visits (excludes charity and uninsured)
 
1,725,976

 
1,908,212

 
(9.6
)%
 
Charity and uninsured visits
 
116,563

 
131,730

 
(11.5
)%
 
Emergency department visits
 
697,001

 
733,051

 
(4.9
)%
 
Paying visits as a percentage of total visits
 
93.7
%
 
93.5
%
 
0.2
 %
*
Charity and uninsured visits as a percentage of total visits
 
6.3
%
 
6.5
%
 
(0.2
)%
*
Total emergency department admissions and visits
 
822,077

 
859,524

 
(4.4
)%
 
Revenues
 

 
 
 
 
 
Net patient revenues(3)
 
$
3,643

 
$
3,728

 
(2.3
)%
 
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
 

 
 
 
 
 
  Net patient revenue(3) per adjusted patient admission
 
$
11,354

 
$
10,739

 
5.7
 %
 
Net patient revenue(3) per adjusted patient day
 
$
2,451

 
$
2,325

 
5.4
 %
 
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)
 
$
10,561

 
$
10,288

 
2.7
 %
 
Net Patient Revenues(3) from:
 
 
 
 
 
 
 
Medicare
 
21.5
%
 
23.1
%
 
(1.6
)%
*
Medicaid
 
8.8
%
 
7.4
%
 
1.4
 %
*
Managed care
 
65.0
%
 
65.2
%
 
(0.2
)%
*
Self-pay
 
1.0
%
 
0.3
%
 
0.7
 %
*
Indemnity and other
 
3.7
%
 
4.0
%
 
(0.3
)%
*



(1) Represents the consolidated results of Tenet’s acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.
(2) Excludes operating expenses from Tenet's health plans.
(3) Less implicit price concessions and provision for doubtful accounts.
* This change is the difference between the 2018 and 2017 amounts shown.



Page 11



TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) 
(Unaudited)
 
 
 
 
 
 
 
 
(Dollars in millions except per adjusted patient day
 
Three Months Ended March 31,
 
and per adjusted patient admission amounts)
 
2018
 
2017
 
Change
 
 
 
 
 
 
 
 
 
Admissions, Patient Days and Surgeries
 
 
 
 
 
 
 
Number of hospitals (at end of period)
 
69

 
69

 

*
Total admissions
 
179,208

 
178,725

 
0.3
 %
 
Adjusted patient admissions
 
314,022

 
312,003

 
0.6
 %
 
Paying admissions (excludes charity and uninsured)
 
169,548

 
169,601

 
 %
 
Charity and uninsured admissions
 
9,660

 
9,124

 
5.9
 %
 
Admissions through emergency department
 
123,224

 
115,133

 
7.0
 %
 
Paying admissions as a percentage of total admissions
 
94.6
%
 
94.9
%
 
(0.3
)%
*
Charity and uninsured admissions as a percentage of total admissions
 
5.4
%
 
5.1
%
 
0.3
 %
*
Emergency department admissions as a percentage of total admissions
 
68.8
%
 
64.4
%
 
4.4
 %
*
Surgeries — inpatient
 
46,575

 
47,539

 
(2.0
)%
 
Surgeries — outpatient
 
61,754

 
62,895

 
(1.8
)%
 
Total surgeries
 
108,329

 
110,434

 
(1.9
)%
 
Patient days — total
 
843,793

 
837,488

 
0.8
 %
 
Adjusted patient days
 
1,453,447

 
1,440,173

 
0.9
 %
 
Average length of stay (days)
 
4.71

 
4.69

 
0.4
 %
 
Licensed beds (at end of period)
 
18,089

 
18,107

 
(0.1
)%
 
Average licensed beds
 
18,089

 
18,107

 
(0.1
)%
 
Utilization of licensed beds
 
51.8
%
 
51.4
%
 
0.4
 %
*
Outpatient Visits
 
 
 
 
 
 
 
Total visits
 
1,798,885

 
1,817,295

 
(1.0
)%
 
Paying visits (excludes charity and uninsured)
 
1,684,875

 
1,705,091

 
(1.2
)%
 
Charity and uninsured visits
 
114,010

 
112,204

 
1.6
 %
 
Emergency department visits
 
684,057

 
652,284

 
4.9
 %
 
Paying visits as a percentage of total visits
 
93.7
%
 
93.8
%
 
(0.1
)%
*
Charity and uninsured visits as a percentage of total visits
 
6.3
%
 
6.2
%
 
0.1
 %
*
Total emergency department admissions and visits
 
807,281

 
767,417

 
5.2
 %
 
Revenues
 
 
 
 
 
 
 
Net patient revenues(2)
 
$
3,594

 
$
3,368

 
6.7
 %
 
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
 
 
 
 
 
 
 
  Net patient revenue(2) per adjusted patient admission
 
$
11,445

 
$
10,796

 
6.0
 %
 
Net patient revenue(2) per adjusted patient day
 
$
2,473

 
$
2,339

 
5.7
 %
 
Net Patient Revenues(2) from:
 
 
 
 
 
 
 
Medicare
 
21.3
%
 
23.5
%
 
(2.2
)%
*
Medicaid
 
8.8
%
 
7.0
%
 
1.8
 %
*
Managed care
 
64.9
%
 
65.0
%
 
(0.1
)%
*
Self-pay
 
1.3
%
 
0.3
%
 
1.0
 %
*
Indemnity and other
 
3.7
%
 
4.2
%
 
(0.5
)%
*

(1) Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 69 hospitals operated throughout the three months ended March 31, 2018 and 2017, and associated outpatient facilities but excludes the results of hospitals Tenet divested, since January 1, 2017.
(2) Less implicit price concessions and provision for doubtful accounts.
* This change is the difference between the 2018 and 2017 amounts shown.


Page 12



TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions except per share amounts)
 
Three Months Ended
 
 
 
Year Ended
 
Three Months Ended
 
 
3/31/2017
 
6/30/2017
 
9/30/2017
 
12/31/2017
 
12/31/2017
 
3/31/2018
Net operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Net operating revenues before provision for doubtful accounts
 
$
5,196

 
$
5,173

 
$
4,941

 
$
5,303

 
$
20,613

 

Less: Provision for doubtful accounts
 
383

 
371

 
355

 
325

 
1,434

 

Net operating revenues
 
4,813

 
4,802

 
4,586

 
4,978

 
19,179

 
$
4,699

Equity in earnings of unconsolidated affiliates
 
29

 
28

 
38

 
49

 
144

 
25

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Salaries, wages and benefits
 
2,380

 
2,346

 
2,264

 
2,284

 
9,274

 
2,227

Supplies
 
765

 
780

 
740

 
800

 
3,085

 
774

Other operating expenses, net
 
1,187

 
1,159

 
1,120

 
1,104

 
4,570

 
1,060

Electronic health record incentives
 
(1
)
 
(6
)
 
(1
)
 
(1
)
 
(9
)
 
(1
)
Depreciation and amortization
 
221

 
222

 
219

 
208

 
870

 
204

Impairment and restructuring charges, and acquisition-related costs
 
33

 
41

 
329

 
138

 
541

 
47

Litigation and investigation costs
 
5

 
1

 
6

 
11

 
23

 
6

Gains on sales, consolidation and deconsolidation of facilities
 
(15
)
 
(23
)
 
(104
)
 
(2
)
 
(144
)
 
(110
)
Operating income
 
267

 
310

 
51

 
485

 
1,113

 
517

Interest expense
 
(258
)
 
(260
)
 
(257
)
 
(253
)
 
(1,028
)
 
(255
)
Other non-operating expense, net
 
(5
)
 
(5
)
 
(4
)
 
(8
)
 
(22
)
 
(1
)
Loss from early extinguishment of debt
 

 
(26
)
 
(138
)
 

 
(164
)
 
(1
)
Income (loss) from continuing operations, before income
  taxes
 
4

 
19

 
(348
)
 
224

 
(101
)
 
260

Income tax benefit (expense)
 
33

 
12

 
60

 
(324
)
 
(219
)
 
(70
)
Income (loss) from continuing operations, before
  discontinued operations
 
37

 
31

 
(288
)
 
(100
)
 
(320
)
 
190

Discontinued operations:
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
(2
)
 
2

 
(1
)
 
1

 

 
1

Income tax benefit (expense)
 
1

 
(1
)
 

 

 

 

Income (loss) from discontinued operations
 
(1
)
 
1

 
(1
)
 
1

 

 
1

Net income (loss)
 
36

 
32

 
(289
)
 
(99
)
 
(320
)
 
191

Less: Net income attributable to noncontrolling interests
 
89

 
87

 
78

 
130

 
384

 
92

Net income available (loss attributable) to Tenet Healthcare
   Corporation common shareholders
 
$
(53
)
 
$
(55
)
 
$
(367
)
 
$
(229
)
 
$
(704
)
 
$
99

Amounts available (attributable) to Tenet Healthcare
   Corporation common shareholders
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax
 
$
(52
)
 
$
(56
)
 
$
(366
)
 
$
(230
)
 
$
(704
)
 
$
98

Income (loss) from discontinued operations, net of tax
 
(1
)
 
1

 
(1
)
 
1

 

 
1

Net income available (loss attributable) to Tenet Healthcare
  Corporation common shareholders
 
$
(53
)
 
$
(55
)
 
$
(367
)
 
$
(229
)
 
$
(704
)
 
$
99

Earnings (loss) per share available (attributable) to Tenet
   Healthcare Corporation common shareholders:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.52
)
 
$
(0.56
)
 
$
(3.63
)
 
$
(2.28
)
 
$
(7.00
)
 
$
0.97

Discontinued operations
 
(0.01
)
 
0.01

 
(0.01
)
 
0.01

 

 
0.01

 
 
$
(0.53
)
 
$
(0.55
)
 
$
(3.64
)
 
$
(2.27
)
 
$
(7.00
)
 
$
0.98

Diluted
 
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.52
)
 
$
(0.56
)
 
$
(3.63
)
 
$
(2.28
)
 
$
(7.00
)
 
$
0.95

Discontinued operations
 
(0.01
)
 
0.01

 
(0.01
)
 
0.01

 

 
0.01

 
 
$
(0.53
)
 
$
(0.55
)
 
$
(3.64
)
 
$
(2.27
)
 
$
(7.00
)
 
$
0.96

Weighted average shares and dilutive securities
   outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
100,000

 
100,612

 
100,812

 
100,945

 
100,592

 
101,392

Diluted
 
100,000

 
100,612

 
100,812

 
100,945

 
100,592

 
102,656


Page 13



TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) 
(Unaudited)
(Dollars in millions except per adjusted patient day
and per adjusted patient admission amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
Three Months Ended
 
3/31/2017
 
6/30/2017
 
9/30/2017
 
12/31/2017
 
12/31/2017
 
03/31/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Admissions, Patient Days and Surgeries
 
 
 
 
 
 
 
 
 
 
 
 
Number of hospitals (at end of period)
 
76

 
76

 
73

 
72

 
72

 
69

Total admissions
 
196,907

 
190,394

 
185,389

 
186,185

 
758,875

 
182,306

Adjusted patient admissions
 
347,150

 
342,439

 
332,035

 
332,642

 
1,354,266

 
320,868

Paying admissions (excludes charity and uninsured)
 
186,648

 
179,889

 
174,803

 
176,158

 
717,498

 
172,490

Charity and uninsured admissions
 
10,259

 
10,505

 
10,586

 
10,027

 
41,377

 
9,816

Admissions through emergency department
 
126,473

 
121,807

 
120,493

 
123,887

 
492,660

 
125,076

Paying admissions as a percentage of total admissions
 
94.8
%
 
94.5
%
 
94.3
%
 
94.6
%
 
94.5
%
 
94.6
%
Charity and uninsured admissions as a percentage of total admissions
 
5.2
%
 
5.5
%
 
5.7
%
 
5.4
%
 
5.5
%
 
5.4
%
Emergency department admissions as a percentage of total admissions
 
64.2
%
 
64.0
%
 
65.0
%
 
66.5
%
 
64.9
%
 
68.6
%
Surgeries — inpatient
 
51,800

 
52,083

 
50,939

 
50,292

 
205,114

 
47,223

Surgeries — outpatient
 
69,604

 
71,366

 
67,321

 
68,604

 
276,895

 
63,008

Total surgeries
 
121,404

 
123,449

 
118,260

 
118,896

 
482,009

 
110,231

Patient days — total
 
923,339

 
874,930

 
853,059

 
857,728

 
3,509,056

 
858,648

Adjusted patient days
 
1,603,698

 
1,552,302

 
1,502,831

 
1,505,130

 
6,163,961

 
1,486,139

Average length of stay (days)
 
4.69

 
4.60

 
4.60

 
4.61

 
4.62

 
4.71

Licensed beds (at end of period)
 
20,439

 
20,435

 
19,433

 
19,141

 
19,141

 
18,457

Average licensed beds
 
20,440

 
20,435

 
19,783

 
19,320

 
19,995

 
18,685

Utilization of licensed beds
 
50.2
%
 
47.0
%
 
46.9
%
 
48.3
%
 
48.1
%
 
51.1
%
Outpatient Visits
 
 
 
 
 
 
 
 
 
 
 
 
Total visits
 
2,039,942

 
1,981,848

 
1,867,471

 
1,901,864

 
7,791,125

 
1,842,539

Paying visits (excludes charity and uninsured)
 
1,908,212

 
1,849,697

 
1,741,815

 
1,777,790

 
7,277,514

 
1,725,976

Charity and uninsured visits
 
131,730

 
132,151

 
125,656

 
124,074

 
513,611

 
116,563

Emergency department visits
 
733,051

 
724,785

 
685,096

 
711,268

 
2,854,200

 
697,001

Paying visits as a percentage of total visits
 
93.5
%
 
93.3
%
 
93.3
%
 
93.5
%
 
93.4
%
 
93.7
%
Charity and uninsured visits as a percentage of total visits
 
6.5
%
 
6.7
%
 
6.7
%
 
6.5
%
 
6.6
%
 
6.3
%
Total emergency department admissions and visits
 
859,524

 
846,592

 
805,589

 
835,155

 
3,346,860

 
822,077

Revenues
 
 
 
 
 
 
 
 
 
 
 
 
Net patient revenues(3)
 
$
3,728

 
$
3,719

 
$
3,522

 
$
3,860

 
$
14,829

 
$
3,643

Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
 
 
 
 
 
 
 
 
 
 
 
 
  Net patient revenue(3) per adjusted patient admission
 
$
10,739

 
$
10,860

 
$
10,607

 
$
11,604

 
$
10,950

 
$
11,354

Net patient revenue(3) per adjusted patient day
 
$
2,325

 
$
2,396

 
$
2,344

 
$
2,565

 
$
2,406

 
$
2,451

Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)
 
$
10,288

 
$
10,394

 
$
10,367

 
$
10,492

 
$
10,384

 
$
10,561

Net Patient Revenues(3) from:
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
 
23.1
%
 
22.0
%
 
22.0
%
 
20.4
%
 
21.9
%
 
21.5
%
Medicaid
 
7.4
%
 
7.5
%
 
7.1
%
 
12.9
%
 
8.8
%
 
8.8
%
Managed care
 
65.2
%
 
65.9
%
 
66.1
%
 
61.5
%
 
64.6
%
 
65.0
%
Self-pay
 
0.3
%
 
0.5
%
 
0.3
%
 
1.3
%
 
0.6
%
 
1.0
%
Indemnity and other
 
4.0
%
 
4.1
%
 
4.5
%
 
3.9
%
 
4.1
%
 
3.7
%

(1)
Represents the consolidated results of Tenet’s acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.
(2)
Excludes operating expenses from Tenet's health plans.
(3) Less implicit price concessions and provision for doubtful accounts.


Page 14



TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) 
(Unaudited)
(Dollars in millions except per adjusted patient day
and per adjusted patient admission amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
Three Months Ended
 
3/31/2017
 
6/30/2017
 
9/30/2017
 
12/31/2017
 
12/31/2017
 
3/31/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Admissions, Patient Days and Surgeries
 
 
 
 
 
 
 
 
 
 
 
 
Number of hospitals (at end of period)
 
69

 
69

 
69

 
69

 
69

 
69

Total admissions
 
178,725

 
173,096

 
172,854

 
176,220

 
700,895

 
179,208

Adjusted patient admissions
 
312,003

 
308,046

 
307,115

 
312,281

 
1,239,445

 
314,022

Paying admissions (excludes charity and uninsured)
 
169,601

 
163,657

 
162,815

 
166,453

 
662,526

 
169,548

Charity and uninsured admissions
 
9,124

 
9,439

 
10,039

 
9,767

 
38,369

 
9,660

Admissions through emergency department
 
115,133

 
110,834

 
112,554

 
117,155

 
455,676

 
123,224

Paying admissions as a percentage of total admissions
 
94.9
%
 
94.5
%
 
94.2
%
 
94.5
%
 
94.5
%
 
94.6
%
Charity and uninsured admissions as a percentage of total admissions
 
5.1
%
 
5.5
%
 
5.8
%
 
5.5
%
 
5.5
%
 
5.4
%
Emergency department admissions as a percentage of total admissions
 
64.4
%
 
64.0
%
 
65.1
%
 
66.5
%
 
65.0
%
 
68.8
%
Surgeries — inpatient
 
47,539

 
47,933

 
47,995