Exhibit 99.1



tenet_logoa03.jpg
 
Tenet Reports Results for the Second Quarter Ended June 30, 2018
Tenet reported net income from continuing operations available to Tenet common shareholders of $24 million or $0.23 per diluted share in the second quarter of 2018 compared to a net loss of $56 million or $0.56 per diluted share in the second quarter of 2017. After adjusting for certain items, which totaled $27 million or $0.26 per share in the second quarter of 2018, Tenet reported Adjusted diluted earnings per share from continuing operations of $0.49 in the second quarter of 2018 compared to an Adjusted diluted loss per share of $0.17 in the second quarter of 2017.
Adjusted EBITDA was $634 million in the second quarter of 2018 compared to $570 million in the second quarter of 2017. Adjusted EBITDA in the second quarter of 2018 consisted of $345 million in the Hospital segment, $198 million in the Ambulatory segment and $91 million in the Conifer segment.
Net cash provided by operating activities was $461 million in the first half of 2018, an increase of $60 million when compared to $401 million in the first half of 2017. Free Cash Flow was $193 million, an increase of $140 million when compared to $53 million in the first half of 2017. Adjusted Free Cash Flow was $259 million, a $142 million increase when compared to $117 million in the first half of 2017.
Hospital segment same-hospital net patient revenue grew 3.2 percent. Admissions decreased 2.3 percent, adjusted admissions decreased 0.2 percent, and revenue per adjusted admission increased 3.5 percent.
Ambulatory Care segment same-facility system-wide revenue grew 6.9 percent, with cases up 4.3 percent and revenue per case up 2.4 percent. Surgical revenue grew 6.6 percent, with cases up 3.4 percent and revenue per surgical case up 3.1 percent.
Conifer segment revenues decreased 3.5 percent primarily due to divestitures by Tenet and other customers.
2018 Outlook includes an increase in net income from continuing operations available to Tenet common shareholders to $115 million to $186 million, Adjusted EBITDA is unchanged at $2.550 billion to $2.650 billion, an increase in diluted earnings per share from continuing operations to $1.11 to $1.79 and an increase in Adjusted diluted earnings per share from continuing operations to $1.54 to $1.88.

DALLAS – August 6, 2018 – Tenet Healthcare Corporation (NYSE: THC) reported net income from continuing operations available to Tenet common shareholders of $24 million in the second





quarter of 2018 compared to a $56 million net loss from continuing operations in the second quarter of 2017. Adjusted EBITDA was $634 million in the second quarter of 2018 compared to $570 million in the second quarter of 2017.

“We are becoming a more agile and decisive organization and are pleased with our strong financial results for the third quarter in a row,” said Ronald A. Rittenmeyer, Executive Chairman and CEO.  “We have demonstrated our ability to appropriately minimize costs, which will be an ongoing fundamental part of how we do business.  Our top priorities remain strengthening our portfolio, delivering more consistent organic growth and taking additional steps to enhance our margins and free cash flow.”

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $3.733 billion, down 8.6 percent from the second quarter of 2017, primarily due to hospital divestitures and the wind-down of our health plan business.

On a same-hospital basis, net patient revenues after implicit price concessions were $3.432 billion, up 3.2 percent from the second quarter of 2017. Adjusted admissions were down 0.2 percent in the second quarter of 2018 and would have been up approximately 1.1 percent on a same-hospital basis excluding service line closures and declines in Detroit and Chicago. The Company’s decision to discontinue certain services at selected hospitals lowered same-hospital adjusted admissions by approximately 40 basis points in the second quarter of 2018. In addition, volume declines in Chicago (which the Company is divesting) and Detroit lowered same-hospital adjusted admissions by approximately 90 basis points. Revenue per adjusted admission increased 3.5 percent on a same-hospital basis. Same-hospital revenue included $63 million from the California Provider Fee Program in the second quarter of 2018 compared to no revenue in the second quarter of 2017 since the 2017 program was not approved until December 2017; excluding timing differences related to the California Provider Fee, same-hospital revenue per adjusted admission increased 1.6 percent.

Adjusted EBITDA in Tenet’s hospital segment was $345 million, a decrease of $1 million or 0.3 percent as compared to $346 million in the second quarter of 2017. Key items impacting the year-over-year comparison in Adjusted EBITDA include: (i) a $63 million increase in California Provider Fee revenue, (ii) a $41 million decline in EBITDA due to divestitures; (iii) a $23 million gain in the second quarter of 2017, primarily from the sale of the Company’s home health and hospice assets, which was recorded as a reduction to the Company’s other operating expenses, and (iv) a $6 million decline in electronic health record incentives. After normalizing for these items, Adjusted EBITDA in the hospital segment increased by $6 million, or approximately 2 percent.

Tenet’s health plan business recognized no revenue and $1 million of Adjusted EBITDA in the second quarter of 2018 versus $25 million of revenue and negative $19 million of Adjusted EBITDA

Page 2



in the second 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 hospital segment, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 2.2 percent on a per adjusted admission basis in the second quarter of 2018 or just 1.5 percent after normalizing for the aforementioned $23 million gain in the 2017 period.

Exchanges

Tenet’s same-hospital exchange outpatient visits increased 0.6 percent to 51,845 in the second quarter of 2018. Same-hospital exchange admissions were 4,725 in the second quarter of 2018, down 5.6 percent from the second quarter of 2017.

Ambulatory Care Segment

During the second quarter of 2018, the Ambulatory segment produced net operating revenues of $531 million, representing an increase of 12.5 percent as compared to $472 million in the second quarter of 2017. In addition, the Ambulatory segment generated Adjusted EBITDA of $198 million, up 20.7 percent from $164 million in the second quarter of 2017 and Adjusted EBITDA less facility-level noncontrolling interest was $128 million, up 20.8 percent from $106 million in the second 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 6.9 percent, with cases increasing 4.3 percent and revenue per case increasing 2.4 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 6.6 percent, with cases up 3.4 percent and revenue per case up 3.1 percent, reflecting growth in higher-acuity surgical procedures. In the non-surgical business, same-facility system-wide revenue grew 13.6 percent, with visits up 5.8 percent and revenue per visit up 7.4 percent.

Conifer Segment

During the second quarter of 2018, as a result of divestiture activity at Tenet and other customers, Conifer’s revenue decreased 3.5 percent to $386 million, down from $400 million in the second quarter of 2017. Revenue from third party customers was down 1.2 percent to $242 million. Conifer’s revenue in the second quarter of 2018 included $7 million of contract termination fees

Page 3



from two health systems that acquired hospitals from Tenet and another Conifer customer and subsequently decided to insource revenue cycle management.

Conifer generated $91 million of Adjusted EBITDA in the second quarter of 2018, up 51.7 percent from $60 million in the second quarter of 2017. After normalizing for the aforementioned $7 million of contract termination fee revenue and $3 million of incentive revenue from customers in the second quarter of 2018, Adjusted EBITDA grew by 35 percent, primarily driven by improvements in Conifer’s cost structure.

Net Income and Earnings Per Share

Tenet reported net income from continuing operations available to Tenet common shareholders of $24 million, or $0.23 per diluted share, in the second quarter of 2018 compared to a net loss of $56 million, or $0.56 per diluted share, in the second quarter of 2017.

As shown on Table #2 at the end of this release, net income from continuing operations available to Tenet common shareholders of $24 million included: (i) $30 million of pre-tax impairment and restructuring charges, including $9 million of employee severance, $4 million of impairment charges to write-down assets held for sale in the United Kingdom to their estimated fair value, $4 million of contract and lease termination fees, and $13 million of other items; (ii) $13 million of pre-tax litigation and investigation costs; (iii) $8 million of pre-tax net gains on sales, consolidation and deconsolidation of facilities, primarily related to a $12 million pre-tax gain on the sale of Des Peres Hospital offset by $4 million of other items, and, (iv) other offsetting items. These items collectively lowered pre-tax income by $35 million, after-tax income by $27 million and diluted earnings per share by $0.26.

After adjusting for the items listed above and on Table #2, Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $51 million, or $0.49 per diluted share, during the second quarter of 2018, as compared to an Adjusted net loss from continuing operations attributable to Tenet common shareholders of $17 million, or $0.17 per diluted share, in the second quarter of 2017.

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

Cash Flow and Liquidity

Cash and cash equivalents were $403 million at June 30, 2018 compared to $974 million at March 31, 2017. The Company had no outstanding borrowings on its $1 billion credit line as of June 30,

Page 4



2018. Accounts receivable days outstanding from continuing operations were 55.1 at June 30, 2018 compared to 54.3 at March 31, 2018 and 55.8 at December 31, 2017.

Net cash provided by operating activities was $461 in the first half of 2018, representing a $60 million increase compared to $401 million in the first half of 2017. After subtracting $268 million and $348 million of capital expenditures in the first half of 2018 and 2017, respectively, Free Cash Flow was $193 million in the first half of 2018, an increase of $140 million compared to $53 million in the first half of 2017. Adjusted Free Cash Flow was $259 million in the first half of 2018, representing a $142 million increase from $117 million in the first half of 2017.

Net cash provided by investing activities was $225 million in the first half of 2018 compared to $308 million of net cash used in investing activities in the first half of 2017. The 2018 period included $624 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, Des Peres Hospital, and the Company’s minority interests in four Dallas-area hospitals. The 2018 period also included $126 million of purchases of businesses, joint ventures and equity investments, primarily related to USPI’s acquisition program.

Net cash used in financing activities was $894 million in the first half of 2018 compared to $334 million of net cash used in financing activities in the first half of 2017. The 2018 period included $642 million in purchases of noncontrolling interests, including approximately $630 million in the second quarter of 2018 to increase Tenet’s ownership in USPI to 95 percent, and $78 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.

Outlook

The Company’s Outlook for 2018 includes:

Revenue of $17.9 billion to $18.3 billion,
Net income from continuing operations available to Tenet common shareholders of $115 million to $186 million,
Adjusted EBITDA of $2.550 billion to $2.650 billion,
Net cash provided by operating activities of $1.220 billion to $1.525 billion,
Adjusted Free Cash Flow of $725 million to $925 million,
Diluted earnings per share from continuing operations of $1.11 to $1.79, and
Adjusted diluted earnings per share from continuing operations of $1.54 to $1.88.

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The Outlook for 2018 assumes equity in earnings of unconsolidated affiliates of $160 million to $170 million, net income available to noncontrolling interests of $390 million to $410 million and an average diluted share count of 104 million.

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

Revenue of $4.300 billion to $4.500 billion,
Net income available (loss attributable) from continuing operations to Tenet common shareholders ranging from a loss of $10 million to income of $5 million,
Adjusted EBITDA of $575 million to $625 million,
Diluted earnings per share from continuing operations ranging from a loss of $0.10 to earnings of $0.05, and
Adjusted diluted earnings per share from continuing operations ranging from $0.10 to $0.24.

The Outlook for the third quarter assumes equity in earnings of unconsolidated affiliates of $40 million to $45 million, net income available to noncontrolling interests of $90 million to $100 million, and an average diluted share count of 104 million.

Additional details on Tenet’s Outlook for both the third 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.

Management’s Webcast Discussion of Second Quarter Results

Tenet management will discuss the Company’s second quarter 2018 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on August 7, 2018. Investors can access the webcast through the Company’s website at www.tenethealth.com/investors. A set of slides, which will be referred to on the conference call, is available on the Quarterly Results section of the Company’s website.

Additional information regarding Tenet’s quarterly results of operations is contained in its Form 10-Q report for the period ended June 30, 2018, which will be filed with the Securities and Exchange Commission and posted on the Company’s website.

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

Page 6




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,” “project” “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.



Page 7





TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions except per share amounts)
 
Three Months Ended June 30,
 
 
2018
 
%
 
2017
 
%
 
Change
Net operating revenues:
 
 
 
 
 
 
 
 
 
 
Net operating revenues before provision for doubtful accounts
 


 
 
 
$
5,173

 
 
 


Less: Provision for doubtful accounts
 


 
 
 
371

 
 
 


Net operating revenues
 
$
4,506

 
100.0
 %
 
4,802

 
100.0
 %
 
(6.2
)%
Equity in earnings of unconsolidated affiliates
 
39

 
0.9
 %
 
28

 
0.6
 %
 
39.3
 %
Operating expenses:
 
 
 
 
 
 
 
 
 
 
Salaries, wages and benefits
 
2,135

 
47.4
 %
 
2,346

 
48.9
 %
 
(9.0
)%
Supplies
 
748

 
16.6
 %
 
780

 
16.2
 %
 
(4.1
)%
Other operating expenses, net
 
1,027

 
22.8
 %
 
1,159

 
24.1
 %
 
(11.4
)%
Electronic health record incentives
 

 
 %
 
(6
)
 
(0.1
)%
 
(100.0
)%
Depreciation and amortization
 
194

 
4.3
 %
 
222

 
4.6
 %
 
 
Impairment and restructuring charges, and acquisition-related costs
 
30

 
0.7
 %
 
41

 
0.9
 %
 
 
Litigation and investigation costs
 
13

 
0.3
 %
 
1

 
0.0
 %
 
 
Net gains on sales, consolidation and deconsolidation of facilities
 
(8
)
 
(0.2
)%
 
(23
)
 
(0.5
)%
 
 
Operating income
 
406

 
9.0
 %
 
310

 
6.5
 %
 
 
Interest expense
 
(254
)
 
 
 
(260
)
 
 
 
 
Other non-operating expense, net
 
(1
)
 
 
 
(5
)
 
 
 
 
Loss from early extinguishment of debt
 
(1
)
 
 
 
(26
)
 
 
 
 
Income from continuing operations, before income taxes
 
150

 
 
 
19

 
 
 
 
Income tax benefit (expense)
 
(44
)
 
 
 
12

 
 
 
 
Income from continuing operations, before discontinued operations
 
106

 
 
 
31

 
 
 
 
Discontinued operations:
 
 
 
 
 
 
 
 
 
 
Income from operations
 
2

 
 
 
2

 
 
 
 
Income tax benefit (expense)
 

 
 
 
(1
)
 
 
 
 
Income from discontinued operations
 
2

 
 
 
1

 
 
 
 
Net income
 
108

 
 
 
32

 
 
 
 
Less: Net income available to noncontrolling interests
 
82

 
 
 
87

 
 
 
 
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
 
$
26

 
 
 
$
(55
)
 
 
 
 
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax
 
$
24

 
 
 
$
(56
)
 
 
 
 
Income from discontinued operations, net of tax
 
2

 
 
 
1

 
 
 
 
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
 
$
26

 
 
 
$
(55
)
 
 
 
 
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
0.23

 
 
 
$
(0.56
)
 
 
 
 
Discontinued operations
 
0.02

 
 
 
0.01

 
 
 
 
 
 
$
0.25

 
 
 
$
(0.55
)
 
 
 
 
Diluted
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
0.23

 
 
 
$
(0.56
)
 
 
 
 
Discontinued operations
 
0.02

 
 
 
0.01

 
 
 
 
 
 
$
0.25

 
 
 
$
(0.55
)
 
 
 
 
Weighted average shares and dilutive securities outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
Basic
 
102,147

 
 
 
100,612

 
 
 
 
Diluted*
 
104,177

 
 
 
100,612

 
 
 
 


*Had we generated income from continuing operations in the three months ended June 30, 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 682 thousand shares.




Page 8



TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions except per share amounts)
 
Six Months Ended June 30,
 
 
2018
 
%
 
2017
 
%
 
Change
Net operating revenues:
 
 
 
 
 
 
 
 
 
 
Net operating revenues before provision for doubtful accounts
 
 
 
 
 
$
10,369

 
 
 


Less: Provision for doubtful accounts
 
 
 
 
 
754

 
 
 


Net operating revenues
 
$
9,205

 
100.0
 %
 
9,615

 
100.0
 %
 
(4.3
)%
Equity in earnings of unconsolidated affiliates
 
64

 
0.7
 %
 
57

 
0.6
 %
 
12.3
 %
Operating expenses:
 
 
 
 

 
 
 
 
 
 
Salaries, wages and benefits
 
4,362

 
47.5
 %
 
4,726

 
49.2
 %
 
(7.7
)%
Supplies
 
1,522

 
16.5
 %
 
1,545

 
16.1
 %
 
(1.5
)%
Other operating expenses, net
 
2,087

 
22.7
 %
 
2,346

 
24.4
 %
 
(11.0
)%
Electronic health record incentives
 
(1
)
 
 %
 
(7
)
 
(0.1
)%
 
(85.7
)%
Depreciation and amortization
 
398

 
4.3
 %
 
443

 
4.6
 %
 
 
Impairment and restructuring charges, and acquisition-related costs
 
77

 
0.8
 %
 
74

 
0.8
 %
 
 
Litigation and investigation costs
 
19

 
0.2
 %
 
6

 
0.1
 %
 
 
Net gains on sales, consolidation and deconsolidation of facilities
 
(118
)
 
(1.3
)%
 
(38
)
 
(0.4
)%
 
 
Operating income
 
923

 
10.0
 %
 
577

 
6.0
 %
 
 
Interest expense
 
(509
)
 
 
 
(518
)
 
 
 
 
Other non-operating expense, net
 
(2
)
 
 
 
(10
)
 
 
 
 
Loss from early extinguishment of debt
 
(2
)
 
 
 
(26
)
 
 
 
 
Income from continuing operations, before income taxes
 
410

 
 
 
23

 
 
 
 
Income tax benefit (expense)
 
(114
)
 
 
 
45

 
 
 
 
Income from continuing operations, before discontinued operations
 
296

 
 
 
68

 
 
 
 
Discontinued operations:
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
3

 
 
 

 
 
 
 
Income tax benefit (expense)
 

 
 
 

 
 
 
 
Income (loss) from discontinued operations
 
3

 
 
 

 
 
 
 
Net income
 
299

 
 
 
68

 
 
 
 
Less: Net income available to noncontrolling interests
 
174

 
 
 
176

 
 
 
 
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
 
$
125

 
 
 
$
(108
)
 
 
 
 
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax
 
$
122

 
 
 
$
(108
)
 
 
 
 
Income (loss) from discontinued operations, net of tax
 
3

 
 
 

 
 
 
 
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
 
$
125

 
 
 
$
(108
)
 
 
 
 
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
1.20

 
 
 
$
(1.08
)
 
 
 
 
Discontinued operations
 
0.03

 
 
 

 
 
 
 
 
 
$
1.23

 
 
 
$
(1.08
)
 
 
 
 
Diluted
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
1.18

 
 
 
$
(1.08
)
 
 
 
 
Discontinued operations
 
0.03

 
 
 

 
 
 
 
 
 
$
1.21

 
 
 
$
(1.08
)
 
 
 
 
Weighted average shares and dilutive securities outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
Basic
 
101,770

 
 
 
100,306

 
 
 
 
Diluted*
 
103,416

 
 
 
100,306

 
 
 
 


*Had we generated income from continuing operations in the six months ended June 30, 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 766 thousand shares.

Page 9




TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

 
 
 
 
 
 
 
June 30,
 
December 31,
(Dollars in millions)
 
2018
 
2017
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
403

 
$
611

Accounts receivable, less allowance for doubtful accounts
 
2,483

 
2,616

Inventories of supplies, at cost
 
298

 
289

Income tax receivable
 
28

 
5

Assets held for sale
 
452

 
1,017

Other current assets
 
1,041

 
1,035

Total current assets 
 
4,705

 
5,573

Investments and other assets
 
1,416

 
1,543

Deferred income taxes
 
348

 
455

Property and equipment, at cost, less accumulated depreciation and amortization
 
6,863

 
7,030

Goodwill
 
7,218

 
7,018

Other intangible assets, at cost, less accumulated amortization
 
1,793

 
1,766

Total assets 
 
$
22,343

 
$
23,385

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Current portion of long-term debt
 
$
663

 
$
146

Accounts payable
 
1,047

 
1,175

Accrued compensation and benefits
 
711

 
848

Professional and general liability reserves
 
230

 
200

Accrued interest payable
 
243

 
256

Liabilities held for sale
 
393

 
480

Other current liabilities
 
1,067

 
1,227

Total current liabilities 
 
4,354

 
4,332

Long-term debt, net of current portion
 
14,204

 
14,791

Professional and general liability reserves
 
630

 
654

Defined benefit plan obligations
 
515

 
536

Deferred income taxes
 
36

 
36

Other long-term liabilities
 
599

 
631

Total liabilities 
 
20,338

 
20,980

Commitments and contingencies
 
 
 
 
Redeemable noncontrolling interests in equity of consolidated subsidiaries
 
1,429

 
1,866

Equity:
 
 
 
 
Shareholders’ equity:
 
 
 
 
Common stock
 
7

 
7

Additional paid-in capital
 
4,722

 
4,859

Accumulated other comprehensive loss
 
(243)

 
(204)

Accumulated deficit
 
(2,222)

 
(2,390)

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

 
(2,419)

Total shareholders’ equity (deficit)
 
(154)

 
(147)

Noncontrolling interests 
 
730

 
686

Total equity
 
576

 
539

Total liabilities and equity 
 
$
22,343

 
$
23,385








Page 10



TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
 
 
 
 
 
 
 
Six Months Ended
(Dollars in millions)
 
June 30,
 
 
2018
 
2017
Net income
 
$
299

 
$
68

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
398

 
443

Provision for doubtful accounts
 

 
754

Deferred income tax expense (benefit)
 
108

 
(81
)
Stock-based compensation expense
 
20

 
29

Impairment and restructuring charges, and acquisition-related costs
 
77

 
74

Litigation and investigation costs
 
19

 
6

Net gains on sales, consolidation and deconsolidation of facilities
 
(118
)
 
(38
)
Loss from early extinguishment of debt
 
2

 
26

Equity in earnings of unconsolidated affiliates, net of distributions received
 
10

 
4

Amortization of debt discount and debt issuance costs
 
22

 
22

Pre-tax income from discontinued operations
 
(3
)
 

Other items, net
 
(1
)
 
(25
)
Changes in cash from operating assets and liabilities:
 
 
 
 
Accounts receivable
 
(13
)
 
(673
)
Inventories and other current assets
 
144

 
160

Income taxes
 
(18
)
 
(7
)
Accounts payable, accrued expenses and other current liabilities
 
(371
)
 
(345
)
Other long-term liabilities
 
(48
)
 
48

Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements
 
(63
)
 
(62
)
Net cash used in operating activities from discontinued operations, excluding income taxes
 
(3
)
 
(2
)
Net cash provided by operating activities
 
461

 
401

Cash flows from investing activities:
 
 

 
 
Purchases of property and equipment — continuing operations
 
(268
)
 
(348
)
Purchases of businesses or joint venture interests, net of cash acquired
 
(89
)
 
(26
)
Proceeds from sales of facilities and other assets
 
481

 
74

Proceeds from sales of marketable securities, long-term investments and other assets
 
143

 
16

Purchases of equity investments
 
(37
)
 
(2
)
Other long-term assets
 
3

 
(12
)
Other items, net
 
(8
)
 
(10
)
Net cash provided by (used in) investing activities
 
225

 
(308
)
Cash flows from financing activities:
 
 

 
 
Repayments of borrowings under credit facility
 
(360
)
 
(100
)
Proceeds from borrowings under credit facility
 
360

 
100

Repayments of other borrowings
 
(161
)
 
(1,029
)
Proceeds from other borrowings
 
14

 
837

Debt issuance costs
 

 
(29
)
Distributions paid to noncontrolling interests
 
(140
)
 
(123
)
Proceeds from sale of noncontrolling interests
 
7

 
14

Purchases of noncontrolling interests
 
(642
)
 
(5
)
Proceeds from exercise of stock options and employee stock purchase plan
 
14

 
3

Other items, net
 
14

 
(2
)
Net cash used in financing activities
 
(894
)
 
(334
)
Net decrease in cash and cash equivalents
 
(208
)
 
(241
)
Cash and cash equivalents at beginning of period
 
611

 
716

Cash and cash equivalents at end of period
 
$
403

 
$
475

Supplemental disclosures:
 
 

 
 
Interest paid, net of capitalized interest
 
$
(501
)
 
$
(468
)
Income tax refunds (payments), net
 
$
(21
)
 
$
(44
)

Page 11




TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions except per adjusted patient day
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
and per adjusted patient admission amounts)
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Admissions, Patient Days and Surgeries
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of hospitals (at end of period)
 
68

 
76

 
(8
)
*
68

 
76

 
(8
)
*
Total admissions
 
168,453

 
190,394

 
(11.5
)%
 
350,759

 
387,301

 
(9.4
)%
 
Adjusted patient admissions
 
306,063

 
342,439

 
(10.6
)%
 
626,931

 
689,589

 
(9.1
)%
 
Paying admissions (excludes charity and uninsured)
 
158,216

 
179,889

 
(12.0
)%
 
330,706

 
366,537

 
(9.8
)%
 
Charity and uninsured admissions
 
10,237

 
10,505

 
(2.6
)%
 
20,053

 
20,764

 
(3.4
)%
 
Admissions through emergency department
 
115,036

 
121,807

 
(5.6
)%
 
240,112

 
248,280

 
(3.3
)%
 
Paying admissions as a percentage of total admissions
 
93.9
%
 
94.5
%
 
(0.6
)%
*
94.3
%
 
94.6
%
 
(0.3
)%
*
Charity and uninsured admissions as a percentage of total admissions
 
6.1
%
 
5.5
%
 
0.6
 %
*
5.7
%
 
5.4
%
 
0.3
 %
*
Emergency department admissions as a percentage of total admissions
 
68.3
%
 
64.0
%
 
4.3
 %
*
68.5
%
 
64.1
%
 
4.4
 %
*
Surgeries — inpatient
 
46,274

 
52,083

 
(11.2
)%
 
93,497

 
103,883

 
(10.0
)%
 
Surgeries — outpatient
 
63,805

 
71,366

 
(10.6
)%
 
126,813

 
140,970

 
(10.0
)%
 
Total surgeries
 
110,079

 
123,449

 
(10.8
)%
 
220,310

 
244,853

 
(10.0
)%
 
Patient days — total
 
766,519

 
874,930

 
(12.4
)%
 
1,625,167

 
1,798,269

 
(9.6
)%
 
Adjusted patient days
 
1,373,480

 
1,552,302

 
(11.5
)%
 
2,859,619

 
3,156,000

 
(9.4
)%
 
Average length of stay (days)
 
4.55

 
4.60

 
(1.1
)%
 
4.63

 
4.64

 
(0.2
)%
 
Licensed beds (at end of period)
 
18,314

 
20,435

 
(10.4
)%
 
18,314

 
20,435

 
(10.4
)%
 
Average licensed beds
 
18,362

 
20,435

 
(10.1
)%
 
18,523

 
20,437

 
(9.4
)%
 
Utilization of licensed beds
 
45.9
%
 
47.0
%
 
(1.1
)%
*
48.5
%
 
48.6
%
 
(0.1
)%
*
Outpatient Visits
 

 
 
 
 
 

 

 
 
 
Total visits
 
1,749,847

 
1,981,848

 
(11.7
)%
 
3,592,386

 
4,021,790

 
(10.7
)%
 
Paying visits (excludes charity and uninsured)
 
1,633,372

 
1,849,697

 
(11.7
)%
 
3,359,348

 
3,757,909

 
(10.6
)%
 
Charity and uninsured visits
 
116,475

 
132,151

 
(11.9
)%
 
233,038

 
263,881

 
(11.7
)%
 
Emergency department visits
 
643,036

 
724,785

 
(11.3
)%
 
1,340,037

 
1,457,836

 
(8.1
)%
 
Paying visits as a percentage of total visits
 
93.3
%
 
93.3
%
 
 %
*
93.5
%
 
93.4
%
 
0.1
 %
*
Charity and uninsured visits as a percentage of total visits
 
6.7
%
 
6.7
%
 
 %
*
6.5
%
 
6.6
%
 
(0.1
)%
*
Total emergency department admissions and visits
 
758,072

 
846,592

 
(10.5
)%
 
1,580,149

 
1,706,116

 
(7.4
)%
 
Revenues
 
 
 
 
 
 
 

 
 
 
 
 
Net patient revenues(3)
 
$
3,443

 
$
3,719

 
(7.4
)%
 
$
7,086

 
$
7,447

 
(4.8
)%
 
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
 
 
 
 
 
 
 

 
 
 
 
 
  Net patient revenue(3) per adjusted patient
     admission
 
$
11,249

 
$
10,860

 
3.6
 %
 
$
11,303

 
$
10,799

 
4.7
 %
 
Net patient revenue(3) per adjusted patient day
 
$
2,507

 
$
2,396

 
4.6
 %
 
$
2,478

 
$
2,360

 
5.0
 %
 
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)
 
$
10,619

 
$
10,394

 
2.2
 %
 
$
10,590

 
$
10,342

 
2.4
 %
 
Net Patient Revenues(3) from:
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
 
20.4
%
 
22.0
%
 
(1.6
)%
*
20.9
%
 
22.6
%
 
(1.7
)%
*
Medicaid
 
9.1
%
 
7.5
%
 
1.6
 %
*
9.0
%
 
7.4
%
 
1.6
 %
*
Managed care
 
66.0
%
 
65.9
%
 
0.1
 %
*
65.5
%
 
65.6
%
 
(0.1
)%
*
Self-pay
 
0.2
%
 
0.5
%
 
(0.3
)%
*
0.6
%
 
0.4
%
 
0.2
 %
*
Indemnity and other
 
4.3
%
 
4.1
%
 
0.2
 %
*
4.0
%
 
4.0
%
 
 %
*
 
 
 
 
 
 
 
 
 
 
 
 
 
 



(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 12



TENET HEALTHCARE CORPORATION
SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions except per adjusted patient day
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
and per adjusted patient admission amounts)
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Admissions, Patient Days and Surgeries
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of hospitals (at end of period)
 
68

 
68

 

 
68

 
68

 

*
Total admissions
 
168,135

 
172,048

 
(2.3
)%
 
346,324

 
349,672

 
(1.0
)%
 
Adjusted patient admissions
 
305,541

 
306,278

 
(0.2
)%
 
617,838

 
616,415

 
0.2
 %
 
Paying admissions (excludes charity and uninsured)
 
157,904

 
162,630

 
(2.9
)%
 
326,458

 
331,153

 
(1.4
)%
 
Charity and uninsured admissions
 
10,231

 
9,418

 
8.6
 %
 
19,866

 
18,519

 
7.3
 %
 
Admissions through emergency department
 
114,945

 
110,486

 
4.0
 %
 
237,867

 
225,253

 
5.6
 %
 
Paying admissions as a percentage of total admissions
 
93.9
%
 
94.5
%
 
(0.6
)%
 
94.3
%
 
94.7
%
 
(0.4
)%
*
Charity and uninsured admissions as a percentage of total admissions
 
6.1
%
 
5.5
%
 
0.6
 %
 
5.7
%
 
5.3
%
 
0.4
 %
*
Emergency department admissions as a percentage of total admissions
 
68.4
%
 
64.2
%
 
4.2
 %
 
68.7
%
 
64.4
%
 
4.3
 %
*
Surgeries — inpatient
 
46,057

 
47,288

 
(2.6
)%
 
91,997

 
94,188

 
(2.3
)%
 
Surgeries — outpatient
 
63,615

 
63,642

 
 %
 
124,664

 
125,754

 
(0.9
)%
 
Total surgeries
 
109,672

 
110,930

 
(1.1
)%
 
216,661

 
219,942

 
(1.5
)%
 
Patient days — total
 
765,659

 
792,160

 
(3.3
)%
 
1,606,445

 
1,625,921

 
(1.2
)%
 
Adjusted patient days
 
1,372,048

 
1,390,154

 
(1.3
)%
 
2,820,404

 
2,824,012

 
(0.1
)%
 
Average length of stay (days)
 
4.55

 
4.60

 
(1.1
)%
 
4.64

 
4.65

 
(0.2
)%
 
Licensed beds (at end of period)
 
17,946

 
17,980

 
(0.2
)%
 
17,946

 
17,980

 
(0.2
)%
 
Average licensed beds
 
17,946

 
17,980

 
(0.2
)%
 
17,946

 
17,972

 
(0.1
)%
 
Utilization of licensed beds
 
46.9
%
 
48.4
%
 
(1.5
)%
 
49.5
%
 
50.0
%
 
(0.5
)%
*
Outpatient Visits
 
 
 
 
 
 
 
 
 
 
 
 
 
Total visits
 
1,748,312

 
1,766,625

 
(1.0
)%
 
3,542,213

 
3,577,426

 
(1.0
)%
 
Paying visits (excludes charity and uninsured)
 
1,631,963

 
1,652,532

 
(1.2
)%
 
3,312,212

 
3,351,449

 
(1.2
)%
 
Charity and uninsured visits
 
116,349

 
114,093

 
2.0
 %
 
230,001

 
225,977

 
1.8
 %
 
Emergency department visits
 
642,623

 
645,803

 
(0.5
)%
 
1,325,226

 
1,296,580

 
2.2
 %
 
Paying visits as a percentage of total visits
 
93.3
%
 
93.5
%
 
(0.2
)%
 
93.5
%
 
93.7
%
 
(0.2
)%
*
Charity and uninsured visits as a percentage of total visits
 
6.7
%
 
6.5
%
 
0.2
 %
 
6.5
%
 
6.3
%
 
0.2
 %
*
Total emergency department admissions and visits
 
757,568

 
756,289

 
0.2
 %
 
1,563,093

 
1,521,833

 
2.7
 %
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Net patient revenues(2)
 
$
3,432

 
$
3,325

 
3.2
 %
 
$
7,002

 
$
6,668

 
5.0
 %
 
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
 
 
 
 
 
 
 
 
 
 
 
 
 
  Net patient revenue(2) per adjusted patient
     admission
 
$
11,233

 
$
10,856

 
3.5
 %
 
$
11,333

 
$
10,817

 
4.8
 %
 
Net patient revenue(2) per adjusted patient day
 
$
2,501

 
$
2,392

 
4.6
 %
 
$
2,483

 
$
2,361

 
5.2
 %
 
Net Patient Revenues(2) from:
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
 
20.4
%
 
22.3
%
 
(1.9
)%
 
20.8
%
 
22.9
%
 
(2.1
)%
*
Medicaid
 
9.1
%
 
7.1
%
 
2.0
 %
 
9.0
%
 
7.1
%
 
1.9
 %
*
Managed care
 
66.1
%
 
65.8
%
 
0.3
 %
 
65.5
%
 
65.4
%
 
0.1
 %
*
Self-pay
 
0.1
%
 
0.6
%
 
(0.5
)%
 
0.7
%
 
0.5
%
 
0.2
 %
*
Indemnity and other
 
4.3
%
 
4.2
%
 
0.1
 %
 
4.0
%
 
4.1
%
 
(0.1
)%
*

(1) Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 68 hospitals operated throughout the six months ended June 30, 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 13



TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
 
 
 
 
(Dollars in millions except per share amounts)
 
Three Months Ended
 
Six Months Ended
 
 
3/31/2018
 
6/30/2018
 
6/30/2018
Net operating revenues
 
$
4,699

 
$
4,506

 
$
9,205

Equity in earnings of unconsolidated affiliates
 
25

 
39

 
64

Operating expenses:
 
 
 
 
 
 
Salaries, wages and benefits
 
2,227

 
2,135

 
4,362

Supplies
 
774

 
748

 
1,522

Other operating expenses, net
 
1,060

 
1,027

 
2,087

Electronic health record incentives
 
(1
)
 

 
(1
)
Depreciation and amortization
 
204

 
194

 
398

Impairment and restructuring charges, and acquisition-related costs
 
47

 
30

 
77

Litigation and investigation costs
 
6

 
13

 
19

Net gains on sales, consolidation and deconsolidation of facilities
 
(110
)
 
(8
)
 
(118
)
Operating income
 
517

 
406

 
923

Interest expense
 
(255
)
 
(254
)
 
(509
)
Other non-operating expense, net
 
(1
)
 
(1
)
 
(2
)
Loss from early extinguishment of debt
 
(1
)
 
(1
)
 
(2
)
Income from continuing operations, before income taxes
 
260

 
150

 
410

Income tax expense
 
(70
)
 
(44
)
 
(114
)
Income from continuing operations, before discontinued operations
 
190

 
106

 
296

Discontinued operations:
 
 
 
 
 
 
Income from operations
 
1

 
2

 
3

Income tax benefit (expense)
 

 

 

Income from discontinued operations
 
1

 
2

 
3

Net income
 
191

 
108

 
299

Less: Net income available to noncontrolling interests
 
92

 
82

 
174

Net income available to Tenet Healthcare Corporation common
   shareholders
 
$
99

 
$
26

 
$
125

Amounts available to Tenet Healthcare Corporation common
   shareholders
 
 
 
 
 
 
Income from continuing operations, net of tax
 
$
98

 
$
24

 
$
122

Income from discontinued operations, net of tax
 
1

 
2

 
3

Net income available to Tenet Healthcare Corporation common
   shareholders
 
$
99

 
$
26

 
$
125

Earnings per share available to Tenet Healthcare Corporation
   common shareholders:
 
 
 
 
 
 
Basic
 
 
 
 
 
 
Continuing operations
 
$
0.97

 
$
0.23

 
$
1.20

Discontinued operations
 
0.01

 
0.02

 
0.03

 
 
$
0.98

 
$
0.25

 
$
1.23

Diluted
 
 
 
 
 
 
Continuing operations
 
$
0.95

 
$
0.23

 
1.18

Discontinued operations
 
0.01

 
0.02

 
$
0.03

 
 
$
0.96

 
$
0.25

 
$
1.21

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

 
102,147

 
101,770

Diluted
 
102,656

 
104,177

 
103,416











Page 14




TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions except per share amounts)
 
Three Months Ended
 
Year Ended
 
 
3/31/2017
 
6/30/2017
 
9/30/2017
 
12/31/2017
 
12/31/2017
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

Equity in earnings of unconsolidated affiliates
 
29

 
28

 
38

 
49