TENET HEALTHCARE CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

INTRODUCTION TO MANAGEMENT'S DISCUSSION AND ANALYSIS
The purpose of this section, Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A"), is to provide a narrative
explanation of our financial statements that enables investors to better
understand our business, to enhance our overall financial disclosures, to
provide the context within which our financial information may be analyzed, and
to provide information about the quality of, and potential variability of, our
financial condition, results of operations and cash flows. MD&A, which should be
read in conjunction with the accompanying Condensed Consolidated Financial
Statements, includes the following sections:

•Management Overview
•Forward-Looking Statements
•Sources of Revenue for Our Hospital Operations Segment
•Results of Operations
•Liquidity and Capital Resources
•Off-Balance Sheet Arrangements
•Critical Accounting Estimates

Our business consists of our Hospital Operations and other ("Hospital
Operations") segment, our Ambulatory Care segment and our Conifer segment. Our
Hospital Operations segment is comprised of acute care and specialty hospitals,
ancillary outpatient facilities, micro­hospitals, imaging centers, physician
practices, and other care sites and clinics. At September 30, 2021, our
subsidiaries operated 60 hospitals serving primarily urban and suburban
communities in nine states. In April 2021, we completed the sale of the majority
of the urgent care centers held by our Hospital Operations segment to an
unaffiliated urgent care provider. In addition, we completed the sale of five
Miami­area hospitals and certain related operations held by our Hospital
Operations segment in August 2021. Our Ambulatory Care segment is comprised of
the operations of USPI Holding Company, Inc. ("USPI"), in which we hold an
ownership interest of approximately 95%. At September 30, 2021, USPI had
interests in 318 ambulatory surgery centers (227 consolidated) and 24 surgical
hospitals (five consolidated) in 31 states. At December 31, 2020, our Ambulatory
Care segment also included 40 urgent care centers that were classified as held
for sale and 24 imaging centers. In April 2021, we completed the divestiture of
the 40 urgent care centers and transferred the 24 imaging centers to our
Hospital Operations segment. Our Conifer segment provides revenue cycle
management and value­based care services to hospitals, health systems, physician
practices, employers and other clients, through our Conifer Holdings, Inc.
("Conifer") subsidiary. At September 30, 2021, Conifer provided services to
approximately 650 Tenet and non­Tenet hospitals and other clients nationwide. At
September 30, 2021, we owned approximately 76% of Conifer Health Solutions, LLC,
which is Conifer's principal subsidiary.

Unless otherwise indicated, all financial and statistical information included
in MD&A relates to our continuing operations, with dollar amounts expressed in
millions (except per adjusted patient admission and per adjusted patient day
amounts). Continuing operations information includes the results of our same 60
hospitals operated throughout the nine months ended September 30, 2021 and 2020,
and the five Miami­area hospitals and certain related operations we sold in
August 2021. Continuing operations information excludes the results of our
hospitals and other businesses that have been classified as discontinued
operations for accounting purposes.

MANAGEMENT OVERVIEW
IMPACT OF THE COVID-19 PANDEMIC
The spread of COVID­19 and the ensuing response of federal, state and local
authorities beginning in March 2020 resulted in a material reduction in our
patient volumes and also adversely affected our net operating revenues in the
year ended December 31, 2020. Restrictive measures, including travel bans,
social distancing, quarantines and shelter­in­place orders, reduced the number
of procedures performed at our facilities, as well as the volume of emergency
room and physician office visits. We began experiencing improvement in patient
volumes in May 2020 as various states eased stay­at­home restrictions and our
facilities were permitted to resume elective surgeries and other procedures;
however, the COVID­19 pandemic generally and, most recently, the spread of the
Delta variant, continues to impact all three segments of our business, as well
as our patients, communities and employees. Broad economic factors resulting
from the pandemic, including increased unemployment rates and reduced consumer
spending, continue to impact our patient volumes, service mix and revenue mix.
The pandemic has also continued to have an adverse effect on our operating
expenses to varying degrees in 2021. As further described below, we have been
required to utilize higher­cost temporary labor and pay premiums above standard
compensation for essential workers. In addition, we have experienced significant
price increases in medical supplies, particularly for personal protective
equipment ("PPE"), and we have encountered supply chain disruptions, including
shortages and delays.
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As described in the Management's Discussion and Analysis of Financial Condition
and Results of Operations section in Part II of our Annual Report on Form 10­K
for the year ended December 31, 2020 ("Annual Report") and below under "Sources
of Revenue for Our Hospital Operations Segment," various legislative actions
have mitigated some of the economic disruption caused by the COVID­19 pandemic
on our business. Additional funding for the Public Health and Social Services
Emergency Fund ("Provider Relief Fund" or "PRF") was among the provisions of the
COVID­19 relief legislation. In the nine months ended September 30, 2021 and
2020, we received cash payments of $65 million and $890 million, we recognized
approximately $53 million and $445 million as grant income, and we recognized
$12 million and $8 million in equity in earnings of unconsolidated affiliates,
respectively, in our accompanying Condensed Consolidated Statements of
Operations due to grants from the Provider Relief Fund and other state and local
grant programs.

Throughout MD&A, we have provided additional information on the impact of the
COVID­19 pandemic on our results of operations and the steps we have taken, and
are continuing to take, in response. The ultimate extent and scope of the
pandemic remains unknown. For information about risks and uncertainties related
to COVID­19 that could affect our results of operations, financial condition and
cash flows, see the Risk Factors section in Part I of our Annual Report.

TRENDS AND STRATEGIES
As described above and throughout MD&A, we experienced a significant disruption
to our business in 2020 due to the COVID­19 pandemic. Although we have seen
improvement in our patient volumes, we continue to experience negative impacts
of the pandemic on our business in varying degrees. Most recently, in the three
months ended September 30, 2021, we experienced a significant acceleration in
COVID­19 cases associated with the Delta variant, with a peak in such cases in
late August 2021. Throughout the COVID­19 pandemic, we have taken, and we
continue to take, various actions to increase our liquidity and mitigate the
impact of reductions in our patient volumes and operating revenues. We have
issued new senior unsecured notes and senior secured first lien notes, redeemed
existing senior unsecured notes and senior secured first lien notes, including
those with the highest interest rate and nearest maturity date of all of our
long­term debt, and amended our revolving credit facility. We also decreased our
employee headcount throughout the organization, and we deferred certain
operating expenses that were not expected to impact our response to the COVID­19
pandemic. In addition, we reduced certain variable costs across the enterprise.
We believe these actions, together with government relief packages, to the
extent available to us, will help us to continue operating during the
uncertainty caused by the COVID­19 pandemic. For further information on our
liquidity, see "Liquidity and Capital Resources" below.

Moreover, we are experiencing increased competition with other healthcare
providers in recruiting and retaining qualified personnel responsible for the
day­to­day operations of our facilities. There is a limited availability of
experienced medical support personnel nationwide, which drives up the wages and
benefits required to recruit and retain employees. In particular, like others in
the healthcare industry, we continue to experience a shortage of critical­care
nurses in certain disciplines and geographic areas, which shortage has been
exacerbated by the COVID­19 pandemic. We are treating patients with COVID­19 in
our hospitals and, in some areas, the increased demand for care is putting a
strain on our resources and staff, which has required us to utilize higher­cost
temporary labor and pay premiums above standard compensation for essential
workers. The length and extent of the disruptions caused by the COVID­19
pandemic are currently unknown; however, we expect such disruptions to continue
in 2022 and potentially through the duration of the pandemic.

In addition, we believe that several key trends are shaping the demand for
healthcare services: (1) consumers, employers and insurers are actively seeking
lower­cost solutions and better value as they focus more on healthcare spending;
(2) patient volumes are shifting from inpatient to outpatient settings due to
technological advancements and demand for care that is more convenient,
affordable and accessible; (3) the growing aging population requires greater
chronic disease management and higher­acuity treatment; and (4) consolidation
continues across the entire healthcare sector. In recent years, the healthcare
industry, in general, and the acute care hospital business, in particular, have
also experienced significant regulatory uncertainty based, in large part, on
administrative, legislative and judicial efforts to significantly modify or
repeal and potentially replace the Patient Protection and Affordable Care Act,
as amended by the Health Care and Education Reconciliation Act of 2010
("Affordable Care Act" or "ACA"). It is difficult to predict the full impact of
regulatory uncertainty on our future revenues and operations.

Driving Growth in Our Hospital Systems-We are committed to better positioning
our hospital systems and competing more effectively in the ever­evolving
healthcare environment by focusing on driving performance through operational
effectiveness, increasing capital efficiency and margins, investing in our
physician enterprise, particularly our specialist network, enhancing patient and
physician satisfaction, growing our higher­demand and higher­acuity clinical
service lines (including outpatient lines), expanding patient and physician
access, and optimizing our portfolio of assets. Over the past several years, we
have undertaken enterprise­wide cost­reduction measures, comprised primarily of
workforce reductions
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(including streamlining corporate overhead and centralized support functions),
the renegotiation of contracts with suppliers and vendors, and the consolidation
of office locations. Moreover, we established offshore support operations at our
Global Business Center ("GBC") in the Philippines. We incurred restructuring
charges in conjunction with these initiatives and our cost­saving efforts in
response to the COVID­19 pandemic in the nine months ended September 30, 2021,
and we expect to incur additional such charges through the remainder of 2021.

We also continue to exit service lines, businesses and markets that we believe
are no longer a core part of our long­term growth strategy. In April 2021, we
divested the majority of our urgent care centers operated under the MedPost and
CareSpot brands by our Hospital Operations and Ambulatory Care segments. In
addition, in August 2021, we sold five Miami­area hospitals and certain related
operations. We intend to continue to further refine our portfolio of hospitals
and other healthcare facilities when we believe such refinements will help us
improve profitability, allocate capital more effectively in areas where we have
a stronger presence, deploy proceeds on higher­return investments across our
business, enhance cash flow generation, reduce our debt and lower our ratio of
debt­to­Adjusted EBITDA.

Improving the Customer Care Experience-As consumers continue to become more
engaged in managing their health, we recognize that understanding what matters
most to them and earning their loyalty is imperative to our success. As such, we
have enhanced our focus on treating our patients as traditional customers by:
(1) establishing networks of physicians and facilities that provide convenient
access to services across the care continuum; (2) expanding service lines
aligned with growing community demand, including a focus on aging and chronic
disease patients; (3) offering greater affordability and predictability,
including simplified registration and discharge procedures, particularly in our
outpatient centers; (4) improving our culture of service; and (5) creating
health and benefit programs, patient education and health literacy materials
that are customized to the needs of the communities we serve. Through these
efforts, we intend to improve the customer care experience in every part of our
operations.

Expansion of Our Ambulatory Care Segment-We continue to focus on opportunities
to expand our Ambulatory Care segment through organic growth, building new
outpatient centers, corporate development activities and strategic partnerships.
In December 2020, we acquired controlling ownership interests in 45 ambulatory
surgery centers from SurgCenter Development (the "SCD Centers"), which
significantly increased USPI's presence in the musculoskeletal surgery market, a
high­demand clinical service line, particularly for an aging population. In the
nine months ended September 30, 2021, we acquired controlling ownership
interests in four ambulatory surgery centers in Maryland, two in Georgia and one
in Florida. We also opened three new ambulatory surgery centers - one each in
Nevada, New Mexico and Montana. We believe USPI's surgery centers and surgical
hospitals offer many advantages to patients and physicians, including greater
affordability, predictability, flexibility and convenience. Moreover, due in
part to advancements in medical technology, and due to the lower cost structure
and greater efficiencies that are attainable at a specialized outpatient site,
we believe the volume and complexity of surgical cases performed in an
outpatient setting will continue to increase following the containment of the
COVID­19 pandemic. Historically, our outpatient services have generated
significantly higher margins for us than inpatient services.

Driving Conifer's Growth While Pursuing a Tax-Free Spin-Off-We previously
announced a number of actions to support our goals of improving financial
performance and enhancing shareholder value, including the exploration of
strategic alternatives for Conifer. In July 2019, we announced our intention to
pursue a tax­free spin­off of Conifer as a separate, independent, publicly
traded company. Completion of the proposed spin­off is subject to a number of
conditions, including, among others, assurance that the separation will be
tax­free for U.S. federal income tax purposes, finalization of Conifer's capital
structure, the effectiveness of appropriate filings with the Securities and
Exchange Commission ("SEC"), and final approval from our board of directors.
Although in March 2021 we entered into a month­to­month agreement amending and
updating certain terms and conditions related to the revenue cycle management
services Conifer provides to Tenet hospitals ("Amended RCM Agreement"), the
execution of a comprehensive amendment to and restatement of the master services
agreement between Conifer and Tenet remains an additional prerequisite to the
spin­off of Conifer. We are continuing to pursue the Conifer spin­off; however,
there can be no assurance regarding the timeframe for completion, the allocation
of assets and liabilities between Tenet and Conifer, that the other conditions
of the spin­off will be met, or that it will be completed at all.

Conifer serves approximately 650 Tenet and non­Tenet hospitals and other clients
nationwide. In addition to providing revenue cycle management services to health
systems and physicians, Conifer provides support to both providers and
self­insured employers seeking assistance with clinical integration, financial
risk management and population health management. Conifer remains focused on
driving growth by continuing to market and expand its revenue cycle management
and value­based care solutions businesses. We believe that our success in
growing Conifer and increasing its profitability depends in part on our success
in executing the following strategies: (1) attracting hospitals and other
healthcare providers that currently handle their revenue cycle management
processes internally as new clients; (2) generating new client relationships
through opportunities from USPI and Tenet's acute care hospital acquisition and
divestiture activities; (3) expanding revenue cycle management and value­based
care service offerings through organic development and small acquisitions; and
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(4) leveraging data from tens of millions of patient interactions for continued
enhancement of the value­based care environment to drive competitive
differentiation.

Improving Profitability-As we return to more normal operations, we will continue
to focus on growing patient volumes and effective cost management as a means to
improve profitability. We believe our inpatient admissions have been constrained
in recent years (prior to the COVID­19 pandemic) by increased competition,
utilization pressure by managed care organizations, new delivery models that are
designed to lower the utilization of acute care hospital services, the effects
of higher patient co­pays, co­insurance amounts and deductibles, changing
consumer behavior, and adverse economic conditions and demographic trends in
certain of our markets. However, we also believe that emphasis on higher­demand
clinical service lines (including outpatient services), focus on expanding our
ambulatory care business, cultivation of our culture of service, participation
in Medicare Advantage health plans that have been experiencing higher growth
rates than traditional Medicare, and contracting strategies that create shared
value with payers should help us grow our patient volumes over time. We are also
continuing to explore new opportunities to enhance efficiency, including further
integration of enterprise­wide centralized support functions, outsourcing
additional functions unrelated to direct patient care, and reducing clinical and
vendor contract variation.

Reducing Our Leverage Over Time-All of our outstanding long­term debt has a
fixed rate of interest, except for outstanding borrowings under our revolving
credit facility, and the maturity dates of our notes are staggered from 2023
through 2031. We believe that our capital structure minimizes the near­term
impact of increased interest rates, and the staggered maturities of our debt
allow us to refinance our debt over time. It is our long­term objective to
reduce our debt and lower our ratio of debt­to­Adjusted EBITDA, primarily
through more efficient capital allocation and Adjusted EBITDA growth, which
should lower our refinancing risk. During the nine months ended September 30,
2021, we retired approximately $2.988 billion aggregate principal amount of
certain of our senior unsecured and senior secured notes. These notes were
retired using proceeds from the June 2021 sale of $1.400 billion aggregate
principal amount of 4.250% senior secured first lien notes, which will mature on
June 1, 2029 (the "2029 Senior Secured First Lien Notes"), the proceeds from the
August 2021 sale of five Miami­area hospitals and cash on hand. These
transactions reduced future annual cash interest expense payments by
approximately $96 million.

Our ability to execute on our strategies and respond to the aforementioned
trends is subject to the extent and scope of the impact on our operations of the
COVID­19 pandemic, as well as a number of other risks and uncertainties, all of
which may cause actual results to be materially different from expectations. For
information about risks and uncertainties that could affect our results of
operations, see the Forward­Looking Statements section in this report, as well
as the Forward­Looking Statements and Risk Factors sections in Part I of our
Annual Report.

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RESULTS OF OPERATIONS-OVERVIEW
We have provided below certain selected operating statistics for the three
months ended September 30, 2021 and 2020 on a continuing operations basis. The
following tables also show information about facilities in our Ambulatory Care
segment that we control and, therefore, consolidate. We believe this information
is useful to investors because it reflects our current portfolio of operations
and the recent trends we are experiencing with respect to volumes, revenues and
expenses. We present certain metrics on a per adjusted patient admission basis
to show trends other than volume.
                                                                      Continuing Operations
                                                                 Three Months Ended September 30,                         Increase
Selected Operating Statistics                                   2021                          2020                       (Decrease)
Hospital Operations - hospitals and related
outpatient facilities:
Number of hospitals (at end of period)                                   60                           65                        (5)   (1)
Total admissions                                                    145,412                      150,690                      (3.5) %
Adjusted patient admissions(2)                                      256,250                      257,704                      (0.6) %
Paying admissions (excludes charity and
uninsured)                                                          136,932                      141,300                      (3.1) %
Charity and uninsured admissions                                      8,480                        9,390                      (9.7) %
Admissions through emergency department                             110,675                      112,131                      (1.3) %
Emergency department visits, outpatient                             578,734                      463,836                      24.8  %
Total emergency department visits                                   689,409                      575,967                      19.7  %
Total surgeries                                                      91,707                       94,128                      (2.6) %
Patient days - total                                                770,175                      784,013                      (1.8) %
Adjusted patient days(2)                                          1,335,610                    1,302,605                       2.5  %
Average length of stay (days)                                          5.30                         5.20                       1.9  %
Average licensed beds                                                15,987                       17,242                      (7.3) %
Utilization of licensed beds(3)                                        52.4  %                      49.4  %                    3.0  % (1)
Total visits                                                      1,523,726                    1,402,346                       8.7  %
Paying visits (excludes charity and uninsured)                    1,423,068                    1,302,529                       9.3  %
Charity and uninsured visits                                        100,658                       99,817                       0.8  %
Ambulatory Care:
Total consolidated facilities (at end of period)                        232                          244                       (12)   (1)
Total consolidated cases                                            295,026                      544,279                     (45.8) %

(1) The change is the difference between the 2021 and 2020 amounts shown. (2) Adjusted patient admissions/days represents actual patient admissions/days adjusted to

include outpatient services provided by facilities in our Hospital Operations segment

by multiplying actual patient admissions/days by the sum of gross inpatient revenues

and outpatient revenues and dividing the results by gross inpatient revenues. (3) Utilization of licensed beds represents patient days divided by number of days in the

period divided by average licensed beds.

Total admissions decreased by 5,278, or 3.5%, in the three months ended
September 30, 2021 compared to the three months ended September 30, 2020, and
total surgeries decreased by 2,421, or 2.6%, in the 2021 period compared to the
2020 period. Total emergency department visits increased 19.7% in the three
months ended September 30, 2021 compared to the same period in the prior year.
The decrease in our patient volumes from continuing operations in the three
months ended September 30, 2021 compared to the three months ended September 30,
2020 is attributable to the sale of five Miami­area hospitals and certain
related operations in August 2021. The decrease of Ambulatory Care total
consolidated cases of 45.8% in the three months ended September 30, 2021
compared to the 2020 period is primarily due to the divestiture of USPI's urgent
care centers and the realignment of its imaging centers under our Hospital
Operations segment.
                                                                  Continuing Operations
                                                             Three Months Ended September 30,                Increase
Revenues                                                         2021                   2020                (Decrease)
Net operating revenues:
Hospital Operations prior to inter-segment
eliminations                                             $           4,030          $    3,803                       6.0  %
Ambulatory Care                                                        666                 565                      17.9  %
Conifer                                                                314                 325                      (3.4) %
Inter-segment eliminations                                            (116)               (136)                    (14.7) %
Total                                                    $           4,894          $    4,557                       7.4  %



Net operating revenues increased by $337 million, or 7.4%, in the three months
ended September 30, 2021 compared to the same period in 2020, primarily due to
continued high patient acuity, USPI's acquisition of the SCD Centers in
December 2020, favorable payer mix and negotiated commercial rate increases,
partially offset by the loss of revenues from the
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five Miami­area hospitals we sold in August 2021. During the three months ended
September 30, 2021 and 2020, we recognized net grant income of $3 million and
$(66) million, respectively, which amounts are not included in net operating
revenues. In the three months ended September 30, 2020, we recognized a
reduction of grant income reported in previous periods to comply with revised
grant guidelines the U.S. Department of Health and Human Services ("HHS")
published in September 2020.

Our accounts receivable days outstanding ("AR Days") from continuing operations
were 56.4 days at September 30, 2021 and 55.6 days at December 31, 2020,
compared to our target of less than 55 days. AR Days are calculated as our
accounts receivable from continuing operations on the last date in the quarter
divided by our net operating revenues from continuing operations for the quarter
ended on that date divided by the number of days in the quarter. This
calculation includes our Hospital Operations segment's contract assets. The AR
Days calculation excludes (i) urgent care centers operated under the MedPost and
CareSpot brands, which we divested in April 2021, (ii) five Miami­area hospitals
and certain related operations, which we sold in August 2021 and (iii) our
California provider fee revenues.
                                                                                       Continuing Operations
                                                                                  Three Months Ended September 30,                Increase
Selected Operating Expenses                                                           2021                   2020                (Decrease)
Hospital Operations:
Salaries, wages and benefits                                                  $           1,872          $    1,818                       3.0  %
Supplies                                                                                    656                 656                         -  %
Other operating expenses                                                                    894                 899                      (0.6) %
Total                                                                         $           3,422          $    3,373                       1.5  %
Ambulatory Care:
Salaries, wages and benefits                                                  $             169          $      157                       7.6  %
Supplies                                                                                    170                 128                      32.8  %
Other operating expenses                                                                     97                  97                         -  %
Total                                                                         $             436          $      382                      14.1  %
Conifer:
Salaries, wages and benefits                                                  $             168          $      167                       0.6  %
Supplies                                                                                      1                   -                          N/A
Other operating expenses                                                                     60                  62                      (3.2) %
Total                                                                         $             229          $      229                         -  %
Total:
Salaries, wages and benefits                                                  $           2,209          $    2,142                       3.1  %
Supplies                                                                                    827                 784                       5.5  %
Other operating expenses                                                                  1,051               1,058                      (0.7) %
Total                                                                         $           4,087          $    3,984                       2.6  %
Rent/lease expense(1):
Hospital Operations                                                           $              73          $       72                       1.4  %
Ambulatory Care                                                                              24                  24                         -  %
Conifer                                                                                       2                   3                     (33.3) %
Total                                                                         $              99          $       99                         -  %


(1)    Included in other operating expenses.


                                                                                      Continuing Operations
                                                                                Three Months Ended September 30,                Increase
Selected Operating Expenses per Adjusted Patient Admission                          2021                   2020                (Decrease)
Hospital Operations:
Salaries, wages and benefits per adjusted patient admission(1)               $          7,308          $    7,054                       3.6  %
Supplies per adjusted patient admission(1)                                              2,563               2,546                       0.7  %
Other operating expenses per adjusted patient admission(1)                              3,488               3,487                         -  %
Total per adjusted patient admission                                         $         13,359          $   13,087                       2.1  %

(1) Adjusted patient admissions represents actual patient admissions adjusted to include

outpatient services provided by facilities in our Hospital Operations segment by

multiplying actual patient admissions by the sum of gross inpatient revenues and

outpatient revenues and dividing the results by gross inpatient revenues.

Salaries, wages and benefits for our Hospital Operations segment increased $54
million, or 3.0%, in the three months ended September 30, 2021 compared to the
same period in 2020. This change was primarily attributable to increased
contract labor costs, increased overtime expense, annual merit increases for
certain of our employees and a greater number of employed
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physicians. These increases were partially offset by our continued focus on
cost­reduction measures and corporate efficiencies, and the sale of five
Miami­area hospitals in August 2021. On a per adjusted patient admission basis,
salaries, wages and benefits increased 3.6% in the three months ended
September 30, 2021 compared to the three months ended September 30, 2020,
primarily due to the increase in expense noted above.

Supplies expense for our Hospital Operations segment during the three months
ended September 30, 2021 was consistent with the three months ended
September 30, 2020. This consistency is attributable to cost efficiencies and
the reduction in volumes due to the sale of five Miami­area hospitals, offset by
increased costs for certain supplies as a result of the COVID­19 pandemic and
growth in our higher­acuity, supply­intensive surgical services. On a per
adjusted patient admission basis, supplies expense increased 0.7% in the three
months ended September 30, 2021 compared to the three months ended
September 30, 2020.

Other operating expenses for our Hospital Operations segment decreased $5 million, or 0.6%, in the three months ended September 30, 2021 compared to the same period in 2020. The decrease was primarily attributable to cost efficiencies and the sale of five Miami­area hospitals. On a per adjusted patient admission basis, other operating expenses in the three months ended September 30, 2021 were consistent with the three months ended September 30, 2020.

LIQUIDITY AND CAPITAL RESOURCES OVERVIEW
Cash and cash equivalents were $2.292 billion at September 30, 2021 compared to
$2.194 billion at June 30, 2021.

Significant cash flow items in the three months ended September 30, 2021 included:

•Net cash provided by operating activities before interest, taxes, discontinued
operations and restructuring charges, acquisition­related costs, and litigation
costs and settlements of $662 million (including $2 million from federal, state
and local grants);

•Proceeds from the sale of facilities and other assets of $1.111 billion;

•Capital expenditures of $111 million;

•$104 million of distributions paid to noncontrolling interests;

•Payments for restructuring charges, acquisition­related costs, and litigation costs and settlements of $31 million;

•Interest payments of $178 million; and

•Debt payments of $1.171 billion, including $1.113 billion of cash to redeem
$1.100 billion of the $1.870 billion aggregate principal amount of 4.625% senior
secured first lien notes due 2024 ("2024 Senior Secured First Lien Notes").

Net cash provided by operating activities was $1.211 billion in the nine months
ended September 30, 2021 compared to $2.961 billion in the nine months ended
September 30, 2020. Key factors contributing to the change between the 2021 and
2020 periods include the following:

•An increase in operating income before net losses on sales, consolidation and
deconsolidation of facilities; litigation and investigation costs; impairment
and restructuring charges and acquisition-related costs; depreciation and
amortization; and income recognized from government relief packages of
$986 million;

•$326 million of Medicare accelerated payments recouped in the nine months ended
September 30, 2021 compared to $1.380 billion of Medicare accelerated payments
received in the nine months ended September 30, 2020;

•$38 million of cash received from federal, state and local grants in the 2021 period compared to $848 million received in the 2020 period;

•Lower interest payments of $93 million in the 2021 period;

•A $178 million deferral of our payroll tax match in the 2020 period pursuant to COVID­19 stimulus legislation;

•Higher income tax payments of $44 million in the 2021 period;

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•A decrease of $136 million in payments on reserves for restructuring charges, acquisition­related costs, and litigation costs and settlements; and

•The timing of other working capital items.

FORWARD-LOOKING STATEMENTS
This report includes "forward­looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, each as amended. All statements, other than statements of
historical or present facts, that address activities, events, outcomes, business
strategies and other matters that we plan, expect, intend, assume, believe,
budget, predict, forecast, project, target, estimate or anticipate (and other
similar expressions) will, should or may occur in the future are forward­looking
statements, including (but not limited to) disclosure regarding (i) the impact
of the COVID-19 pandemic, (ii) our future earnings, financial position, and
operational and strategic initiatives, and (iii) developments in the healthcare
industry. Forward­looking statements represent management's expectations, based
on currently available information, as to the outcome and timing of future
events, but, by their nature, address matters that are indeterminate. They
involve known and unknown risks, uncertainties and other factors, many of which
we are unable to predict or control, that may cause our actual results,
performance or achievements to be materially different from those expressed or
implied by forward­looking statements. Such factors include, but are not limited
to, the risks described in the Forward­Looking Statements and Risk Factors
sections in Part I of our Annual Report.

When considering forward­looking statements, you should keep in mind the risk
factors and other cautionary statements in our Annual Report and in this report.
Should one or more of the risks and uncertainties described in these reports
occur, or should underlying assumptions prove incorrect, our actual results and
plans could differ materially from those expressed in any forward­looking
statement. We specifically disclaim any obligation to update any information
contained in a forward­looking statement or any forward­looking statement in its
entirety except as required by law.

All forward­looking statements attributable to us are expressly qualified in their entirety by this cautionary information.

SOURCES OF REVENUE FOR OUR HOSPITAL OPERATIONS SEGMENT
We earn revenues for patient services from a variety of sources, primarily
managed care payers and the federal Medicare program, as well as state Medicaid
programs, indemnity­based health insurance companies and uninsured patients
(that is, patients who do not have health insurance and are not covered by some
other form of third­party arrangement).

The following table shows the sources of net patient service revenues less
implicit price concessions for our hospitals and related outpatient facilities,
expressed as percentages of net patient service revenues less implicit price
concessions from all sources:
                                                     Three Months Ended                                                            Nine Months Ended
Net Patient Service Revenues Less                      September 30,                             Increase                            September 30,                            Increase
Implicit Price Concessions from:                  2021                     2020               (Decrease)(1)                    2021                     2020               (Decrease)(1)
Medicare                                                 16.6  %             18.9  %                    (2.3) %                       18.0  %             19.9  %                    (1.9) %
Medicaid                                                  9.0  %              7.1  %                     1.9  %                        7.9  %              8.0  %                    (0.1) %
Managed care(2)                                          69.2  %             67.7  %                     1.5  %                       68.1  %             66.0  %                     2.1  %
Uninsured                                                 0.9  %              1.4  %                    (0.5) %                        1.3  %              1.1  %                     0.2  %
Indemnity and other                                       4.3  %              4.9  %                    (0.6) %                        4.7  %              5.0  %                    (0.3) %

(1) The change is the difference between the 2021 and 2020 percentages shown. (2) Includes Medicare and Medicaid managed care programs.

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Our payer mix on an admissions basis for our hospitals and related outpatient
facilities, expressed as a percentage of total admissions from all sources, is
shown below:
                                                                   Three Months Ended                                                            Nine Months Ended
                                                                     September 30,                             Increase                            September 30,                            Increase
Admissions from:                                                2021                     2020               (Decrease)(1)                    2021                     2020               (Decrease)(1)
Medicare                                                               19.6  %             21.9  %                    (2.3) %                       20.6  %             23.0  %                    (2.4) %
Medicaid                                                                6.1  %              6.4  %                    (0.3) %                        5.8  %              6.3  %                    (0.5) %
Managed care(2)                                                        65.2  %             62.7  %                     2.5  %                       64.4  %             61.6  %                     2.8  %
Charity and uninsured                                                   5.8  %              6.2  %                    (0.4) %                        6.0  %              6.3  %                    (0.3) %
Indemnity and other                                                     3.3  %              2.8  %                     0.5  %                        3.2  %              2.8  %                     0.4  %

(1) The change is the difference between the 2021 and 2020 percentages shown. (2) Includes Medicare and Medicaid managed care programs.

  GOVERNMENT PROGRAMS
The Centers for Medicare and Medicaid Services ("CMS"), an agency of HHS, is the
single largest payer of healthcare services in the United States. Approximately
63 million individuals rely on healthcare benefits through Medicare, and
approximately 82 million individuals are enrolled in Medicaid and the Children's
Health Insurance Program ("CHIP"). These three programs are authorized by
federal law and administered by CMS. Medicare is a federally funded health
insurance program primarily for individuals 65 years of age and older, as well
as some younger people with certain disabilities and conditions, and is provided
without regard to income or assets. Medicaid is co­administered by the states
and is jointly funded by the federal government and state governments. Medicaid
is the nation's main public health insurance program for people with low incomes
and is the largest source of health coverage in the United States. The CHIP,
which is also co­administered by the states and jointly funded, provides health
coverage to children in families with incomes too high to qualify for Medicaid,
but too low to afford private coverage. Unlike Medicaid, the CHIP is limited in
duration and requires the enactment of reauthorizing legislation. Funding for
the CHIP has been reauthorized through federal fiscal year ("FFY") 2027.

Medicare

Medicare offers its beneficiaries different ways to obtain their medical
benefits. One option, the Original Medicare Plan (which includes "Part A" and
"Part B"), is a fee­for­service ("FFS") payment system. The other option, called
Medicare Advantage (sometimes called "Part C" or "MA Plans"), includes health
maintenance organizations ("HMOs"), preferred provider organizations ("PPOs"),
private FFS Medicare special needs plans and Medicare medical savings account
plans. Our total net patient service revenues from continuing operations of the
hospitals and related outpatient facilities in our Hospital Operations segment
for services provided to patients enrolled in the Original Medicare Plan were
$616 million and $662 million for the three months ended September 30, 2021 and
2020, respectively, and $2.001 billion and $1.964 billion for the nine months
ended September 30, 2021 and 2020, respectively.

A general description of the types of payments we receive for services provided
to patients enrolled in the Original Medicare Plan is provided in our Annual
Report. Recent regulatory and legislative updates to the terms of these payment
systems and their estimated effect on our revenues can be found under
"Regulatory and Legislative Changes" below.

Medicaid

Medicaid programs and the corresponding reimbursement methodologies vary from
state­to­state and from year­to­year. Even prior to the COVID­19 pandemic,
several states in which we operate faced budgetary challenges that resulted in
reduced Medicaid funding levels to hospitals and other providers. Because most
states must operate with balanced budgets, and the Medicaid program is generally
a significant portion of a state's budget, states can be expected to adopt or
consider adopting future legislation designed to reduce or not increase their
Medicaid expenditures. In addition, some states delay issuing Medicaid payments
to providers to manage state expenditures. As an alternative means of funding
provider payments, many of the states in which we operate have adopted
supplemental payment programs authorized under the Social Security Act.
Continuing pressure on state budgets and other factors could adversely affect
the Medicaid supplemental payments our hospitals receive.

Estimated revenues under various state Medicaid programs, including state­funded
Medicaid managed care programs, constituted approximately 18.2% and 17.9% of
total net patient service revenues less implicit price concessions of our acute
care hospitals and related outpatient facilities for the nine months ended
September 30, 2021 and 2020, respectively. We also receive disproportionate
share hospital ("DSH") and other supplemental revenues under various state
Medicaid programs. For the nine months ended September 30, 2021 and 2020, our
total Medicaid revenues attributable to DSH and other supplemental
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revenues were approximately $631 million and $533 million, respectively. The
2021 period included $153 million related to the California provider fee
program, $190 million related to the Michigan provider fee program, $35 million
related to the Texas Section 1115 waiver program, $126 million related to
Medicaid DSH programs in multiple states, and $127 million from a number of
other state and local programs.

Total Medicaid and Managed Medicaid net patient service revenues from continuing
operations recognized by the hospitals and related outpatient facilities in our
Hospital Operations segment from Medicaid­related programs in the states in
which our facilities are located, as well as from Medicaid programs in
neighboring states, for the nine months ended September 30, 2021 and 2020 were
$2.023 billion and $1.773 billion, respectively. During the nine months ended
September 30, 2021, Medicaid and Managed Medicaid revenues comprised 44% and
56%, respectively, of our Medicaid­related net patient service revenues from
continuing operations recognized by the hospitals and related outpatient
facilities in our Hospital Operations segment. These revenues are presented net
of provider taxes or assessments paid by our hospitals, which are reported as an
offset reduction to FFS Medicaid revenue.

Because we cannot predict what actions the federal government or the states may
take under existing or future legislation and/or regulatory changes to address
budget gaps, deficits, Medicaid expansion, provider fee programs or Medicaid
Section 1115 waivers, we are unable to assess the effect that any such
legislation or regulatory action might have on our business; however, the impact
on our future financial position, results of operations or cash flows could be
material.

Regulatory and Legislative Changes
Material updates to the information set forth in our Annual Report about the
Medicare and Medicaid payment systems, as well as other government programs
impacting our business, are provided below.

Payment and Policy Changes to the Medicare Inpatient Prospective Payment
Systems-Section 1886(d) of the Social Security Act requires CMS to update
inpatient FFS payment rates for hospitals reimbursed under the inpatient
prospective payment systems ("IPPS") annually. The updates generally become
effective October 1, the beginning of the federal fiscal year. In August 2021,
CMS issued final changes to the Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and Fiscal Year 2022 Rates ("Final IPPS Rule"). The
Final IPPS Rule includes the following payment and policy changes:

•A market basket increase of 2.7% for Medicare severity­adjusted
diagnosis­related group ("MS­DRG") operating payments for hospitals reporting
specified quality measure data and that are meaningful users of electronic
health record technology; CMS also finalized a 0.7% multifactor productivity
reduction required by the ACA and a 0.5% increase required by the Medicare
Access and CHIP Reauthorization Act that collectively result in a net operating
payment update of 2.5% before budget neutrality adjustments;

•Updates to the three factors used to determine the amount and distribution of Medicare uncompensated care disproportionate share ("UC­DSH") payments;

•A 1.37% net increase in the capital federal MS­DRG rate;

•An increase in the cost outlier threshold from $29,064 to $30,988;

•An extension of the New COVID­19 Treatments Add­on Payment for certain eligible products through the end of the FFY in which the public health emergency as declared by the Secretary of HHS ends; and

•The establishment of new requirements and the revision of existing requirements
for the Hospital Value­Based Purchasing, Hospital Readmissions Reduction and
Hospital Acquired Condition Reduction programs.

According to CMS, the combined impact of the payment and policy changes in the
Final IPPS Rule for operating costs will yield an average 2.6% increase in
Medicare operating MS-DRG FFS payments for hospitals in urban areas and an
average 2.6% increase in such payments for proprietary hospitals in FFY 2022. We
estimate that all of the final payment and policy changes affecting operating
MS-DRG and UC-DSH payments will result in an estimated 1.4% increase in our
annual Medicare FFS IPPS payments, which yields an estimated increase of
approximately $27 million. Because of the uncertainty associated with various
factors that may influence our future IPPS payments by individual hospital,
including legislative, regulatory or legal actions, admission volumes, length of
stay and case mix, we cannot provide any assurances regarding our estimates of
the impact of the payment and policy changes.

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Proposed Payment and Policy Changes to the Medicare Outpatient Prospective
Payment and Ambulatory Surgery Center Payment Systems-In July 2021, CMS released
proposed policy changes and payment rates for the Hospital Outpatient
Prospective Payment System ("OPPS") and Ambulatory Surgical Center ("ASC")
Payment System for calendar year ("CY") 2022 ("Proposed OPPS/ASC Rule"). The
Proposed OPPS/ASC Rule includes the following payment and policy changes:

•An estimated net increase of 2.3% for the OPPS rates based on an estimated
market basket increase of 2.5%, reduced by a multifactor productivity adjustment
required by the ACA of 0.2%;

•Continuation of the current policy of paying an adjusted amount of average
sales price ("ASP") minus 22.5% for drugs acquired under the 340B program (which
program is the subject of litigation discussed in greater detail below);

•Cessation of the elimination of the Inpatient Only List ("IPO List") (which is
the list of procedures that must be performed on an inpatient basis); efforts to
eliminate the IPO List commenced in CY 2021 and were scheduled to be completed
over a transitional period ending in CY 2024; in addition, CMS is proposing to
reinstate the 298 services removed from the IPO List in CY 2021 to the IPO List
beginning in CY 2022;

•Various modifications to the hospital price transparency requirements that took
effect on January 1, 2021, including significant increases to the civil monetary
penalty for noncompliance, as well as prohibitions to specific barriers to
accessing machine­readable price transparency files;

•A 2.3% increase to the ASC payment rates; and

•Re­adoption of the ASC Covered Procedures List ("ASC CPL") criteria in effect
in CY 2020 and removal of 258 of the 267 procedures that were added to the ASC
CPL in CY 2021.

CMS projects that the combined impact of the proposed payment and policy changes
in the Proposed OPPS/ASC Rule will yield an average 1.8% increase in Medicare
FFS OPPS payments for hospitals in urban areas and an average 2.0% increase in
Medicare FFS OPPS payments for proprietary hospitals. Based on CMS' estimates,
the projected annual impact of the payment and policy changes in the Proposed
OPPS/ASC Rule on our hospitals is an increase to Medicare FFS hospital
outpatient revenues of approximately $14 million, which represents an increase
of approximately 2.0%. Because of the uncertainty associated with various
factors that may influence our future OPPS payments, including legislative or
legal actions, volumes and case mix, as well as potential changes to the
proposed rule, we cannot provide any assurances regarding our estimate of the
impact of the proposed payment and policy changes.

Proposed Payment and Policy Changes to the Medicare Physician Fee Schedule-In
July 2021, CMS released the CY 2022 Medicare Physician Fee Schedule ("MPFS")
Proposed Rule ("MPFS Proposed Rule"). The MPFS Proposed Rule updates payment
policies, payment rates and other provisions for services reimbursed under the
MPFS on and after January 1, 2022. Under the MPFS Proposed Rule, the CY 2022
conversion factor, which is the base rate that is used to convert relative units
into payment rates, would be reduced from $34.89 to $33.58, due in part to the
expiration of the one­time 3.75% MPFS payment increase provided for in CY 2021
by the Consolidated Appropriations Act, 2021, as well as budget neutrality
rules. This change would result in an annual reduction of approximately $7
million to our FFS MPFS revenues. Because of the uncertainty associated with
various factors that may influence our future MPFS payments, including
legislative, regulatory or legal actions, volumes and case mix, as well as
potential changes to the MPFS Proposed Rule, we cannot provide any assurances
regarding our estimate of the impact of the proposed payment and policy changes.

Public Health and Social Services Emergency Fund-During the three months ended
September 30, 2021, our Hospital Operations and Ambulatory Care segments
recognized approximately $2 million of Provider Relief Fund grant income
associated with lost revenues and COVID­related costs. We recognized an
additional $1 million of Provider Relief Fund grant income from our
unconsolidated affiliates during this period. During the nine months ended
September 30, 2021, our Hospital Operations and Ambulatory Care segments
recognized approximately $40 million of Provider Relief Fund grant income
associated with lost revenues and COVID­related costs. We recognized an
additional $12 million of Provider Relief Fund grant income from our
unconsolidated affiliates during this period. Our Hospital Operations and
Ambulatory Care segments also recognized $1 million and $13 million of grant
income from state and local grant programs during the three and nine months
ended September 30, 2021, respectively. Grant income recognized by our Hospital
Operations and Ambulatory Care segments is presented in grant income, and grant
income recognized through our unconsolidated affiliates is presented in equity
in earnings of unconsolidated affiliates, in each case in our accompanying
Condensed Consolidated Statement of Operations for the three and nine months
ended September 30, 2021. Based on the uncertainty regarding future estimates of
lost revenues and
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COVID­related costs or the impact of further updates to HHS guidance, if any, we
cannot provide any assurances regarding the amount of grant income to be
recognized in the future.

Medicare and Medicaid Payment Policy Changes-The 2% sequestration reduction on
Medicare FFS and Medicare Advantage payments to hospitals, physicians and other
providers was suspended effective May 1, 2020. It was scheduled to resume on
April 1, 2021; however, on April 14, 2021, President Biden signed H.R. 1868,
which included an extension of the suspension of the 2% sequestration reduction
through December 31, 2021. The impact of the suspension on our operations was an
increase of approximately $58 million of revenues in the nine months ended
September 30, 2021. We expect the suspension to result in an increase of
approximately $80 million of revenues for the year ending December 31, 2021.
Because of the uncertainty associated with various factors that may influence
our future Medicare and Medicaid payments, including future legislative, legal
or regulatory actions, or changes in volumes and case mix, there is a risk that
actual payments received under, or the ultimate impact of, these programs will
differ materially from our expectations.

The American Rescue Plan Act of 2021-In March 2021, President Biden signed into
law the American Rescue Plan Act of 2021 ("ARPA"), a $1.9 trillion COVID­19
relief package, which includes a number of provisions that affect hospitals and
health systems, specifically:

•Additional funding for rural health care providers for COVID­19 relief;

•An incentive for states that have not already done so to expand Medicaid by temporarily increasing each respective state's Federal Medical Assistance Percentage for their base program by five percentage points for two years;

•Federal subsidies valued at 100% of the health insurance premium for eligible
individuals and families to remain on their employer­based coverage through
September 30, 2021;

•Additional COVID­19 funding for vaccines, treatment, PPE, testing, contact tracing and workforce development; and

•Funding to the Department of Labor for worker protection activities.

Significant Litigation
340B Litigation
The 340B program allows certain hospitals (i.e., only nonprofit organizations
with specific federal designations and/or funding) ("340B Hospitals") to
purchase drugs at discounted rates from drug manufacturers. In the final rule
regarding OPPS payment and policy changes for CY 2018, CMS reduced the payment
for 340B Drugs from the ASP plus 6% to ASP minus 22.5% and made a corresponding
budget­neutral increase to payments to all hospitals for other drugs and
services reimbursed under the OPPS (the "340B Payment Adjustment"). In the final
rules regarding OPPS payment and policy changes for CYs 2019, 2020 and 2021, CMS
continued the 340B Payment Adjustment. Certain hospital associations and
hospitals commenced litigation challenging CMS' authority to impose the 340B
Payment Adjustment for CYs 2018, 2019 and 2020. Previously, the U.S. District
Court for the District of Columbia (the "District Court") held that the adoption
of the 340B Payment Adjustment in the CYs 2018 and 2019 OPPS Final Rules
exceeded CMS' statutory authority by reducing drug reimbursement rates for 340B
Hospitals. In July 2020, the U.S. Court of Appeals for the District of Columbia
Circuit (the "Appeals Court") reversed the District Court's holding, finding
that HHS' decision to reduce the payment rate for 340B Drugs was based on a
reasonable interpretation of the Medicare statute. The Appeals Court
subsequently denied the 340B Hospital's petition for a rehearing. The 340B
Hospitals filed a timely petition asking the U.S. Supreme Court ("Supreme
Court") to reverse the Appeals Court's decision and, on July 2, 2021, the
Supreme Court agreed to review the case. We cannot predict what further actions
the Supreme Court, CMS or Congress might take with respect to the 340B program;
however, a reversal of the current payment policy and return to the prior 340B
payment methodology could have an adverse effect on our net operating revenues
and cash flows.

PRIVATE INSURANCE
Managed Care
We currently have thousands of managed care contracts with various HMOs and
PPOs. HMOs generally maintain a full­service healthcare delivery network
comprised of physician, hospital, pharmacy and ancillary service providers that
HMO members must access through an assigned "primary care" physician. The
member's care is then managed by his or her primary care physician and other
network providers in accordance with the HMO's quality assurance and utilization
review guidelines
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so that appropriate healthcare can be efficiently delivered in the most
cost­effective manner. HMOs typically provide reduced benefits or reimbursement
(or none at all) to their members who use non­contracted healthcare providers
for non­emergency care.

PPOs generally offer limited benefits to members who use non­contracted
healthcare providers. PPO members who use contracted healthcare providers
receive a preferred benefit, typically in the form of lower co­pays,
co­insurance or deductibles. As employers and employees have demanded more
choice, managed care plans have developed hybrid products that combine elements
of both HMO and PPO plans, including high­deductible healthcare plans that may
have limited benefits, but cost the employee less in premiums.

The amount of our managed care net patient service revenues, including Medicare
and Medicaid managed care programs, from our hospitals and related outpatient
facilities during the nine months ended September 30, 2021 and 2020 was
$7.592 billion and $6.519 billion, respectively. Our top 10 managed care payers
generated 61% of our managed care net patient service revenues for the nine
months ended September 30, 2021. During the same period, national payers
generated 43% of our managed care net patient service revenues. The remainder
came from regional or local payers. At both September 30, 2021 and December 31,
2020, 66% of our net accounts receivable for our Hospital Operations segment
were due from managed care payers.

Revenues under managed care plans are based primarily on payment terms involving
predetermined rates per diagnosis, per­diem rates, discounted FFS rates and/or
other similar contractual arrangements. These revenues are also subject to
review and possible audit by the payers, which can take several years before
they are completely resolved. The payers are billed for patient services on an
individual patient basis. An individual patient's bill is subject to adjustment
on a patient­by­patient basis in the ordinary course of business by the payers
following their review and adjudication of each particular bill. We estimate the
discounts for contractual allowances at the individual hospital level utilizing
billing data on an individual patient basis. At the end of each month, on an
individual hospital basis, we estimate our expected reimbursement for patients
of managed care plans based on the applicable contract terms. We believe it is
reasonably likely for there to be an approximately 3% increase or decrease in
the estimated contractual allowances related to managed care plans. Based on
reserves at September 30, 2021, a 3% increase or decrease in the estimated
contractual allowance would impact the estimated reserves by approximately $18
million. Some of the factors that can contribute to changes in the contractual
allowance estimates include: (1) changes in reimbursement levels for procedures,
supplies and drugs when threshold levels are triggered; (2) changes in
reimbursement levels when stop­loss or outlier limits are reached; (3) changes
in the admission status of a patient due to physician orders subsequent to
initial diagnosis or testing; (4) final coding of in­house and
discharged­not­final­billed patients that change reimbursement levels;
(5) secondary benefits determined after primary insurance payments; and
(6) reclassification of patients among insurance plans with different coverage
and payment levels. Contractual allowance estimates are periodically reviewed
for accuracy by taking into consideration known contract terms, as well as
payment history. We believe our estimation and review process enables us to
identify instances on a timely basis where such estimates need to be revised. We
do not believe there were any adjustments to estimates of patient bills that
were material to our revenues. In addition, on a corporate­wide basis, we do not
record any general provision for adjustments to estimated contractual allowances
for managed care plans. Managed care accounts, net of contractual allowances
recorded, are further reduced to their net realizable value through implicit
price concessions based on historical collection trends for these payers and
other factors that affect the estimation process.

We expect managed care governmental admissions to continue to increase as a
percentage of total managed care admissions over the near term. However, the
managed Medicare and Medicaid insurance plans typically generate lower yields
than commercial managed care plans, which have been experiencing an improved
pricing trend. Although we have benefited from solid year­over­year aggregate
managed care pricing improvements for some time, we have seen these improvements
moderate in recent years, and we believe this moderation could continue into the
future. In the nine months ended September 30, 2021, our commercial managed care
net inpatient revenue per admission from the hospitals in our Hospital
Operations segment was approximately 84% higher than our aggregate yield on a
per admission basis from government payers, including managed Medicare and
Medicaid insurance plans.

Indemnity

An indemnity­based agreement generally requires the insurer to reimburse an
insured patient for healthcare expenses after those expenses have been incurred
by the patient, subject to policy conditions and exclusions. Unlike an HMO
member, a patient with indemnity insurance is free to control his or her
utilization of healthcare and selection of healthcare providers.

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Legislative Changes
In December 2020, the No Surprises Act ("NSA") was signed into law as part of
the Consolidated Appropriations Act of 2021. The NSA is intended to address
unexpected gaps in insurance coverage that result in "surprise medical bills"
when patients unknowingly obtain medical services from physicians and other
providers outside their health insurance network, including certain emergency
services, anesthesiology services and air ambulance transportation. After the
protections go into effect on January 1, 2022, patients will be liable only for
their in­network cost­sharing amount, and providers and insurers will be given
the opportunity to negotiate reimbursement through an independent dispute
resolution process. The NSA does not set a benchmark reimbursement amount.

On July 1, 2021, HHS, along with the U.S. Department of Labor, the U.S.
Department of Treasury and the Office of Personnel Management (collectively, the
"Agencies") issued "Requirements Related to Surprise Billing; Part I" ("Part
I"), an interim final rule implementing several provisions of the NSA. Part I
addresses (i) the ban on balance billing for certain out­of­network services,
(ii) the notice and consent process that some providers may use to bill patients
for out­of­network services, (iii) patient cost­sharing calculations, and (iv) a
complaint process for any potential violations of the provisions in the law.
Notably, the regulations contain strong language against health plan actions to
deny coverage of emergency services.

On September 30, 2021, the Agencies released the interim final rule
"Requirements Related to Surprise Billing; Part II" ("Part II"), which addresses
(i) the independent dispute resolution process that providers and plans may use
to adjudicate any outstanding reimbursement disputes, (ii) the good-faith cost
estimates providers must share with uninsured or self­pay patients for scheduled
services, (iii) a process to resolve any disputes between uninsured/self­pay
patients and providers about the cost estimates, and (iv) an external review
process as part of the oversight of health plan/issuer compliance with the law
and regulations. The Agencies also established a website where an interested
party may go to apply to serve as an independent dispute resolution entity and
where providers and plans may initiate the process. While the provisions in Part
I and Part II generally go into effect on January 1, 2022, the Agencies will
accept stakeholder comments for 60 days. At this time, we are unable to assess
the effect that the NSA or regulations relating to the NSA might have on our
business, financial position, results of operations or cash flows.

UNINSURED PATIENTS
Uninsured patients are patients who do not qualify for government programs
payments, such as Medicare and Medicaid, do not have some form of private
insurance and, therefore, are responsible for their own medical bills. A
significant number of our uninsured patients are admitted through our hospitals'
emergency departments and often require high­acuity treatment that is more
costly to provide and, therefore, results in higher billings, which are the
least collectible of all accounts.

Self­pay accounts receivable, which include amounts due from uninsured patients,
as well as co­pays, co­insurance amounts and deductibles owed to us by patients
with insurance, pose significant collectability problems. At both
September 30, 2021 and December 31, 2020, approximately 4% of our net accounts
receivable for our Hospital Operations segment was self­pay. Further, a
significant portion of our implicit price concessions relates to self­pay
amounts. We provide revenue cycle management services through Conifer, which is
subject to various statutes and regulations regarding consumer protection in
areas including finance, debt collection and credit reporting activities. For
additional information, see Item 1, Business - Regulations Affecting Conifer's
Operations, of Part I of our Annual Report.

Conifer has performed systematic analyses to focus our attention on the drivers
of bad debt expense for each hospital. While emergency department use is the
primary contributor to our implicit price concessions in the aggregate, this is
not the case at all hospitals. As a result, we have increased our focus on
targeted initiatives that concentrate on non­emergency department patients as
well. These initiatives are intended to promote process efficiencies in
collecting self­pay accounts, as well as co­pay, co­insurance and deductible
amounts owed to us by patients with insurance, that we deem highly collectible.
We leverage a statistical­based collections model that aligns our operational
capacity to maximize our collections performance. We are dedicated to modifying
and refining our processes as needed, enhancing our technology and improving
staff training throughout the revenue cycle process in an effort to increase
collections and reduce accounts receivable.

Over the longer term, several other initiatives we have previously announced
should also help address the challenges associated with serving uninsured
patients. For example, our Compact with Uninsured Patients ("Compact") is
designed to offer managed care­style discounts to certain uninsured patients,
which enables us to offer lower rates to those patients who historically had
been charged standard gross charges. Under the Compact, the discount offered to
uninsured patients is recognized as a contractual allowance, which reduces net
operating revenues at the time the self­pay accounts are recorded. The uninsured
patient accounts, net of contractual allowances recorded, are further reduced to
their net realizable value through
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implicit price concessions based on historical collection trends for self­pay
accounts and other factors that affect the estimation process.

We also provide financial assistance through our charity and uninsured discount
programs to uninsured patients who are unable to pay for the healthcare services
they receive. Our policy is not to pursue collection of amounts determined to
qualify for financial assistance; therefore, we do not report these amounts in
net operating revenues. Most states include an estimate of the cost of charity
care in the determination of a hospital's eligibility for Medicaid DSH payments.
These payments are intended to mitigate our cost of uncompensated care. Some
states have also developed provider fee or other supplemental payment programs
to mitigate the shortfall of Medicaid reimbursement compared to the cost of
caring for Medicaid patients.

The initial expansion of health insurance coverage under the Affordable Care Act
resulted in an increase in the number of patients using our facilities with
either health insurance exchange or government healthcare insurance program
coverage. However, we continue to have to provide uninsured discounts and
charity care due to the failure of states to expand Medicaid coverage and for
persons living in the country who are not permitted to enroll in a health
insurance exchange or government healthcare insurance program.

The following table shows our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our uninsured and charity patients in the three and nine months ended September 30, 2021 and 2020:

                                 Three Months Ended                 Nine Months Ended
                                    September 30,                     September 30,
                                   2021             2020             2021            2020
Estimated costs for:
Uninsured patients         $      181              $ 165      $     507             $ 466
Charity care patients              25                 30             74               113
Total                      $      206              $ 195      $     581             $ 579



RESULTS OF OPERATIONS
The following two tables summarize our consolidated net operating revenues,
operating expenses and operating income from continuing operations, both in
dollar amounts and as percentages of net operating revenues, for the three and
nine months ended September 30, 2021 and 2020. We present metrics as a
percentage of net operating revenues because a significant portion of our costs
are variable.
                                                                    Three Months Ended                     Nine Months Ended
                                                                       September 30,                         September 30,
                                                                   2021                2020              2021              2020
Net operating revenues:
Hospital Operations                                          $    4,030             $ 3,803          $  12,072          $ 10,725
Ambulatory Care                                                     666                 565              1,976             1,423
Conifer                                                             314                 325                943               962
Inter-segment eliminations                                         (116)               (136)              (362)             (385)
Net operating revenues                                            4,894               4,557             14,629            12,725
Grant income                                                          3                 (66)                53               445
Equity in earnings of unconsolidated affiliates                      45                  44                141               103
Operating expenses:
Salaries, wages and benefits                                      2,209               2,142              6,690             6,193
Supplies                                                            827                 784              2,490             2,158
Other operating expenses, net                                     1,051               1,058              3,177             3,054
Depreciation and amortization                                       209                 215                654               624
Impairment and restructuring charges, and
acquisition-related costs                                            15                  57                 55               166
Litigation and investigation costs                                   29                   9                 64                13
Net gains on sales, consolidation and deconsolidation of
facilities                                                         (412)                 (1)              (427)               (4)
Operating income                                             $    1,014             $   271          $   2,120          $  1,069



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                                                                           Three Months Ended                                    Nine Months Ended
                                                                              September 30,                                        September 30,
                                                                       2021                       2020                       2021                      2020
Net operating revenues                                                     

  100.0  %              100.0  %                       100.0  %              100.0  %
Grant income                                                                    0.1  %               (1.4) %                         0.4  %                3.5  %
Equity in earnings of unconsolidated affiliates                                 0.9  %                1.0  %                         1.0  %                0.8  %
Operating expenses:
Salaries, wages and benefits                                                   45.1  %               47.1  %                        45.8  %               48.6  %
Supplies                                                                       16.9  %               17.2  %                        17.0  %               17.0  %
Other operating expenses, net                                                  21.5  %               23.2  %                        21.7  %               24.0  %
Depreciation and amortization                                                   4.3  %                4.7  %                         4.5  %                4.9  %
Impairment and restructuring charges, and
acquisition-related costs                                                       0.3  %                1.3  %                         0.4  %                1.3  %
Litigation and investigation costs                                              0.6  %                0.2  %                         0.4  %                0.1  %
Net gains on sales, consolidation and deconsolidation of
facilities                                                                     (8.4) %                  -  %                        (2.9) %                  -  %
Operating income                                                               20.7  %                5.9  %                        14.5  %                8.4  %



Total net operating revenues increased by $337 million and $1.904 billion, or
7.4% and 15.0%, for the three and nine months ended September 30, 2021,
respectively, compared to the three and nine months ended September 30, 2020,
respectively. Hospital Operations net operating revenues net of inter­segment
eliminations increased by $247 million and $1.370 billion, or 6.7% and 13.2%,
for the three and nine months ended September 30, 2021, respectively, compared
to the same three and nine­month periods in 2020. These increases were primarily
due to increased patient volumes on a same­hospital basis, high patient acuity,
favorable payer mix and negotiated commercial rate increases, partially offset
by the loss of revenues from the five Miami­area hospitals and certain related
operations we sold in August 2021. Our Hospital Operations segment also
recognized income from federal, state and local grants totaling $2 million and
$30 million during the three and nine months ended September 30, 2021,
respectively, which was not included in net operating revenues.

Ambulatory Care net operating revenues increased by $101 million and
$553 million, or 17.9% and 38.9%, for the three and nine months ended
September 30, 2021, respectively, compared to the three and nine months ended
September 30, 2020, respectively. The change in 2021 revenues for the
three­month period was driven by an increase in same­facility net operating
revenues of $27 million due primarily to higher surgical patient volumes and
acuity, incremental revenue from new service lines and negotiated commercial
rate increases, as well as an increase from acquisitions of $124 million. These
increases were partially offset by a decrease of $50 million due primarily to
the sale of our urgent care centers and the transfer of imaging centers to the
Hospital Operations segment. The change in 2021 revenues for the nine­month
period was driven by an increase in same­facility net operating revenues of
$271 million due primarily to higher surgical patient volumes and acuity,
incremental revenue from new service lines and negotiated commercial rate
increases, as well as an increase from acquisitions of $365 million. These
increases were partially offset by a decrease of $83 million due to the sale of
our urgent care centers, the transfer of imaging centers to the Hospital
Operations segment and the deconsolidation of a facility. Our Ambulatory Care
segment also recognized income from federal grants totaling $1 million and
$23 million during the three and nine months ended September 30, 2021,
respectively, which was not included in net operating revenues.

Conifer's total net operating revenues decreased by $11 million and $19 million,
or 3.4% and 2.0%, for the three and nine months ended September 30, 2021,
respectively, compared to the three and nine months ended September 30, 2020,
respectively. The decrease in both the three and nine­month periods was due to
the revised terms in the Amended RCM Agreement, partially offset by volume
recovery by its clients. The portion of Conifer's revenues from third­party
customers, which revenues are not eliminated in consolidation, increased $9
million and $4 million, or 4.8% and 0.7%, for the three and nine months ended
September 30, 2021, respectively, compared to the same three and nine­month
periods in 2020. These increases were primarily driven by the transition of the
five Miami­area hospitals sold in August 2021 to a third­party customer and new
business expansion, partially offset by expected client attrition.

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The following table shows selected operating expenses of our three reportable
business segments. Information for our Hospital Operations segment is presented
on a same­hospital basis, which includes the results of our same 60 hospitals
operated throughout the three and nine months ended September 30, 2021 and 2020
and excludes five Miami­area hospitals and certain related operations we sold in
August 2021. We present same­hospital data because we believe it provides
investors with useful information regarding the performance of our hospitals and
other operations that are comparable for the periods presented.
                                                                   Three Months Ended                                             Nine Months Ended
                                                                      September 30,                     Increase                    September 30,                    Increase
Selected Operating Expenses                                       2021                2020             (Decrease)               2021               2020             (Decrease)
Hospital Operations - Same-Hospital:
Salaries, wages and benefits                                $    1,827             $ 1,697                     7.7  %       $    5,397          $ 4,902                    10.1  %
Supplies                                                           638                 613                     4.1  %            1,885            1,722                     9.5  %
Other operating expenses                                           850                 818                     3.9  %            2,513            2,384                     5.4  %
Total                                                       $    3,315             $ 3,128                     6.0  %       $    9,795          $ 9,008                     8.7  %
Ambulatory Care:
Salaries, wages and benefits                                $      169             $   157                     7.6  %       $      512          $   438                    16.9  %
Supplies                                                           170                 128                    32.8  %              496              319                    55.5  %
Other operating expenses                                            97                  97                       -  %              295              258                    14.3  %
Total                                                       $      436             $   382                    14.1  %       $    1,303          $ 1,015                    28.4  %
Conifer:
Salaries, wages and benefits                                $      168             $   167                     0.6  %       $      508          $   511                    (0.6) %
Supplies                                                             1                   -                        N/A                3                2                    50.0  %
Other operating expenses                                            60                  62                    (3.2) %              171              193                   (11.4) %
Total                                                       $      229             $   229                       -  %       $      682          $   706                    (3.4) %

Rent/lease expense(1):
Hospital Operations                                         $       69             $    66                     4.5  %       $      210          $   188                    11.7  %
Ambulatory Care                                                     24                  24                       -  %               75               67                    11.9  %
Conifer                                                              2                   3                   (33.3) %                8                9                   (11.1) %
Total                                                       $       95             $    93                     2.2  %       $      293          $   264                    11.0  %


(1)    Included in other operating expenses.



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RESULTS OF OPERATIONS BY SEGMENT
Our operations are reported in three segments:

•Hospital Operations, which is comprised of acute care and specialty hospitals,
ancillary outpatient facilities, micro­hospitals, imaging centers, physician
practices, and other care sites and clinics;

•Our Ambulatory Care segment is comprised of USPI's ambulatory surgery centers and surgical hospitals; and

•Conifer, which provides revenue cycle management and value­based care services to hospitals, health systems, physician practices, employers and other clients.

Hospital Operations Segment
The following tables show operating statistics of our continuing operations
hospitals and related outpatient facilities on a same­hospital basis, unless
otherwise indicated, which includes the results of our same 60 hospitals
operated throughout the three and nine months ended September 30, 2021 and 2020
and excludes the five Miami­area hospitals we sold in August 2021. We present
same­hospital data because we believe it provides investors with useful
information regarding the performance of our hospitals and other operations that
are comparable for the periods presented. We present certain metrics on a
per­adjusted­patient­admission and per­adjusted­patient­day basis to show trends
other than volume. We present certain metrics as a percentage of net operating
revenues because a significant portion of our operating expenses are variable.
                                                                                                               Same-Hospital                                                                                      Same-Hospital
                                                                                                           Continuing Operations                                                                              Continuing Operations
                                                                                                             Three Months Ended                                                                                 Nine Months Ended
                                                                                                               September 30,                                       Increase                                       September 30,                                       Increase
Admissions, Patient Days and Surgeries                                                               2021                              2020                       (Decrease)                            2021                              2020                       (Decrease)
Number of hospitals (at end of period)                                                                            60                           60                        -    (1)                                    60                           60                        -    (1)
Total admissions                                                                                             140,491                      136,895                      2.6  %                                   413,942                      409,382                      1.1  %
Adjusted patient admissions(2)                                                                               248,798                      238,372                      4.4  %                                   732,540                      709,736                      3.2  %
Paying admissions (excludes charity and uninsured)                                                           132,614                      129,350                      2.5  %                                   391,432                      386,552                      1.3  %
Charity and uninsured admissions                                                                               7,877                        7,545                      4.4  %                                    22,510                       22,830                     (1.4) %
Admissions through emergency department                                                                      106,217                       99,966                      6.3  %                                   309,681                      295,582                      4.8  %
Paying admissions as a percentage of total admissions                                                           94.4  %                      94.5  %                  (0.1) % (1)                                  94.6  %                      94.4  %                   0.2  % (1)

Charity and uninsured admissions as a percentage of total admissions

                                      5.6  %                       5.5  %                   0.1  % (1)                                   5.4  %                       5.6  %                  (0.2) % (1)

Emergency department admissions as a percentage of total admissions

                                    75.6  %                      73.0  %                   2.6  % (1)                                  74.8  %                      72.2  %                   2.6  % (1)
Surgeries - inpatient                                                                                         35,535                       37,009                     (4.0) %                                   106,994                      108,272                     (1.2) %
Surgeries - outpatient                                                                                        54,119                       51,785                      4.5  %                                   161,982                      139,031                     16.5  %
Total surgeries                                                                                               89,654                       88,794                      1.0  %                                   268,976                      247,303                      8.8  %
Patient days - total                                                                                         748,012                      710,369                      5.3  %                                 2,174,982                    2,072,369                      5.0  %
Adjusted patient days(2)                                                                                   1,301,989                    1,198,744                      8.6  %                                 3,762,149                    3,481,388                      8.1  %
Average length of stay (days)                                                                                   5.32                         5.19                      2.5  %                                      5.25                         5.06                      3.8  %
Licensed beds (at end of period)                                                                              15,399                       15,467                     (0.4) %                                    15,399                       15,467                     (0.4) %
Average licensed beds                                                                                         15,399                       15,467                     (0.4) %                                    15,401                       15,451                     (0.3) %
Utilization of licensed beds(3)                                                                                 52.8  %                      49.9  %                   2.9  % (1)                                  51.7  %                      49.0  %                   2.7  % (1)

(1) The change is the difference between the 2021 and 2020 amounts shown. (2) Adjusted patient admissions/days represents actual patient admissions/days adjusted to

include outpatient services provided by facilities in our Hospital Operations segment

by multiplying actual patient admissions/days by the sum of gross inpatient revenues

and outpatient revenues and dividing the results by gross inpatient revenues. (3) Utilization of licensed beds represents patient days divided by number of days in the

period divided by average licensed beds.

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                                                                                Same-Hospital                                                                                   Same-Hospital
                                                                            Continuing Operations                                                                           Continuing Operations
                                                                              Three Months Ended                                                                              Nine Months Ended
                                                                                September 30,                                      Increase                                     September 30,                                     Increase
Outpatient Visits                                                      2021                            2020                       (Decrease)                           2021                            2020                      (Decrease)
Total visits                                                                1,360,953                   1,180,516                    15.3  %                                4,008,056                  3,392,446                    18.1  %
Paying visits (excludes charity and uninsured)                              1,265,603                   1,105,627                    14.5  %                                3,736,175                  3,153,510                    18.5  %
Charity and uninsured visits                                                   95,350                      74,889                    27.3  %                                  271,881                    238,936                    13.8  %
Emergency department visits                                                   567,260                     438,772                    29.3  %                                1,502,651                  1,406,380                     6.8  %
Surgery visits                                                                 54,119                      51,785                     4.5  %                                  161,982                    139,031                    16.5  %
Paying visits as a percentage of total visits                                    93.0  %                     93.7  %                 (0.7) % (1)                                 93.2  %                    93.0  %                  0.2  % (1)
Charity and uninsured visits as a percentage of
total visits                                                                      7.0  %                      6.3  %                  0.7  % (1)                                  6.8  %                     7.0  %                 (0.2) % (1)


(1)   The change is the difference between the 2021 and 2020 amounts shown.


                                                             Same-Hospital                                                        Same-Hospital
                                                         Continuing Operations                                                Continuing Operations
                                                          Three Months Ended                                                    Nine Months Ended
                                                             September 30,                        Increase                        September 30,                        Increase
Revenues                                                2021                  2020               (Decrease)                  2021                  2020               (Decrease)
Total segment net operating revenues(1)          $      3,799              $  3,399                     11.8  %       $     11,050              $  9,615                     14.9  %
Selected revenue data - hospitals and
related outpatient facilities:
Net patient service revenues(1)(2)               $      3,599              $  3,246                     10.9  %       $     10,498              $  9,170                     14.5  %
Net patient service revenue per adjusted
patient admission(1)(2)                          $     14,466              $ 13,617                      6.2  %       $     14,331              $ 12,920                     10.9  %
Net patient service revenue per adjusted
patient day(1)(2)                                $      2,764              $  2,708                      2.1  %       $      2,790              $  2,634                      5.9  %

(1) Revenues are net of implicit price concessions. (2) Adjusted patient admissions/days represents actual patient admissions/days adjusted to

include outpatient services provided by facilities in our Hospital Operations segment

by multiplying actual patient admissions/days by the sum of gross inpatient revenues

       and outpatient revenues and dividing the results by gross inpatient revenues.


                                                                                       Same-Hospital                                                                              Same-Hospital
                                                                                   Continuing Operations                                                                      Continuing Operations
                                                                                    Three Months Ended                                                                          Nine Months Ended
                                                                                       September 30,                                   Increase                                   September 30,                                  

Increase

Total Segment Selected Operating Expenses                                       2021                          2020                    (Decrease)                           2021                          2020                    

(Decrease)

Salaries, wages and benefits as a percentage of net operating revenues

                                                                        48.1  %                49.9  %                 (1.8) % (1)                                 48.8  %                51.0  %                 (2.2) %    (1)
Supplies as a percentage of net operating revenues                                        16.8  %                18.0  %                 (1.2) % (1)                                 17.1  %                17.9  %                 (0.8) %    (1)
Other operating expenses as a percentage of net operating
revenues                                                                                  22.4  %                24.1  %                 (1.7) % (1)                                 22.7  %                24.8  %                 (2.1) %    (1)


(1)   The change is the difference between the 2021 and 2020 amounts shown.

Revenues

Same­hospital net operating revenues increased $400 million, or 11.8%, during
the three months ended September 30, 2021 compared to the three months ended
September 30, 2020, primarily due to higher patient volumes, high patient
acuity, favorable payer mix and negotiated commercial rate increases. Our
Hospital Operations segment also recognized net grant income totaling $2 million
and $(57) million from federal, state and local grants in the three months ended
September 30, 2021 and 2020, respectively, which is not included in net
operating revenues. During the 2020 period, we recognized a reduction of grant
income to comply with revised grant guidelines HHS published in September 2020.
Same­hospital admissions and outpatient visits increased 2.6% and 15.3%,
respectively, in the three months ended September 30, 2021 compared to the same
period in 2020.

Same­hospital net operating revenues increased $1.435 billion, or 14.9%, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to higher patient volumes, high patient acuity, favorable payer mix and negotiated commercial rate increases. Our Hospital Operations segment also recognized

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grant income from federal, state and local grants totaling $30 million and
$417 million in the nine months ended September 30, 2021 and 2020, respectively,
which is not included in net operating revenues. Same­hospital admissions and
outpatient visits increased 1.1% and 18.1%, respectively, in the nine months
ended September 30, 2021 compared to the same period in 2020.

The following table shows the consolidated net accounts receivable by payer at September 30, 2021 and December 31, 2020:

                                                                         September 30,         December 31,
                                                                             2021                  2020
Medicare                                                                $        150          $        152
Medicaid                                                                          53                    49
Net cost report settlements receivable and valuation allowances                   44                    34
Managed care                                                                   1,607                 1,567
Self-pay uninsured                                                                22                    32
Self-pay balance after insurance                                                  72                    74
Estimated future recoveries                                                      139                   156
Other payers                                                                     341                   318
Total Hospital Operations                                                      2,428                 2,382
Ambulatory Care                                                                  313                   307
Total discontinued operations                                                      1                     1
Accounts receivable, net                                                $   

2,742 $ 2,690

Collection of accounts receivable has been a key area of focus, particularly
over the past several years. At September 30, 2021, our Hospital Operations
segment collection rate on self­pay accounts was approximately 25.6%. Our
self­pay collection rate includes payments made by patients, including co­pays,
co­insurance amounts and deductibles paid by patients with insurance. Based on
our accounts receivable from uninsured patients and co­pays, co­insurance
amounts and deductibles owed to us by patients with insurance at September 30,
2021, a 10% decrease or increase in our self­pay collection rate, or
approximately 3%, which we believe could be a reasonably likely change, would
result in an unfavorable or favorable adjustment to patient accounts receivable
of approximately $9 million. There are various factors that can impact
collection trends, such as changes in the economy, which in turn have an impact
on unemployment rates and the number of uninsured and underinsured patients, the
volume of patients through our emergency departments, the increased burden of
co­pays and deductibles to be made by patients with insurance, and business
practices related to collection efforts. These factors, many of which have been
affected by the COVID­19 pandemic, continuously change and can have an impact on
collection trends and our estimation process.

Payment pressure from managed care payers also affects the collectability of our
accounts receivable. We typically experience ongoing managed care payment delays
and disputes; however, we continue to work with these payers to obtain adequate
and timely reimbursement for our services. Our estimated Hospital Operations
segment collection rate from managed care payers was approximately 96.7% at
September 30, 2021.

We manage our implicit price concessions using hospital­specific goals and
benchmarks such as (1) total cash collections, (2) point­of­service cash
collections, (3) AR Days and (4) accounts receivable by aging category. The
following tables present the approximate aging by payer of our net accounts
receivable from the continuing operations of our Hospital Operations segment of
$2.384 billion and $2.348 billion at September 30, 2021 and December 31, 2020,
respectively, excluding cost report settlements receivable and valuation
allowances of $44 million and $34 million, respectively, at September 30, 2021
and December 31, 2020:
                                             September 30, 2021
                                                                   Indemnity,
                                                      Managed       Self-Pay
                       Medicare         Medicaid       Care        and Other       Total
0-60 days                     92  %         48  %        57  %           23  %      51  %
61-120 days                    4  %         24  %        16  %           14  %      15  %
121-180 days                   2  %         11  %         9  %            9  %       9  %
Over 180 days                  2  %         17  %        18  %           54  %      25  %
Total                        100  %        100  %       100  %          100  %     100  %


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                                             December 31, 2020
                                                                  Indemnity,
                                                     Managed       Self-Pay
                      Medicare         Medicaid       Care        and Other       Total
0-60 days                    91  %         33  %        58  %           24  %      52  %
61-120 days                   5  %         31  %        15  %           13  %      14  %
121-180 days                  2  %         14  %         8  %            8  %       8  %
Over 180 days                 2  %         22  %        19  %           55  %      26  %
Total                       100  %        100  %       100  %          100  %     100  %



Conifer continues to implement revenue cycle initiatives to improve our cash
flow. These initiatives are focused on standardizing and improving patient
access processes, including pre­registration, registration, verification of
eligibility and benefits, liability identification and collections at
point­of­service, and financial counseling. These initiatives are intended to
reduce denials, improve service levels to patients and increase the quality of
accounts that end up in accounts receivable. Although we continue to focus on
improving our methodology for evaluating the collectability of our accounts
receivable, we may incur future charges if there are unfavorable changes in the
trends affecting the net realizable value of our accounts receivable.

At September 30, 2021, we had a cumulative total of patient account assignments
to Conifer of $1.952 billion related to our continuing operations. These
accounts have already been written off and are not included in our receivables;
however, an estimate of future recoveries from all the accounts assigned to
Conifer is determined based on our historical experience and recorded in
accounts receivable.

Patient advocates from Conifer's Medicaid Eligibility Program ("MEP") screen
patients in the hospital to determine whether those patients meet eligibility
requirements for financial assistance programs. They also expedite the process
of applying for these government programs. Receivables from patients who are
potentially eligible for Medicaid are classified as Medicaid pending, under the
MEP, net of appropriate implicit price concessions. Based on recent trends,
approximately 97% of all accounts in the MEP are ultimately approved for
benefits under a government program, such as Medicaid.

The following table shows the approximate amount of accounts receivable in the
MEP still awaiting determination of eligibility under a government program at
September 30, 2021 and December 31, 2020 by aging category:
                    September 30, 2021       December 31, 2020
0-60 days          $                76      $               91
61-120 days                         12                      24
121-180 days                         5                       6
Over 180 days                        6                       6
Total              $                99      $              127



Salaries, Wages and Benefits
Same­hospital salaries, wages and benefits increased $130 million, or 7.7%, in
the three months ended September 30, 2021 compared to the same period in 2020.
This change was primarily attributable to increased contract labor costs,
increased overtime expense, annual merit increases for certain of our employees
and a greater number of employed physicians. This increase was partially
mitigated by our continued focus on cost­reduction measures and corporate
efficiencies. Same­hospital salaries, wages and benefits as a percentage of net
operating revenues decreased by 180 basis points to 48.1% in the three months
ended September 30, 2021 compared to the three months ended September 30, 2020,
primarily due to the growth of our net operating revenues and our focus on
strategic cost reduction measures and corporate efficiencies. Salaries, wages
and benefits expense for the three months ended September 30, 2021 and 2020
included stock­based compensation expense of $9 million and $7 million,
respectively.

Same­hospital salaries, wages and benefits increased $495 million, or 10.1%, in
the nine months ended September 30, 2021 compared to the same period in 2020.
This increase was primarily attributable to the same factors that impacted the
three­month period ended September 30, 2021 and higher incentive compensation.
Same­hospital salaries, wages and benefits as a percentage of net operating
revenues decreased by 220 basis points to 48.8% in the nine months ended
September 30, 2021 compared to the nine months ended September 30, 2020,
primarily due to the same factors that impacted the three­month period ended
September 30, 2021. Salaries, wages and benefits expense for the nine months
ended September 30, 2021 and 2020 included stock­based compensation expense of
$31 million and $22 million, respectively.

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Supplies
Same­hospital supplies expense increased $25 million, or 4.1%, in the three
months ended September 30, 2021 compared to the same period in 2020. The
increase was primarily due to higher patient volumes, the increased cost of
certain supplies as a result of the COVID­19 pandemic and growth in our
higher­acuity, supply­intensive surgical services. Same­hospital supplies
expense as a percentage of net operating revenues decreased by 120 basis points
to 16.8% in the three months ended September 30, 2021 compared to the three
months ended September 30, 2020, primarily due to the growth of our net
operating revenues and our focus on strategic cost reduction measures.

Same­hospital supplies expense increased $163 million, or 9.5%, in the nine
months ended September 30, 2021 compared to the same period in 2020. The
increase was primarily due to the same factors that impacted the three­month
period ended September 30, 2021. Same­hospital supplies expense as a percentage
of net operating revenues decreased by 80 basis points to 17.1% in the nine
months ended September 30, 2021 compared to the nine months ended
September 30, 2020 primarily due to the same factors that impacted the
three­month period ended September 30, 2021.

We strive to control supplies expense through product standardization,
consistent contract terms and end­to­end contract management, improved
utilization, bulk purchases, focused spending with a smaller number of vendors
and operational improvements. The items of current cost­reduction focus include
PPE, cardiac stents and pacemakers, orthopedics, implants, and high­cost
pharmaceuticals.

Other Operating Expenses, Net
Same­hospital other operating expenses increased by $32 million, or 3.9%, in the
three months ended September 30, 2021 compared to the same period in 2020.
Same­hospital other operating expenses as a percentage of net operating revenues
decreased by 170 basis points to 22.4% for the three months ended September 30,
2021 compared to 24.1% for the three months ended September 30, 2020, primarily
due to the growth of our net operating revenues and our focus on strategic cost
reduction measures and corporate efficiencies. The changes in other operating
expenses included:

•increased software costs of $11 million; and

•increased malpractice expense of $10 million.

Same­hospital other operating expenses increased by $129 million, or 5.4%, in
the nine months ended September 30, 2021 compared to the same period in 2020.
Same­hospital other operating expenses as a percentage of net operating revenues
decreased by 210 basis points to 22.7% in the nine months ended September 30,
2021 compared to 24.8% for the nine months ended September 30, 2020, primarily
due to the same factors that impacted the three­month period. The changes in
other operating expenses included:

•increased malpractice expense of $48 million;

•increased software costs of $42 million;

•increased rent and lease expense of $22 million;

•increased collection fees of $18 million;

•increased repair and maintenance costs of $15 million; and

•a gain on sale and leaseback of a medical office building of $12 million, which is classified as a reduction of other operating expenses, net.

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Ambulatory Care Segment
Our Ambulatory Care segment is comprised of USPI's ambulatory surgery centers
and surgical hospitals. USPI operates its surgical facilities in partnership
with local physicians and, in many of these facilities, a health system partner.
We hold an ownership interest in each facility, with each being operated through
a separate legal entity in most cases. USPI operates facilities on a day­to­day
basis through management services contracts. Our sources of earnings from each
facility consist of:

•management and administrative services revenues, computed as a percentage of each facility's net revenues (often net of implicit price concessions); and

•our share of each facility's net income (loss), which is computed by multiplying the facility's net income (loss) times the percentage of each facility's equity interests owned by USPI.

Our role as an owner and day­to­day manager provides us with significant
influence over the operations of each facility. For many of the facilities our
Ambulatory Care segment operates (110 of 342 facilities at September 30, 2021),
this influence does not represent control of the facility, so we account for our
investment in the facility under the equity method for an unconsolidated
affiliate. USPI controls 232 of the facilities our Ambulatory Care segment
operates, and we account for these investments as consolidated subsidiaries. Our
net earnings from a facility are the same under either method, but the
classification of those earnings differs. For consolidated subsidiaries, our
financial statements reflect 100% of the revenues and expenses of the
subsidiaries, after the elimination of intercompany amounts. The net profit
attributable to owners other than USPI is classified within "net income
available to noncontrolling interests."

For unconsolidated affiliates, our statements of operations reflect our earnings in two line items:

•equity in earnings of unconsolidated affiliates-our share of the net income
(loss) of each facility, which is based on the facility's net income (loss) and
the percentage of the facility's outstanding equity interests owned by USPI; and

•management and administrative services revenues, which is included in our net operating revenues-income we earn in exchange for managing the day­to­day operations of each facility, usually quantified as a percentage of each facility's net revenues less implicit price concessions.

Our Ambulatory Care segment operating income is driven by the performance of all
facilities USPI operates and by USPI's ownership interests in those facilities,
but our individual revenue and expense line items contain only consolidated
businesses, which represent 68% of those facilities. This translates to trends
in consolidated operating income that often do not correspond with changes in
consolidated revenues and expenses, which is why we disclose certain statistical
and financial data on a pro forma systemwide basis that includes both
consolidated and unconsolidated (equity method) facilities.

Results of Operations
The following table summarizes certain statement of operations items for the
periods indicated:
                                                    Three Months Ended                                           Nine Months Ended
                                                       September 30,                   Increase                    September 30,                    Increase
Ambulatory Care Results of Operations              2021              2020             (Decrease)               2021               2020             (Decrease)
Net operating revenues                         $      666          $  565                    17.9  %       $    1,976          $ 1,423                    38.9  %
Grant income                                   $        1          $   (9)                  111.1  %       $       23          $    28                   (17.9) %
Equity in earnings of unconsolidated
affiliates                                     $       43          $   41                     4.9  %       $      130          $   102                    27.5  %
Salaries, wages and benefits                   $      169          $  157                     7.6  %       $      512          $   438                    16.9  %
Supplies                                       $      170          $  128                    32.8  %       $      496          $   319                    55.5  %
Other operating expenses, net                  $       97          $   97                       -  %       $      295          $   258                    14.3  %



Revenues
Our Ambulatory Care net operating revenues increased by $101 million, or 17.9%,
during the three months ended September 30, 2021 compared to the same period in
2020. The change was driven by an increase from acquisitions of $124 million, as
well as an increase in same­facility net operating revenues of $27 million due
primarily to higher surgical patient volumes and acuity, incremental revenue
from new service lines and negotiated commercial rate increases. These increases
were partially offset by a decrease of $50 million due primarily to the sale of
our urgent care centers and the transfer
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of imaging centers to the Hospital Operations segment. Our Ambulatory Care
segment also recognized net grant income from federal grants totaling $1 million
and $(9) million during the three months ended September 30, 2021 and 2020,
respectively, which is not included in net operating revenues. During the 2020
period, we recognized a reduction of grant income to comply with revised grant
guidelines HHS published in September 2020.

Our Ambulatory Care net operating revenues increased by $553 million, or 38.9%,
during the nine months ended September 30, 2021 compared to the same period in
2020. The change was driven by an increase from acquisitions of $365 million, as
well as an increase in same­facility net operating revenues of $271 million due
primarily to higher surgical patient volumes and acuity, incremental revenue
from new service lines and negotiated commercial rate increases. These increases
were partially offset by a decrease of $83 million due primarily to the sale of
our urgent care centers and the transfer of imaging centers to the Hospital
Operations segment. Our Ambulatory Care segment also recognized grant income
from federal grants totaling $23 million and $28 million during the nine months
ended September 30, 2021 and 2020, respectively, which is not included in net
operating revenues.

Salaries, Wages and Benefits
Salaries, wages and benefits expense increased by $12 million, or 7.6%, during
the three months ended September 30, 2021 compared to the same period in 2020.
Salaries, wages and benefits expense was impacted by an increase from
acquisitions of $22 million, as well as an increase in same­facility salaries,
wages and benefits expense of $13 million due primarily to higher surgical
patient volumes, partially offset by a decrease of $23 million due primarily to
the sale of our urgent care centers and the transfer of imaging centers to the
Hospital Operations segment. Salaries, wages and benefits expense for three
months ended September 30, 2021 and 2020 included stock­based compensation
expense of $3 million and $4 million, respectively.

Salaries, wages and benefits expense increased by $74 million, or 16.9%, during
the nine months ended September 30, 2021 compared to the same period in 2020.
Salaries, wages and benefits expense was impacted by an increase from
acquisitions of $63 million, an increase in same­facility salaries, wages and
benefits expense of $44 million due primarily to higher surgical patient
volumes, partially offset by a decrease of $33 million due to the sale of our
urgent care centers, the transfer of imaging centers to the Hospital Operations
segment and the deconsolidation of a facility. Salaries, wages and benefits
expense for nine months ended September 30, 2021 and 2020 included stock­based
compensation expense of $9 million and $14 million, respectively.

Supplies

Supplies expense increased by $42 million, or 32.8%, during the three months
ended September 30, 2021 compared to the same period in 2020. The change was
driven by an increase from acquisitions of $39 million, as well as an increase
in same­facility supplies expense of $5 million due primarily to an increase in
surgical cases at our consolidated centers, higher costs driven by the higher
level of patient acuity, and higher pricing of certain supplies as a result of
the COVID­19 pandemic, partially offset by a decrease of $2 million due to the
sale of our urgent care centers and the transfer of imaging centers to the
Hospital Operations segment.

Supplies expense increased by $177 million, or 55.5%, during the nine months
ended September 30, 2021 compared to the same period in 2020. The change was
driven by an increase from acquisitions of $113 million, as well as an increase
in same­facility supplies expense of $70 million due primarily to an increase in
surgical cases at our consolidated centers, higher costs driven by the higher
level of patient acuity, and higher pricing of certain supplies as a result of
the COVID­19 pandemic, partially offset by a decrease of $6 million due to the
sale of our urgent care centers, the transfer of imaging centers to the Hospital
Operations segment and the deconsolidation of a facility.

Other Operating Expenses, Net
Other operating expenses during the three months ended September 30, 2021 were
consistent with the same period in 2020. The expense included an increase from
acquisitions of $14 million, offset by a decrease of $14 million due to the sale
of our urgent care centers and the transfer of imaging centers to the Hospital
Operations segment.

Other operating expenses increased by $37 million, or 14.3%, during the nine
months ended September 30, 2021 compared to the same period in 2020. The change
was driven by an increase from acquisitions of $40 million, as well as an
increase in same­facility other operating expenses of $21 million, partially
offset by a decrease of $24 million due to the sale of our urgent care centers
and the transfer of imaging centers to the Hospital Operations segment.

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Facility Growth
The following table summarizes the changes in our same­facility revenue
year­over­year on a pro forma systemwide basis, which includes both consolidated
and unconsolidated (equity method) facilities. While we do not record the
revenues of unconsolidated facilities, we believe this information is important
in understanding the financial performance of our Ambulatory Care segment
because these revenues are the basis for calculating our management services
revenues and, together with the expenses of our unconsolidated facilities, are
the basis for our equity in earnings of unconsolidated affiliates.
                                           Three Months Ended      Nine Months Ended
Ambulatory Care Facility Growth            September 30, 2021      September 30, 2021
Net revenues                                      4.2%                   17.4%
Cases                                             6.8%                   20.4%
Net revenue per case                             (2.5)%                  (2.5)%



Joint Ventures with Health System Partners
USPI's business model is to jointly own its facilities with local physicians
and, in many of these facilities, a not­for­profit health system partner.
Accordingly, as of September 30, 2021, the majority of facilities in our
Ambulatory Care segment are operated in this model.
                                                           Nine Months Ended
Ambulatory Care Facilities                                 September 30, 2021
Facilities:
With a health system partner                                       192
Without a health system partner                                    150
Total facilities operated                                          342

Change from December 31, 2020:
Acquisitions                                                         8
De novo                                                              3
Dispositions/Mergers                                               (65)
Total decrease in number of facilities operated                    (54)



During the nine months ended September 30, 2021, we acquired controlling
interests in four ambulatory surgery centers in Maryland, two in Georgia and one
in Florida. We paid cash totaling approximately $63 million for these
acquisitions. Other than the ambulatory surgery center located in Florida, all
of the facilities acquired are jointly owned with physicians. The Florida
facility is jointly owned with a health system partner and physicians. During
the nine months ended September 30, 2021, we transferred all 24 imaging centers
held in our Ambulatory Care segment to our Hospital Operations segment. We also
divested 40 urgent care centers during the nine months ended September 30, 2021.

During the nine months ended September 30, 2021, we acquired noncontrolling
interests in one ambulatory surgery center in New Mexico. We paid cash totaling
approximately $1 million for this acquisition, which is jointly owned with
physicians and a hospital partner. Also during the nine months ended
September 30, 2021, we sold a portion of our ownership in two ambulatory surgery
centers in which we previously had a controlling interest to a health system for
approximately $12 million, resulting in the deconsolidation of these facilities.

We also regularly engage in the purchase of equity interests with respect to our
investments in unconsolidated affiliates and consolidated facilities that do not
result in a change in control. These transactions are primarily the acquisitions
of equity interests in ambulatory surgery centers and the investment of
additional cash in facilities that need capital for new acquisitions, new
construction or other business growth opportunities. During the nine months
ended September 30, 2021, we invested approximately $13 million in such
transactions.

Conifer Segment
Revenues
Our Conifer segment generated net operating revenues of $314 million and $325
million during the three months ended September 30, 2021 and 2020, respectively,
a portion of which was eliminated in consolidation as described in Note 18 to
the accompanying Condensed Consolidated Financial Statements. The decline in
Conifer's net operating revenues of $11 million, or 3.4%, was primarily due to
the revised terms in the Amended RCM Agreement, partially offset by client
volume improvement in the 2021 period compared to the 2020 period, as well as
new business expansion. Conifer revenues from third­party customers, which
revenues are not eliminated in consolidation, increased $9 million, or 4.8%, for
the three months
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ended September 30, 2021 compared to the same period in 2020. The increase was
primarily attributable to the transition of the five Miami­area hospitals and
certain related operations sold in August 2021 to a third­party customer and new
business expansion.

Our Conifer segment generated net operating revenues of $943 million and $962
million during the nine months ended September 30, 2021 and 2020, respectively.
The decline in Conifer's net operating revenues of $19 million, or 2.0%, was
primarily due to the same factors that impacted the three­month period. Conifer
revenues from third­party customers, which revenues are not eliminated in
consolidation, increased $4 million, or 0.7%, for the nine months ended
September 30, 2021 compared to the same period in 2020. The increase was
primarily driven by the transition of the five Miami­area hospitals sold in
August 2021 to a third­party customer and new business expansion, partially
offset by expected client attrition.

The Amended RCM Agreement updates certain terms and conditions related to the
revenue cycle management services Conifer provides to Tenet hospitals. Conifer's
contract with Tenet represented 38.4% of the net operating revenues Conifer
recognized in the nine months ended September 30, 2021.

Salaries, Wages and Benefits
Salaries, wages and benefits expense for Conifer increased $1 million, or 0.6%,
in the three months ended September 30, 2021 compared to the same period in
2020, and decreased $3 million, or 0.6%, in the nine months ended
September 30, 2021 compared to the same period in 2020. Salaries, wages and
benefits expense included stock­based compensation expense of $1 million and
zero in the three­month periods ended September 30, 2021 and 2020, respectively,
and $3 million and $2 million in the nine­month periods ended September 30, 2021
and 2020, respectively.

Other Operating Expenses, Net
Other operating expenses for Conifer decreased $2 million, or 3.2%, in the three
months ended September 30, 2021 compared to the same period in 2020. Other
operating expenses for Conifer decreased $22 million, or 11.4%, in the nine
months ended September 30, 2021 compared to the same period in 2020.

Consolidated

Impairment and Restructuring Charges, and Acquisition-Related Costs
During the three months ended September 30, 2021, we recorded impairment and
restructuring charges and acquisition­related costs of $15 million, consisting
of $14 million of restructuring charges and $1 million of acquisition-related
costs. Restructuring charges consisted of $3 million of employee severance
costs, $4 million related to the transition of various administrative functions
to our GBC and $7 million of other restructuring costs. Acquisition­related
costs consisted of $1 million of transaction costs. Our impairment and
restructuring charges and acquisition­related costs for the three months ended
September 30, 2021 were comprised of $11 million from our Hospital Operations
segment, $1 million from our Ambulatory Care segment and $3 million from our
Conifer segment.

During the three months ended September 30, 2020, we recorded impairment and
restructuring charges and acquisition­related costs of $57 million, consisting
of $52 million of restructuring charges, $3 million of impairment charges and $2
million acquisition­related costs. Restructuring charges consisted of
$16 million of employee severance costs, $15 million related to the transition
of various administrative functions to our GBC, $14 million of contract and
lease termination fees, and $7 million of other restructuring costs.
Acquisition­related costs consisted of $2 million of transaction costs. Our
impairment and restructuring charges and acquisition­related costs for the three
months ended September 30, 2020 were comprised of $44 million from our Hospital
Operations segment, $2 million from our Ambulatory Care segment and $11 million
from our Conifer segment.

During the nine months ended September 30, 2021, we recorded impairment and
restructuring charges and acquisition­related costs of $55 million, consisting
of $48 million of restructuring charges, $1 million of impairment charges and
$6 million of acquisition-related costs. Restructuring charges consisted of
$13 million of employee severance costs, $16 million related to the transition
of various administrative functions to our GBC and $19 million of other
restructuring costs. Acquisition­related costs consisted of $6 million of
transaction costs. Our impairment and restructuring charges and
acquisition­related costs for the nine months ended September 30, 2021 were
comprised of $31 million from our Hospital Operations segment, $9 million from
our Ambulatory Care segment and $15 million from our Conifer segment.

During the nine months ended September 30, 2020, we recorded impairment and
restructuring charges and acquisition­related costs of $166 million, consisting
of $155 million of restructuring charges, $8 million of impairment charges and
$3 million of acquisition­related costs. Restructuring charges consisted of
$53 million of employee severance costs,
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$40 million related to the transition of various administrative functions to our
GBC, $23 million of charges due to the termination of USPI's previous management
equity plan, $15 million of contract and lease termination fees, and $24 million
of other restructuring costs. Acquisition­related costs consisted of $3 million
of transaction costs. Our impairment and restructuring charges and
acquisition­related costs for the nine months ended September 30, 2020 were
comprised of $94 million from our Hospital Operations segment, $33 million from
our Ambulatory Care segment and $39 million from our Conifer segment.

Litigation and Investigation Costs
Litigation and investigation costs for the three months ended September 30, 2021
and 2020 were $29 million and $9 million, respectively. Litigation and
investigation costs for the nine months ended September 30, 2021 and 2020 were
$64 million and $13 million, respectively. In all periods, these amounts are
primarily related to costs associated with significant legal proceedings and
governmental investigations.

Net Gains on Sales, Consolidation and Deconsolidation of Facilities
During the three months ended September 30, 2021, we recorded net gains on
sales, consolidation and deconsolidation of facilities of approximately $412
million, primarily comprised of a gain of $409 million related to the sale of
five Miami­area hospitals and certain related operations in August 2021.

During the three months ended September 30, 2020, we recorded net gains on sales, consolidation and deconsolidation of facilities of approximately $1 million, primarily related to consolidation changes of certain USPI businesses due to ownership changes.

During the nine months ended September 30, 2021, we recorded net gains on sales,
consolidation and deconsolidation of facilities of approximately $427 million,
primarily comprised of a gain of $409 million related to the sale of five
Miami­area hospitals in August 2021, a gain of $14 million related to the sale
of the majority of our urgent care centers in April 2021 and net gains of
$4 million related to other activity.

During the nine months ended September 30, 2020, we recorded net gains on sales,
consolidation and deconsolidation of facilities of approximately $4 million,
primarily comprised of gains of $12 million related to consolidation changes of
certain USPI businesses due to ownership changes, partially offset by a loss of
$5 million related to post­closing adjustments on the 2019 sale of three of our
hospitals in the Chicago area and a loss of $3 million related to post­closing
adjustments on the 2018 sale of MacNeal Hospital.

Interest Expense
Interest expense for the three months ended September 30, 2021 was $227 million
compared to $263 million for the same period in 2020. Interest expense for the
nine months ended September 30, 2021 was $702 million compared to $761 million
for the same period in 2020.

Loss from Early Extinguishment of Debt
Loss from early extinguishment of debt was $20 million and $74 million for the
three and nine months ended September 30, 2021, respectively. The loss in the
three months ended September 30, 2021 related to the redemption of our 2024
Senior Secured First Lien Notes in advance of their maturity date. The loss in
the nine­month period included the loss from the redemption of our 2024 Senior
Secured First Lien Notes, as well as losses incurred from the redemption of our
5.125% senior secured second lien notes due 2025 (the "2025 Senior Secured
Second Lien Notes") in June 2021 and the retirement of our 7.000% senior
unsecured notes due 2025 ("2025 Senior Unsecured Notes") in March 2021, both in
advance of their respective maturity dates. See Note 6 to the accompanying
Condensed Consolidated Financial Statements for additional information.

Loss from early extinguishment of debt was $312 million and $316 million for the
three and nine months ended September 30, 2020, respectively. The loss in the
three­month period related to the redemption of $2.665 billion aggregate
principal amount then outstanding of our 8.125% senior unsecured notes due 2022
("2022 Senior Notes") in advance of their maturity date in the three months
ended September 30, 2020. The loss in the nine months ended September 30, 2020
included the loss from the redemption of our 2022 Senior Notes, as well as a
loss of $8 million related to the purchase of $135 million aggregate principal
amount of the then outstanding 2022 Senior Notes in June 2020, partially offset
by $4 million of gains on the extinguishment of mortgage notes.

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Income Tax Expense
During the three months ended September 30, 2021, we recorded income tax expense
of $197 million in continuing operations on pre-tax income of $774 million
compared to an income tax benefit of $197 million on a pre-tax loss of
$304 million during the three months ended September 30, 2020. During the nine
months ended September 30, 2021, we recorded income tax expense of $303 million
in continuing operations on pre-tax income of $1.360 billion compared to an
income tax benefit of $227 million on a pre-tax loss of $5 million during the
nine months ended September 30, 2020.

The reconciliation between the amount of recorded income tax expense (benefit)
and the amount calculated at the statutory federal tax rate is shown in the
following table:
                                                             Three Months Ended                     Nine Months Ended
                                                                September 30,                         September 30,
                                                            2021              2020                2021                 2020
Tax expense (benefit) at statutory federal rate
of 21%                                                  $     163          $   (64)         $     286               $    (1)
State income taxes, net of federal income tax
benefit                                                        29               (6)                56                     9
Tax benefit attributable to noncontrolling
interests                                                     (26)             (18)               (79)                  (48)
Nondeductible goodwill                                         28                -                 35                     -

Nontaxable gains                                                -                -                  -                     3

Stock-based compensation                                       (1)               1                 (4)                    1
Change in valuation allowance                                   -             (113)                 -                  (201)

Other items                                                     4                3                  9                    10
Income tax expense (benefit)                            $     197          $  (197)         $     303               $  (227)



Net Income Available to Noncontrolling Interests
Net income available to noncontrolling interests was $129 million for the three
months ended September 30, 2021 compared to $90 million for the three months
ended September 30, 2020. Net income available to noncontrolling interests for
the 2021 period was comprised of $9 million related to our Hospital Operations
segment, $101 million related to our Ambulatory Care segment and $19 million
related to our Conifer segment. Of the portion related to our Ambulatory Care
segment, $5 million related to the minority interests in USPI.

Net income available to noncontrolling interests was $392 million for the nine
months ended September 30, 2021 compared to $237 million for the nine months
ended September 30, 2020. Net income available to noncontrolling interests for
the nine months ended September 30, 2021 was comprised of $34 million related to
our Hospital Operations segment, $306 million related to our Ambulatory Care
segment and $52 million related to our Conifer segment. Of the portion related
to our Ambulatory Care segment, $14 million related to the minority interests in
USPI.

ADDITIONAL SUPPLEMENTAL NON-GAAP DISCLOSURES
The financial information provided throughout this report, including our
Condensed Consolidated Financial Statements and the notes thereto, has been
prepared in conformity with accounting principles generally accepted in the
United States of America ("GAAP"). However, we use certain non­GAAP financial
measures defined below in communications with investors, analysts, rating
agencies, banks and others to assist such parties in understanding the impact of
various items on our financial statements, some of which are recurring or
involve cash payments. We use this information in our analysis of the
performance of our business, excluding items we do not consider relevant to the
performance of our continuing operations. In addition, we use these measures to
define certain performance targets under our compensation programs.

"Adjusted EBITDA" is a non­GAAP measure we define as net income available (loss
attributable) to Tenet Healthcare Corporation common shareholders before (1) the
cumulative effect of changes in accounting principle, (2) net loss attributable
(income available) to noncontrolling interests, (3) income (loss) from
discontinued operations, net of tax, (4) income tax benefit (expense), (5) gain
(loss) from early extinguishment of debt, (6) other non­operating income
(expense), net, (7) interest expense, (8) litigation and investigation (costs)
benefit, net of insurance recoveries, (9) net gains (losses) on sales,
consolidation and deconsolidation of facilities, (10) impairment and
restructuring charges and acquisition­related costs, (11) depreciation and
amortization, and (12) income (loss) from divested and closed businesses (i.e.,
health plan businesses). Litigation and investigation costs do not include
ordinary course of business malpractice and other litigation and related
expense.

We believe the foregoing non­GAAP measure is useful to investors and analysts
because it presents additional information about our financial performance.
Investors, analysts, company management and our board of directors utilize this
non­GAAP measure, in addition to GAAP measures, to track our financial and
operating performance and compare that
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performance to peer companies, which utilize similar non­GAAP measures in their
presentations. The human resources committee of our board of directors also uses
certain non­GAAP measures to evaluate management's performance for the purpose
of determining incentive compensation. We believe that Adjusted EBITDA is a
useful measure, in part, because certain investors and analysts use both
historical and projected Adjusted EBITDA, in addition to GAAP and other non­GAAP
measures, as factors in determining the estimated fair value of shares of our
common stock. Company management also regularly reviews the Adjusted EBITDA
performance for each operating segment. We do not use Adjusted EBITDA to measure
liquidity, but instead to measure operating performance. The non­GAAP Adjusted
EBITDA measure we utilize may not be comparable to similarly titled measures
reported by other companies. Because this measure excludes many items that are
included in our financial statements, it does not provide a complete measure of
our operating performance. Accordingly, investors are encouraged to use GAAP
measures when evaluating our financial performance.

The following table shows the reconciliation of Adjusted EBITDA to net income
available to Tenet Healthcare Corporation common shareholders (the most
comparable GAAP term) for the three and nine months ended September 30, 2021 and
2020:
                                                                               Three Months Ended                   Nine Months Ended
                                                                                  September 30,                       September 30,
                                                                              2021              2020             2021              2020

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

                                           $ 

449 $ (196) $ 665 $ (15) Less: Net income available to noncontrolling interests

                         (129)             (90)             (392)             (237)
Income from discontinued operations, net of tax                                   1                1                 -                 -
Income (loss) from continuing operations                                        577             (107)            1,057               222
Income tax benefit (expense)                                                   (197)             197              (303)              227
Loss from early extinguishment of debt                                          (20)            (312)              (74)             (316)
Other non-operating income, net                                                   7                -                16                 3
Interest expense                                                               (227)            (263)             (702)             (761)
Operating income                                                              1,014              271             2,120             1,069
Litigation and investigation costs                                              (29)              (9)              (64)              (13)

Net gains on sales, consolidation and deconsolidation of facilities

     412                1               427                 4

Impairment and restructuring charges, and acquisition-related costs

    (15)             (57)              (55)             (166)
Depreciation and amortization                                                  (209)            (215)             (654)             (624)

Adjusted EBITDA                                                           $     855          $   551          $  2,466          $  1,868

Net operating revenues                                                    $   4,894          $ 4,557          $ 14,629          $ 12,725

Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders as a % of net operating revenues

                9.2  %          (4.3) %            4.5  %           (0.1) %

Adjusted EBITDA as % of net operating revenues
(Adjusted EBITDA margin)                                                       17.5  %          12.1  %           16.9  %           14.7  %



LIQUIDITY AND CAPITAL RESOURCES
CASH REQUIREMENTS
There have been no material changes to our obligations to make future cash
payments under contracts, such as debt and lease agreements, and under
contingent commitments, such as standby letters of credit and minimum revenue
guarantees, as disclosed in our Annual Report, except for additional lease
obligations and the long­term debt transactions disclosed in Notes 1 and 6,
respectively, to our accompanying Condensed Consolidated Financial Statements.

At September 30, 2021, using the last 12 months of Adjusted EBITDA, our ratio of
total long­term debt, net of cash and cash equivalent balances, to Adjusted
EBITDA was 3.16x, or 3.47x if adjusted to include outstanding obligations
arising from cash advances received from Medicare pursuant to COVID­19 stimulus
legislation. We anticipate this ratio will fluctuate from quarter to quarter
based on earnings performance and other factors, including the use of our
revolving credit facility as a source of liquidity and acquisitions that involve
the assumption of long­term debt. We seek to manage this ratio and increase the
efficiency of our balance sheet by following our business plan and managing our
cost structure, including through possible asset divestitures, and through other
changes in our capital structure. As part of our long­term objective to manage
our capital structure, we may seek to retire, purchase, redeem or refinance some
of our outstanding debt or issue equity or convertible securities, in each case
subject to prevailing market conditions, our liquidity requirements, operating
results, contractual
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restrictions and other factors. Our ability to achieve our leverage and capital
structure objectives is subject to numerous risks and uncertainties, many of
which are described in the Forward­Looking Statements and Risk Factors sections
in Part I of our Annual Report.

Our capital expenditures primarily relate to the expansion and renovation of
existing facilities (including amounts to comply with applicable laws and
regulations), equipment and information systems additions and replacements,
introduction of new medical technologies, design and construction of new
buildings, and various other capital improvements, as well as commitments to
make capital expenditures in connection with acquisitions of businesses. Capital
expenditures were $354 million and $374 million in the nine months ended
September 30, 2021 and 2020, respectively. We anticipate that our capital
expenditures for continuing operations for the year ending December 31, 2021
will total approximately $675 million to $725 million, including $93 million
that was accrued as a liability at December 31, 2020.

Interest payments, net of capitalized interest, were $664 million and $757 million in the nine months ended September 30, 2021 and 2020, respectively.

Income tax payments, net of tax refunds, were $54 million in the nine months ended September 30, 2021 compared to $10 million in the nine months ended September 30, 2020.

SOURCES AND USES OF CASH
Our liquidity for the nine months ended September 30, 2021 was primarily derived
from net cash provided by operating activities, cash on hand and borrowings
under our revolving credit facility. During the nine months ended
September 30, 2021, we also received supplemental funds from federal, state and
local grants provided under COVID­19 relief legislation. We had $2.292 billion
of cash and cash equivalents on hand at September 30, 2021 to fund our
operations and capital expenditures, and our borrowing availability under our
credit facility was $1.802 billion based on our borrowing base calculation at
September 30, 2021.

When operating under normal conditions, our primary source of operating cash is the collection of accounts receivable. As such, our operating cash flow is impacted by levels of cash collections, as well as levels of implicit price concessions, due to shifts in payer mix and other factors.

Net cash provided by operating activities was $1.211 billion in the nine months
ended September 30, 2021 compared to $2.961 billion in the nine months ended
September 30, 2020. Key factors contributing to the change between the 2021 and
2020 periods include the following:

•An increase in operating income before net losses on sales, consolidation and
deconsolidation of facilities; litigation and investigation costs; impairment
and restructuring charges and acquisition-related costs; depreciation and
amortization; and income recognized from government relief packages of
$986 million;

•$326 million of Medicare accelerated payments recouped in the nine months ended
September 30, 2021 compared to $1.380 billion of Medicare accelerated payments
received in the nine months ended September 30, 2020;

•$38 million of cash received from federal, state and local grants in the 2021 period compared to $848 million received in the 2020 period;

•Lower interest payments of $93 million in the 2021 period;

•A $178 million deferral of our payroll tax match in the 2020 period pursuant to COVID­19 stimulus legislation;

•Higher income tax payments of $44 million in the 2021 period;

•A decrease of $136 million in payments on reserves for restructuring charges, acquisition­related costs, and litigation costs and settlements; and

•The timing of other working capital items.

Net cash provided by investing activities was $802 million for the nine months
ended September 30, 2021 compared to net cash used of $406 million for the nine
months ended September 30, 2020. The 2021 activity included an increase in
proceeds from the sale of facilities and other assets of $1.222 billion compared
to the 2020 period, primarily related to the sale of the majority of our urgent
care centers in April 2021 and the sale of five Miami­area hospitals and certain
related operations
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in August 2021. Additionally, capital expenditures decreased $20 million in the
nine months ended September 30, 2021 compared to the same period in 2020. These
inflows were partially offset by a decrease in proceeds from sales of marketable
securities, long­term investments and other assets from $44 million in the nine
months ended September 30, 2020, to $18 million in the nine months ended
September 30, 2021.

Net cash used in financing activities was $2.167 billion for the nine months
ended September 30, 2021 compared to net cash provided by financing activities
of $483 million for the nine months ended September 30, 2020. The cash activity
in the 2021 period included total payments of $3.183 billion to retire
approximately $2.988 billion aggregate principal amount of certain of our senior
unsecured and senior secured notes. Additionally, distributions to
noncontrolling interests increased from $184 million in the nine months ended
September 30, 2020 to $316 million in the nine months ended September 30, 2021.
During the nine­month period of 2021, we also repaid $26 million of Medicare
advance payments received by our Ambulatory Care segment's unconsolidated
affiliates compared to $150 million of Medicare advances and stimulus grants
received by our unconsolidated affiliates in the 2020 period. In the nine months
ended September 30, 2021, we also received proceeds from the issuance of
$1.400 billion aggregate principal amount of our 2029 Senior Secured First Lien
Notes, partially offset by debt issuance costs of $15 million. Net cash provided
by financing activities in the nine months ended September 30, 2020 included
proceeds from the issuance of $2.500 billion aggregate principal amount of our
6.125% senior notes due 2028, $700 million aggregate principal amount of our
7.500% senior secured first lien notes due 2025 and $600 million aggregate
principal amount of our 4.625% senior secured first lien notes due 2028. These
inflows were partially offset by $3.099 billion of payments for the redemption
of our 2022 Senior Notes and distributions paid to noncontrolling interests of
$184 million in the 2020 period.

We record our equity securities and our debt securities classified as
available­for­sale at fair market value. The majority of our investments are
valued based on quoted market prices or other observable inputs. We have no
investments that we expect will be negatively affected by the current economic
conditions such that they will materially impact our financial condition,
results of operations or cash flows.

DEBT INSTRUMENTS, GUARANTEES AND RELATED COVENANTS
Credit Agreement-We have a senior secured revolving credit facility that, at
September 30, 2021, provided for revolving loans in an aggregate principal
amount of up to $1.900 billion with a $200 million subfacility for standby
letters of credit. At September 30, 2021, we had no cash borrowings outstanding
under the revolving credit facility, and we had less than $1 million of standby
letters of credit outstanding. Based on our eligible receivables, $1.802 billion
was available for borrowing under the revolving credit facility at September 30,
2021. At September 30, 2021, we were in compliance with all covenants and
conditions in our senior secured revolving credit facility.

On April 24, 2020, we amended our credit agreement (as amended to date, the
"Credit Agreement") to, among other things, (i) increase the aggregate revolving
credit commitments from $1.500 billion to $1.900 billion (the "Increased
Commitments"), subject to borrowing availability, and (ii) increase the advance
rate and raise limits on certain eligible accounts receivable in the calculation
of the borrowing base, in each case, for an incremental period of 364 days. In
April 2021, we further amended the Credit Agreement to, among other things,
extend the availability of the Increased Commitments through April 22, 2022 and
reduce the interest rate margins. See Note 6 to the accompanying Condensed
Consolidated Financial Statements for additional information about our Credit
Agreement and related amendments.

Letter of Credit Facility-In March 2020, we amended our letter of credit
facility (as amended, the "LC Facility") to extend the scheduled maturity date
of the LC Facility from March 7, 2021 to September 12, 2024 and to increase the
aggregate principal amount of standby and documentary letters of credit that
from time to time may be issued thereunder from $180 million to $200 million. On
July 29, 2020, we further amended the LC Facility to incrementally increase the
maximum secured debt covenant from 4.25 to 1.00 on a quarterly basis up to 6.00
to 1.00 for the quarter ended March 31, 2021, at which point the maximum ratio
began to step down incrementally on a quarterly basis through the quarter ending
December 31, 2021. At September 30, 2021, the effective maximum secured debt
covenant was 5.00 to 1.00. Obligations under the LC Facility are guaranteed and
secured by a first­priority pledge of the capital stock and other ownership
interests of certain of our wholly owned domestic hospital subsidiaries on an
equal ranking basis with our senior secured first lien notes. At
September 30, 2021, we were in compliance with all covenants and conditions in
the LC Facility. At September 30, 2021, we had $139 million of standby letters
of credit outstanding under the LC Facility.

Senior Unsecured and Senior Secured Notes-On September 10, 2021, we redeemed
approximately $1.100 billion of the then outstanding $1.870 billion aggregate
principal amount of our 2024 Senior Secured First Lien Notes in advance of their
maturity date. We paid $1.113 billion to redeem the notes, which was primarily
funded with the proceeds from the sale of five Miami­area hospitals and certain
related operations in August 2021. In connection with the redemption, we
recorded a loss from
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early extinguishment of debt of $20 million in the three months ended September
30, 2021, primarily related to the difference between the purchase price and the
par value of the notes, as well as the write­off of associated unamortized
issuance costs.

On June 2, 2021, we issued $1.400 billion aggregate principal amount of our
2029 Senior Secured First Lien Notes. We will pay interest on these notes
semi­annually in arrears on June 1 and December 1 of each year, commencing on
December 1, 2021. The proceeds from the sale of the 2029 Senior Secured First
Lien Notes were used, after payment of fees and expenses, together with cash on
hand, to finance the redemption of all $1.410 billion aggregate principal amount
then outstanding of our 2025 Senior Secured Second Lien Notes in advance of
their maturity date for approximately $1.428 billion. In connection with the
redemption, we recorded a loss from early extinguishment of debt of
approximately $31 million in the three months ended June 30, 2021, primarily
related to the difference between the purchase price and the par value of the
2025 Senior Secured Second Lien Notes, as well as the write­off of associated
unamortized issuance costs.

In March 2021, we retired approximately $478 million aggregate principal amount
of our 2025 Senior Unsecured Notes in advance of their maturity date. We paid
approximately $495 million from cash on hand to retire the notes. In connection
with the retirement, we recorded a loss from early extinguishment of debt of $23
million in the three months ended March 31, 2021, primarily related to the
difference between the purchase price and the par value of the notes, as well as
the write-off of associated unamortized issuance costs.

For additional information regarding our long-term debt, see Note 6 to the accompanying Condensed Consolidated Financial Statements and Note 8 to the Consolidated Financial Statements included in our Annual Report.

LIQUIDITY

Broad economic factors resulting from the COVID­19 pandemic, including increased
unemployment rates and reduced consumer spending, are impacting our service mix,
revenue mix and patient volumes. Business closings and layoffs in the areas we
operate have led to increases in the uninsured and underinsured populations and
adversely affect demand for our services, as well as the ability of patients to
pay for services as rendered. Any increase in the amount of or deterioration in
the collectability of patient accounts receivable could adversely affect our
cash flows and results of operations. If general economic conditions continue to
deteriorate or remain uncertain for an extended period of time, our liquidity
and ability to repay our outstanding debt may be impacted.

Throughout the COVID­19 pandemic, we have taken, and we continue to take,
various actions to increase our liquidity and mitigate the impact of reductions
in our patient volumes and operating revenues. These actions included the sale
and redemption of various senior unsecured and senior secured notes, which
eliminated any significant debt maturities until June 2023 and will reduce our
future annual cash interest expense payments. In April 2021, we further amended
our Credit Agreement to extend the availability of the Increased Commitments
through April 22, 2022. In addition, we have continued to focus on
cost­reduction measures and corporate efficiencies to substantially offset
incremental costs, including temporary staffing and premium pay, as well as
higher supply costs for PPE. We have also sought to compensate for the COVID­19
pandemic's disruption of our patient volumes and mix by growing our services for
which demand has been more resilient, including our higher­acuity service lines,
and we expect demand for these higher­acuity service lines will continue to grow
in the future. We believe all of these actions, together with government relief
packages, to the extent available to us, will help us to continue operating
during the uncertainty caused by the COVID­19 pandemic.

From time to time, we expect to engage in additional capital markets, bank credit and other financing activities depending on our needs and financing alternatives available at that time. We believe our existing debt agreements provide flexibility for future secured or unsecured borrowings.

Our cash on hand fluctuates day­to­day throughout the year based on the timing
and levels of routine cash receipts and disbursements, including our book
overdrafts, and required cash disbursements, such as interest payments and
income tax payments, as well as cash disbursements required to respond to the
COVID­19 pandemic. These fluctuations result in material intra-quarter net
operating and investing uses of cash that have caused, and in the future may
cause, us to use our Credit Agreement as a source of liquidity. We believe that
existing cash and cash equivalents on hand, borrowing availability under our
Credit Agreement, anticipated future cash provided by our operating activities
and possible additional government relief packages should be adequate to meet
our current cash needs. These sources of liquidity, in combination with any
potential future debt incurrence, should also be adequate to finance planned
capital expenditures, payments on the current portion of our long-term debt,
payments to joint venture partners, including those related to put and call
arrangements and other presently known operating needs.

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Long-term liquidity for debt service and other purposes will be dependent on the
amount of cash provided by operating activities and, subject to favorable market
and other conditions, the successful completion of future borrowings and
potential refinancings. However, our cash requirements could be materially
affected by the use of cash in acquisitions of businesses, repurchases of
securities, the exercise of put rights or other exit options by our joint
venture partners, and contractual commitments to fund capital expenditures in,
or intercompany borrowings to, businesses we own. In addition, liquidity could
be adversely affected by a deterioration in our results of operations, including
our ability to generate sufficient cash from operations, as well as by the
various risks and uncertainties discussed in this section, other sections of
this report and in our Annual Report, including any costs associated with legal
proceedings and government investigations.

We do not rely on commercial paper or other short-term financing arrangements
nor do we enter into repurchase agreements or other short-term financing
arrangements not otherwise reported in our balance sheet. In addition, we do not
have significant exposure to floating interest rates given that all of our
current long-term indebtedness has fixed rates of interest except for borrowings
under our Credit Agreement.

OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that may have a current or future
material effect on our financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources, except for
$278 million of standby letters of credit outstanding and guarantees at
September 30, 2021.

CRITICAL ACCOUNTING ESTIMATES
In preparing our Condensed Consolidated Financial Statements in conformity with
GAAP, we must use estimates and assumptions that affect the amounts reported in
our Condensed Consolidated Financial Statements and accompanying notes. We
regularly evaluate the accounting policies and estimates we use. In general, we
base the estimates on historical experience and on assumptions that we believe
to be reasonable, given the particular circumstances in which we operate. Actual
results may vary from those estimates.

We consider our critical accounting estimates to be those that (1) involve
significant judgments and uncertainties, (2) require estimates that are more
difficult for management to determine, and (3) may produce materially different
outcomes under different conditions or when using different assumptions.

Our critical accounting estimates have not changed from the description provided in our Annual Report.

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