Supplemental Financial Disclosures

2Q20 Earnings Release

1

Tenet Healthcare Corporation

Supplemental Financial Disclosures

2Q20 Earnings Release

Table of Contents

Description

Page

Consolidated Statements of Operations:

- All FY 2020 quarters

3

- All FY 2019 quarters

4

Segment Growth Rates:

- Hospital Operations and other segment: Same-hospital growth in revenues and volumes

5

- Ambulatory Care segment: Same-facilitysystem-wide growth in revenues and volumes

6

- Ambulatory Care segment: Growth in net operating revenues, Adjusted EBITDA, EBITDA less NCI

7

Business Segments - Revenues and EBITDA by quarter, FY 2019 and FY 2018

8

Ambulatory Care segment - Statements of Operations, GAAP and Unconsolidated Affiliates:

- 2Q20 vs. 2Q19

9

- YTD 2Q20 vs. YTD 2Q19

10

Hospital Operations and Other segment - Selected Statistics - Continuing Total Hospitals:

- 2Q20 vs. 2Q19; YTD 2Q20 vs. YTD 2Q19

11

- All FY 2020 quarters

12

- All FY 2019 quarters

13

Hospital Operations and Other segment - Selected Statistics - Continuing Same Hospitals:

- 2Q20 vs. 2Q19; YTD 2Q20 vs. YTD 2Q19

14

- All FY 2020 quarters

15

- All FY 2019 quarters

16

Uncompensated Care Trends

17

GAAP to non-GAAP Reconciliations:

Table #1 - Reconciliations of Net Income to Adjusted Net Income

18

Table #2 - Reconciliations of Net Income to Adjusted EBITDA

20

Table #3 - Reconciliations of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow

22

Non-GAAP Definitions

23

Page 2

TENET HEALTHCARE CORPORATION

Consolidated Statements of Operations

(Unaudited)

Six

(Dollars in millions except per share amounts)

Three Months Ended

Months

Ended

3/31/2020

6/30/2020

6/30/2020

Net operating revenues

$

4,520

$

3,648

$

8,168

Grant income

-

511

511

Equity in earnings of unconsolidated affiliates

28

31

59

Operating expenses:

Salaries, wages and benefits

2,187

1,864

4,051

Supplies

763

611

1,374

Other operating expenses, net

1,013

983

1,996

Depreciation and amortization

203

206

409

Impairment and restructuring charges, and acquisition-related costs

55

54

109

Litigation and investigation costs

2

2

4

Net gains on sales, consolidation and deconsolidation of facilities

(2)

(1)

(3)

Operating income

327

471

798

Interest expense

(243)

(255)

(498)

Other non-operating income, net

1

2

3

Loss from early extinguishment of debt

-

(4)

(4)

Income from continuing operations, before income taxes

85

214

299

Income tax benefit (expense)

75

(45)

30

Income from continuing operations, before discontinued operations

160

169

329

Discontinued operations:

Loss from operations

(1)

-

(1)

Income tax expense

-

-

-

Loss from discontinued operations

(1)

-

(1)

Net income

159

169

328

Less: Net income available to noncontrolling interests

66

81

147

Net income available to Tenet Healthcare Corporation common shareholders

$

93

$

88

$

181

Amounts available (attributable) to Tenet Healthcare Corporation common shareholders

Income from continuing operations, net of tax

$

94

$

88

$

182

Loss from discontinued operations, net of tax

(1)

-

(1)

Net income available to Tenet Healthcare Corporation common shareholders

$

93

$

88

$

181

Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common

shareholders:

Basic

Continuing operations

$

0.90

$

0.84

$

1.74

Discontinued operations

(0.01)

-

(0.01)

$

0.89

$

0.84

$

1.73

Diluted

Continuing operations

$

0.89

$

0.83

$

1.72

Discontinued operations

(0.01)

-

(0.01)

$

0.88

$

0.83

$

1.71

Weighted average shares and dilutive securities outstanding (in thousands):

Basic

104,353

104,794

104,574

Diluted

105,733

105,578

105,656

Page 3

TENET HEALTHCARE CORPORATION

Consolidated Statements of Operations

(Unaudited)

(Dollars in millions except per share amounts)

Three Months Ended

Year

Ended

3/31/2019

6/30/2019

9/30/2019

12/31/2019

12/31/2019

Net operating revenues

$

4,545

$

4,560

$

4,568

$

4,806

$

18,479

Equity in earnings of unconsolidated affiliates

34

42

38

61

175

Operating expenses:

Salaries, wages and benefits

2,151

2,145

2,172

2,230

8,698

Supplies

741

753

760

803

3,057

Other operating expenses, net

1,065

1,035

1,036

1,035

4,171

Depreciation and amortization

208

214

205

223

850

Impairment and restructuring charges, and acquisition-related

19

36

46

84

185

costs

Litigation and investigation costs

13

18

84

26

141

Net losses on sales, consolidation and deconsolidation of facilities

1

1

1

12

15

Operating income

381

400

302

454

1,537

Interest expense

(251)

(247)

(244)

(243)

(985)

Other non-operating income (expense), net

1

(1)

(3)

(2)

(5)

Loss from early extinguishment of debt

(47)

-

(180)

-

(227)

Income (loss) from continuing operations, before income taxes

84

152

(125)

209

320

Income tax expense

(20)

(33)

(22)

(85)

(160)

Income (loss) from continuing operations, before discontinued

64

119

(147)

124

160

operations

Discontinued operations:

Income from operations

10

2

1

2

15

Income tax expense

(2)

-

-

(2)

(4)

Income from discontinued operations

8

2

1

-

11

Net income (loss)

72

121

(146)

124

171

Less: Net income available to noncontrolling interests

84

95

80

127

386

Net income available (loss attributable) to Tenet Healthcare

$

(12)

$

26

$

(226)

$

(3)

$

(215)

Corporation common shareholders

Amounts available (attributable) to Tenet Healthcare

Corporation common shareholders

Income (loss) from continuing operations, net of tax

$

(20)

$

24

$

(227)

$

(3)

$

(226)

Income from discontinued operations, net of tax

8

2

1

-

11

Net income available (loss attributable) to Tenet Healthcare

$

(12)

$

26

$

(226)

$

(3)

$

(215)

Corporation common shareholders

Earnings (loss) per share available (attributable) to Tenet Healthcare

Corporation common shareholders:

Basic

Continuing operations

$

(0.19)

$

0.23

$

(2.19)

$

(0.03)

$

(2.19)

Discontinued operations

0.08

0.02

0.01

-

0.11

$

(0.11)

$

0.25

$

(2.18)

$

(0.03)

$

(2.08)

Diluted

Continuing operations

$

(0.19)

$

0.23

$

(2.19)

$

(0.03)

$

(2.19)

Discontinued operations

0.08

0.02

0.01

-

0.11

$

(0.11)

$

0.25

$

(2.18)

$

(0.03)

$

(2.08)

Weighted average shares and dilutive securities outstanding (in

thousands):

Basic

102,788

103,198

103,558

104,048

103,398

Diluted

102,788

104,629

103,558

104,048

103,398

Page 4

HOSPITAL OPERATIONS AND OTHER SEGMENT

Same-Hospital Growth in Revenues and Volumes

3Q18

4Q18

FY

1Q19

2Q19

3Q19

4Q19

FY

1Q20

2Q20

2018

2019

Net Patient Revenue

6.0%

(1.3)%

3.6%

1.9%

5.7%

5.8%

5.2%

4.6%

(0.4)%

(20.2)%

Adjusted Admissions

0.3%

(0.8)%

-%

0.6%

2.2%

2.8%

1.9%

1.9%

(4.9)%

(27.3)%

Revenue Per Adjusted Admission (1)

5.7%

(0.6)%

3.6%

1.3%

3.4%

2.9%

3.2%

2.7%

4.7%

9.7%

Inpatient Admissions

(2.1)%

(2.7)%

(1.7)%

(0.1)%

3.3%

3.6%

2.6%

2.3%

(4.5)%

(20.3)%

Outpatient Visits

0.4%

(2.1)%

(0.9)%

(2.0)%

1.2%

1.6%

2.5%

0.9%

(4.2)%

(41.9)%

Footnotes and other notations:

(1) Revenue per adjusted admissions growth after implicit price concessions/bad debt expense.

Page 5

AMBULATORY CARE SEGMENT

Same-FacilitySystem-Wide Growth in Revenues and Volumes

3Q18

4Q18

FY

1Q19

2Q19

3Q19

4Q19

FY

1Q20

2Q20

2018

2019

Surgical (ASCs & Surgical Hospitals) (1)

Revenue

6.6%

3.7%

4.9%

4.2%

5.2%

6.9%

7.3%

6.0%

(1.6)%

(28.2)%

Cases

4.0%

1.1%

2.1%

2.8%

2.6%

4.4%

3.4%

3.3%

(8.5)%

(41.6)%

Revenue per case

2.5%

2.6%

2.7%

1.4%

2.5%

2.5%

3.8%

2.6%

7.6%

22.9%

Non-Surgical (Imaging & Urgent Care)

Revenue

9.4%

5.2%

9.9%

4.3%

8.0%

5.9%

10.2%

6.9%

(1.3)%

(27.1)%

Visits

6.6%

0.7%

5.4%

(1.8)%

4.2%

6.3%

9.7%

4.4%

1.8%

(20.9)%

Revenue per visit

2.5%

4.4%

4.2%

6.3%

3.6%

(0.4)%

0.5%

2.5%

(3.1)%

(7.9)%

Ambulatory Segment Total

Revenue

6.7%

3.8%

5.1%

4.2%

5.3%

6.9%

7.4%

6.1%

(1.5)%

(28.2)%

Cases

5.0%

0.9%

3.4%

0.9%

3.2%

5.1%

5.7%

3.7%

(4.3)%

(33.7)%

Revenue per case

1.6%

2.8%

1.6%

3.3%

2.0%

1.7%

1.6%

2.2%

2.9%

8.2%

Footnotes and other notations:

  1. Same-facilitysystem-wide includes the results of both consolidated and unconsolidated facilities. Revenue growth and revenue per case growth is presented after implicit price concessions/bad debt expense.

Page 6

AMBULATORY CARE SEGMENT

Growth in Revenues excluding Aspen, Adjusted EBITDA, Adjusted EBITDA less NCI

$ in millions

3Q18

4Q18

FY

1Q19

2Q19

3Q19

4Q19

FY

1Q20

2Q20

2018

2019

Net operating revenues

$502

$554

$2,085

$480

$524

$522

$632

$2,158

$490

$368

Less: Aspen

21

0

117

0

0

0

0

0

0

0

Net operating revenues excluding Aspen

$481

$554

$1,968

$480

$524

$522

$632

$2,158

$490

$368

Growth in net operating revenues excluding

12.9%

10.6%

11.4%

6.9%

8.3%

8.5%

14.1%

9.7%

2.1 % (29.8)%

Aspen

Equity in earnings of unconsolidated affiliates

$31

$49

$140

$31

$34

$37

$58

$160

$26

$35

Adjusted EBITDA

$184

$245

$792

$177

$207

$207

$304

$895

$156

$167

Less: Aspen

2

0

16

0

0

0

0

0

0

0

Adjusted EBITDA excluding Aspen

$182

$245

$776

$177

$207

$207

$304

$895

$156

$167

Growth in Adjusted EBITDA excluding

18.2%

12.4%

15.0%

12.0%

8.4%

13.7%

24.1%

15.3%

(11.9)% (19.3)%

Aspen

Adjusted EBITDA margin excluding Aspen

37.8%

44.2%

39.4%

36.9%

39.5%

39.7%

48.1%

41.5%

31.8 %

45.4 %

Net income available to facility-level

$68

$94

$288

$65

$75

$73

$114

$327

$56

$61

noncontrolling interests (1)

Less: Aspen

0

0

0

0

0

0

0

0

0

0

Net income available to facility-level NCI

$68

$94

$288

$65

$75

$73

$114

$327

$56

$61

excluding Aspen

Adjusted EBITDA less facility-level NCI

$114

$151

$488

$112

$132

$134

$190

$568

$100

$106

excluding Aspen

Growth in Adjusted EBITDA less facility-

15.2%

7.1%

12.7%

9.8%

9.1%

17.5%

25.8%

16.4%

(10.7)% (19.7)%

level NCI excluding Aspen

Net income available to Baylor and WCAS (2)(3)

$2

$5

$20

$3

$3

$4

$4

$14

$1

$2

Adjusted EBITDA less NCI (after Baylor and

$112

$146

$468

$109

$129

$130

$186

$554

$99

$104

WCAS-related NCI)

Growth in Adjusted EBITDA less NCI (after

20.4%

11.5%

18.2%

16.0%

11.2%

16.1%

27.4%

18.4%

(9.2)% (19.4)%

Baylor and WCAS-related NCI) (3)

Footnotes:

  1. Represents facility level noncontrolling interest expense prior to Tenet recording additional NCI expense related to Baylor University Medical Center's (Baylor) 5% ownership interest in USPI and Welsh, Carson, Anderson & Stowe's (WCAS) FY 2018 ownership in the USPI joint venture.
  2. The amount labeled as net income available to Baylor and WCAS represents noncontrolling interest expense for FY 2019 and 1Q20 and 2Q20 related to Baylor's and, for FY 2018, Baylor's and WCAS's ownership interest in the USPI joint venture; neither Tenet nor USPI intend to make cash distributions to Baylor.
  3. (i) During 3Q19, Baylor-related NCI was less than $1 million but would have been $4 million excluding charges not included in Adjusted EBITDA; (ii) the growth rate for 4Q18 compares to Baylor and WCAS-related NCI of $10 million in 4Q17 (versus actual of $33 million) since the $10 million excludes gains and charges not included in Adjusted EBITDA, primarily $22 million related to the reduction of USPI's deferred tax liabilities as a result of the reduction in the corporate tax rate; (iii) the growth rate for FY 2018 compares to Baylor and WCAS-related NCI of $37 million (versus actual of $60 million) since the $37 million excludes gains and charges not included in Adjusted EBITDA.

Page 7

BUSINESS SEGMENTS

Revenues and EBITDA by Quarter

$ in millions

3Q18

4Q18

FY

1Q19

2Q19

3Q19

4Q19

FY

1Q20

2Q20

2018

2019

HOSPITAL OPERATIONS

AND OTHER

Net operating revenues (1)

$3,754

$3,843

$15,271

$3,862

$3,826

$3,850

$3,983

$15,521

$3,834

$3,088

EBITDA

$307

$359

$1,401

$347

$359

$342

$401

$1,449

$342

$492

EBITDA margin

8.2 %

9.3 %

9.2 %

9.0 %

9.4 %

8.9 %

10.1 %

9.3 %

8.9 %

15.9 %

AMBULATORY CARE

Net operating revenues (1)

$502

$554

$2,085

$480

$524

$522

$632

$2,158

$490

$368

EBITDA

$184

$245

$792

$177

$207

$207

$304

$895

$156

$167

EBITDA margin

36.7%

44.2%

38.0%

36.9%

39.5%

39.7%

48.1%

41.5%

31.8 %

45.4 %

CONIFER

Net operating revenues (1)

$371

$372

$1,533

$349

$355

$336

$332

$1,372

$332

$305

Percent from Tenet

39.4 % 40.3 %

38.5 %

41.8 %

41.1 %

41.7 % 42.5 %

41.8 %

41.0 %

37.0 %

Percent from other clients

60.6 %

59.7 %

61.5 %

58.2 %

58.9 %

58.3 %

57.5 %

58.2 %

59.0 %

63.0 %

EBITDA

$81

$87

$357

$99

$103

$90

$94

$386

$87

$73

EBITDA margin

21.8%

23.4%

23.3%

28.4%

29.0%

26.8%

28.3%

28.1%

26.2 %

23.9 %

Less: Inter-segment

$(146)

$(150)

$(590)

$(146)

$(146)

$(140)

$(141)

$(573)

$(136)

$(113)

eliminations from revenue

TOTAL, as reported in

each period

Net operating revenues (1)

$4,481

$4,619

$18,299

$4,545

$4,559

$4,568

$4,806

$18,478

$4,520

$3,648

EBITDA

$572

$691

$2,550

$623

$669

$639

$799

$2,730

$585

$732

EBITDA margin

12.8 %

15.0 %

13.9 %

13.7 %

14.7 %

14.0 %

16.6 %

14.8 %

12.9 %

20.1 %

Footnotes:

(1) Net operating revenues after implicit price concessions/bad debt.

Page 8

AMBULATORY CARE SEGMENT

STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in millions)

Three Months Ended June 30,

2020

2019

Ambulatory

Ambulatory

Care as

Reported

Unconsolidated

Care as

Unconsolidated

Under

Reported

GAAP

Affiliates

Under GAAP

Affiliates

Net operating revenues(1)

$

368

$

468

$

524

$

619

Grant income

37

49

-

-

Equity in earnings of unconsolidated affiliates(2)

35

1

34

-

Operating expenses:

Salaries, wages and benefits

119

124

157

156

Supplies

79

122

108

161

Other operating expenses, net

75

106

86

131

Depreciation and amortization

20

21

18

22

Litigation and investigation costs

(3)

-

-

-

Impairment and restructuring charges, and acquisition-

7

-

2

-

related costs

Net losses on sales, consolidation and deconsolidation of

-

-

2

-

facilities

Operating income

143

145

185

149

Interest expense

(31)

(5)

(32)

(6)

Other non-operating income, net

4

-

3

-

Income from continuing operations, before income

116

140

156

143

taxes

Income tax expense

(15)

(2)

(20)

(2)

Net income

101

$

138

136

$

141

Less: Net income available to noncontrolling interests

63

78

Net income available to Tenet Healthcare Corporation

$

38

$

58

common shareholders

Equity in earnings of unconsolidated affiliates

$

35

$

34

Footnotes:

  1. On a same-facilitysystem-wide basis, net revenue in Tenet's Ambulatory Care segment decreased 28.2% during the three months ended June 30, 2020, with cases decreasing 33.7% and revenue per case increasing 8.2%.
  2. At June 30, 2020, 107 of the 350 facilities in the Company's Ambulatory segment were not consolidated based on the nature of the segment's joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment's unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company's overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. We control our remaining 243 facilities and account for these investments as consolidated subsidiaries.

Page 9

AMBULATORY CARE SEGMENT

STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in millions)

Six Months Ended June 30,

2020

2019

Ambulatory

Ambulatory

Care as

Reported

Unconsolidated

Care as

Unconsolidated

Under

Reported

GAAP

Affiliates

Under GAAP

Affiliates

Net operating revenues(1)

$

858

$

1,034

$

1,004

$

1,187

Grant income

37

49

-

-

Equity in earnings of unconsolidated affiliates(2)

61

1

65

-

Operating expenses:

Salaries, wages and benefits

281

276

310

303

Supplies

191

273

207

310

Other operating expenses, net

161

232

168

257

Depreciation and amortization

39

41

36

42

Litigation and investigation costs

(3)

-

-

-

Impairment and restructuring charges, and acquisition-

31

-

5

-

related costs

Net losses (gains) on sales, consolidation and

(11)

-

(3)

(26)

deconsolidation of facilities

Operating income

267

262

346

301

Interest expense

(62)

(11)

(63)

(13)

Other non-operating income, net

8

-

6

6

Income from continuing operations, before income

213

251

289

294

taxes

Income tax expense

(27)

(4)

(35)

(4)

Net Income

186

$

247

254

$

290

Less: Net income available to noncontrolling interests

120

146

Net income available to Tenet Healthcare Corporation

$

66

$

108

common shareholders

Equity in earnings of unconsolidated affiliates

$

61

$

65

Footnotes:

  1. On a same-facilitysystem-wide basis, net revenue in Tenet's Ambulatory Care segment decreased 15.4% during the six months ended June 2020, with cases decreasing 19.3% and revenue per case increasing 4.8%.
  2. At June 30, 2020, 107 of the 350 facilities in the Company's Ambulatory segment were not consolidated based on the nature of the segment's joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment's unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company's overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. We control our remaining 243 facilities and account for these investments as consolidated subsidiaries.

Page 10

Six Months Ended June 30,
2020 2019 Change
(Unaudited)
Three Months Ended June 30,
2020 2019 Change
HOSPITAL OPERATIONS AND OTHER SEGMENT
Selected Statistics
Continuing Total Hospitals(1)

(Dollars in millions except per adjusted patient day and per adjusted admission amounts)

Admissions, Patient Days and Surgeries

65

65

-

*

65

65

- *

Number of hospitals (at end of period)

Total admissions

134,898

169,352

(20.3)%

300,633

344,078

(12.6)%

Adjusted patient admissions

221,159

304,066

(27.3)%

512,071

612,199

(16.4)%

Paying admissions (excludes charity and uninsured)

125,792

159,128

(20.9)%

281,612

323,921

(13.1)%

Charity and uninsured admissions

9,106

10,224

(10.9)%

19,021

20,157

(5.6)%

Admissions through emergency department

98,193

121,088

(18.9)%

220,484

247,167

(10.8)%

Paying admissions as a percentage of total admissions

93.2 %

94.0 %

(0.8)% *

93.7 %

94.1 %

(0.4)% *

Charity and uninsured admissions as a percentage of

6.8 %

6.0 %

0.8 % *

6.3 %

5.9 %

0.4 % *

total admissions

Emergency department admissions as a percentage of

72.8 %

71.5 %

1.3 % *

73.3 %

71.8 %

1.5 % *

total admissions

Surgeries - inpatient

34,973

44,641

(21.7)%

76,935

89,436

(14.0)%

Surgeries - outpatient

38,749

60,936

(36.4)%

92,139

119,154

(22.7)%

Total surgeries

73,722

105,577

(30.2)%

169,074

208,590

(18.9)%

Patient days - total

687,883

787,582

(12.7)%

1,498,362

1,609,661

(6.9)%

Adjusted patient days

1,094,208

1,387,929

(21.2)%

2,479,971

2,808,099

(11.7)%

Average length of stay (days)

5.10

4.65

9.7 %

4.98

4.68

6.4 %

Licensed beds (at end of period)

17,219

17,221

- %

17,219

17,221

- %

Average licensed beds

17,219

17,221

- %

17,219

17,338

(0.7)%

Utilization of licensed beds

43.9 %

50.3 %

(6.4)% *

47.8 %

51.3 %

(3.5)% *

Outpatient Visits

983,321

1,693,805

(41.9)%

2,599,848

3,408,197

(23.7)%

Total visits

Paying visits (excludes charity and uninsured)

908,197

1,581,530

(42.6)%

2,407,735

3,185,242

(24.4)%

Charity and uninsured visits

75,124

112,275

(33.1)%

192,113

222,955

(13.8)%

Emergency department visits

388,038

637,107

(39.1)%

1,029,320

1,294,556

(20.5)%

Paying visits as a percentage of total visits

92.4 %

93.4 %

(1.0)% *

92.6 %

93.5 %

(0.9)% *

Charity and uninsured visits as a percentage of total

7.6 %

6.6 %

1.0 % *

7.4 %

6.5 %

0.9 % *

visits

Total emergency department admissions and visits

486,231

758,195

(35.9)%

1,249,804

1,541,723

(18.9)%

Revenues

Net patient service revenues(2)

$

2,829

$

3,547

(20.2)%

$

6,369

$

7,129

(10.7)%

Revenues Per Adjusted Patient Admission and Per

Adjusted Patient Day Basis

Net patient service revenue(2) per adjusted patient

$

12,792

$

11,665

9.7 %

$

12,438

$

11,645

6.8 %

admission

Net patient service revenue(2) per adjusted patient day

$

2,585

$

2,556

1.1 %

$

2,568

$

2,539

1.1 %

Total selected operating expenses (salaries, wages

and benefits, supplies and other operating expenses)

per adjusted patient admission

$

13,354

$

10,947

22.0 %

$

12,326

$

10,946

12.6 %

Net patient service revenues(2) from:

21.1 %

20.3 %

0.8 % *

20.4 %

20.7 %

(0.3)% *

Medicare

Medicaid

9.2 %

8.9 %

0.3 % *

8.5 %

8.9 %

(0.4)% *

Managed care

64.5 %

65.7 %

(1.2)% *

65.1 %

65.7 %

(0.6)% *

Uninsured

0.8 %

0.3 %

0.5 % *

1.0 %

0.2 %

0.8 % *

Indemnity and other

4.4 %

4.8 %

(0.4)% *

5.0 %

4.5 %

0.5 % *

Footnotes and other notations:

  1. Represents the consolidated results of Tenet's acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.
  2. Less implicit price concessions/bad debt expense.

* This change is the difference between the 2020 and 2019 amounts shown.

Page 11

21.1 %
9.2 %
64.5 %
0.8 %
4.4 %

HOSPITAL OPERATIONS AND OTHER SEGMENT

Selected Statistics

Continuing Total Hospitals(1)

(Unaudited)

Three Months Ended

(Dollars in millions except per adjusted patient day and per adjusted admission amounts)

3/31/2020

6/30/2020

Admissions, Patient Days and Surgeries

65

65

Number of hospitals (at end of period)

Total admissions

165,735

134,898

Adjusted patient admissions

290,912

221,159

Paying admissions (excludes charity and uninsured)

155,820

125,792

Charity and uninsured admissions

9,915

9,106

Admissions through emergency department

122,291

98,193

Paying admissions as a percentage of total admissions

94.0 %

93.2 %

Charity and uninsured admissions as a percentage of total admissions

6.0 %

6.8 %

Emergency department admissions as a percentage of total admissions

73.8 %

72.8 %

Surgeries - inpatient

41,962

34,973

Surgeries - outpatient

53,390

38,749

Total surgeries

95,352

73,722

Patient days - total

810,479

687,883

Adjusted patient days

1,385,763

1,094,208

Average length of stay (days)

4.89

5.10

Licensed beds (at end of period)

17,219

17,219

Average licensed beds

17,218

17,219

Utilization of licensed beds

51.7 %

43.9 %

Outpatient Visits

1,616,527

983,321

Total visits

Paying visits (excludes charity and uninsured)

1,499,538

908,197

Charity and uninsured visits

116,989

75,124

Emergency department visits

641,282

388,038

Paying visits as a percentage of total visits

92.8 %

92.4 %

Charity and uninsured visits as a percentage of total visits

7.2 %

7.6 %

Total emergency department admissions and visits

763,573

486,231

Revenues

Net patient service revenues(2)

$

3,540

$

2,829

Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis

$

12,169

$

12,792

Net patient service revenue(2) per adjusted patient admission

Net patient service revenue(2) per adjusted patient day

$

2,555

$

2,585

Total selected operating expenses (salaries, wages and benefits, supplies and other operating

$

11,544

$

13,354

expenses) per adjusted patient admission

Net patient service revenues(2) from:

19.9 %

Medicare

Medicaid

7.9 %

Managed care

65.6 %

Uninsured

1.1 %

Indemnity and other

5.5 %

Footnotes:

  1. Represents the consolidated results of Tenet's acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.

(2) Less implicit price concessions/bad debt expense.

Page 12

Page 13
21.2 %
8.8 %
65.7 %
- % 4.3 %
20.3 %
8.9 %
65.7 %
0.3 %
4.8 %
19.6 %
8.0 %
66.1 %
1.2 %
5.1 %
19.4 %
7.6 %
67.4 %
1.0 %
4.6 %
$ 10,993
$ 10,947
$ 10,945
$ 11,231
$ 11,988 $ 2,635
$ 11,633 $ 2,581
$ 11,665 $ 2,556
$ 11,625 $ 2,522
$ 3,673
$ 3,566
$ 3,547
$ 3,582
1,714,392
1,603,712
110,680
657,449
93.5 %
6.5 %
783,528
1,693,805
1,581,530
112,275
637,107
93.4 %
6.6 %
758,195
1,673,801
1,562,007
111,794
627,055
93.3 %
6.7 %
747,970
1,700,696
1,586,704
113,992
645,791
93.3 %
6.7 %
768,130
71.5 %
44,641
60,936
105,577
787,582
1,387,929
4.65
17,221
17,221
50.3 %
72.2 %
44,795
58,218
103,013
822,079
1,420,170
4.70
17,221
17,455
52.3 %
71.1 %
45,637
60,099
105,736
782,643
1,381,862
4.60
17,206
17,208
49.4 %
71.6 %
45,109
61,290
106,399
796,239
1,394,191
4.66
17,210
17,211
50.3 %
6.0 %
5.7 %
6.3 %
6.2 %
65
169,352
304,066
159,128
10,224
121,088
94.0 %
65
174,726
308,133
164,793
9,933
126,079
94.3 %
65
170,004
306,535
159,299
10,705
120,915
93.7 %
65
170,815
306,384
160,244
10,571
122,339
93.8 %
3/31/2019
6/30/2019
9/30/2019
12/31/2019
(Dollars in millions except per adjusted patient day and per adjusted admission amounts)
Admissions, Patient Days and Surgeries Number of hospitals (at end of period) Total admissions
Adjusted patient admissions
Paying admissions (excludes charity and uninsured) Charity and uninsured admissions
Admissions through emergency department
Paying admissions as a percentage of total admissions
Charity and uninsured admissions as a percentage of total admissions
Emergency department admissions as a percentage of total admissions
Surgeries - inpatient Surgeries - outpatient Total surgeries Patient days - total Adjusted patient days Average length of stay (days) Licensed beds (at end of period) Average licensed beds Utilization of licensed beds
Outpatient Visits Total visits
Paying visits (excludes charity and uninsured) Charity and uninsured visits
Emergency department visits
Paying visits as a percentage of total visits
Charity and uninsured visits as a percentage of total visits Total emergency department admissions and visits
Revenues
Net patient service revenues(2)
Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis
Net patient service revenue(2) per adjusted patient admission
Net patient service revenue(2) per adjusted patient day
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission
Net patient service revenues(2) from: Medicare
Medicaid Managed care Uninsured
Indemnity and other Footnotes:
(1) Represents the consolidated results of Tenet's acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.
(2) Less implicit price concessions/bad debt expense.
HOSPITAL OPERATIONS AND OTHER SEGMENT
Selected Statistics
Continuing Total Hospitals(1)
(Unaudited)
Three Months Ended
(0.2)% *
(0.4)% *
(0.7)% *
0.8 % *
0.5 % *
6.8 %
1.1 %
0.4 % *
Six Months Ended June 30,
2020 2019 Change
(Unaudited)
Three Months Ended June 30,
2020 2019 Change
HOSPITAL OPERATIONS AND OTHER SEGMENT
Selected Statistics
Continuing Same Hospitals(1)

(Dollars in millions except per adjusted patient day and per adjusted admission amounts)

Admissions, Patient Days and Surgeries

65

65

-

*

65

65

- *

Number of hospitals (at end of period)

Total admissions

134,898

169,352

(20.3)%

300,633

342,822

(12.3)%

Adjusted patient admissions

221,159

304,066

(27.3)%

512,071

609,937

(16.0)%

Paying admissions (excludes charity and uninsured)

125,792

159,129

(20.9)%

281,612

322,761

(12.7)%

Charity and uninsured admissions

9,106

10,223

(10.9)%

19,021

20,061

(5.2)%

Admissions through emergency department

98,193

121,088

(18.9)%

220,484

246,316

(10.5)%

Paying admissions as a percentage of total admissions

93.2 %

94.0 %

(0.8)% *

93.7 %

94.1 %

(0.4)% *

Charity and uninsured admissions as a percentage of

6.8 %

6.0 %

0.8 % *

6.3 %

5.9 %

total admissions

Emergency department admissions as a percentage of

72.8 %

71.5 %

1.3 % *

73.3 %

71.8 %

1.5 % *

total admissions

Surgeries - inpatient

34,973

44,641

(21.7)%

76,935

89,194

(13.7)%

Surgeries - outpatient

38,749

60,936

(36.4)%

92,139

118,832

(22.5)%

Total surgeries

73,722

105,577

(30.2)%

169,074

208,026

(18.7)%

Patient days - total

687,883

787,582

(12.7)%

1,498,362

1,602,911

(6.5)%

Adjusted patient days

1,094,208

1,387,929

(21.2)%

2,479,971

2,795,982

(11.3)%

Average length of stay (days)

5.10

4.65

9.7 %

4.98

4.68

6.4 %

Licensed beds (at end of period)

17,219

17,221

- %

17,219

17,221

- %

Average licensed beds

17,219

17,221

- %

17,219

17,221

- %

Utilization of licensed beds

43.9 %

50.3 %

(6.4)% *

47.8 %

51.4 %

(3.6)% *

Outpatient Visits

983,321

1,693,805

(41.9)%

2,599,848

3,380,669

(23.1)%

Total visits

Paying visits (excludes charity and uninsured)

908,197

1,581,555

(42.6)%

2,407,737

3,159,190

(23.8)%

Charity and uninsured visits

75,124

112,250

(33.1)%

192,111

221,479

(13.3)%

Emergency department visits

388,038

637,107

(39.1)%

1,029,320

1,288,959

(20.1)%

Paying visits as a percentage of total visits

92.4 %

93.4 %

(1.0)% *

92.6 %

93.4 %

(0.8)% *

Charity and uninsured visits as a percentage of total

7.6 %

6.6 %

1.0 % *

7.4 %

6.6 %

0.8 % *

visits

Total emergency department admissions and visits

486,231

758,195

(35.9)%

1,249,804

1,535,275

(18.6)%

Revenues

Net patient service revenues(2)

$

2,830

$

3,547

(20.2)%

$

6,372

$

7,104

(10.3)%

Revenues Per Adjusted Patient Admission and Per

Adjusted Patient Day Basis

Net patient service revenue(2) per adjusted patient

$

12,796

$

11,665

9.7 %

$

12,444

$

11,647

admission

Net patient service revenue(2) per adjusted patient day

$

2,586

$

2,556

1.2 %

$

2,569

$

2,541

Net patient service revenues(2) from:

Medicare

21.1 %

20.3 %

0.8 % *

20.4 %

20.6 %

Medicaid

9.1 %

8.9 %

0.2 % *

8.5 %

8.9 %

Managed care

64.5 %

65.7 %

(1.2)% *

65.1 %

65.8 %

Uninsured

0.8 %

0.3 %

0.5 % *

1.0 %

0.2 %

Indemnity and other

4.5 %

4.8 %

(0.3)% *

5.0 %

4.5 %

Footnotes and other notations:

(1) Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the six months ended June 2020 and 2019, and associated outpatient facilities but excludes the results of hospitals that Tenet divested since January 1, 2019.

(2) Less implicit price concessions/bad debt expense.

  • This change is the difference between the 2020 and 2019 amounts shown
    .

Page 14

Three Months Ended
3/31/2020 6/30/2020

HOSPITAL OPERATIONS AND OTHER SEGMENT

Selected Statistics

Continuing Same Hospitals(1)

(Unaudited)

(Dollars in millions except per adjusted patient day and per adjusted admission amounts)

Admissions, Patient Days and Surgeries

Number of hospitals (at end of period)

65

65

Total admissions

165,735

134,898

Adjusted patient admissions

290,912

221,159

Paying admissions (excludes charity and uninsured)

155,820

125,792

Charity and uninsured admissions

9,915

9,106

Admissions through emergency department

122,291

98,193

Paying admissions as a percentage of total admissions

94.0 %

93.2 %

Charity and uninsured admissions as a percentage of total admissions

6.0 %

6.8 %

Emergency department admissions as a percentage of total admissions

73.8 %

72.8 %

Surgeries - inpatient

41,962

34,973

Surgeries - outpatient

53,390

38,749

Total surgeries

95,352

73,722

Patient days - total

810,479

687,883

Adjusted patient days

1,385,763

1,094,208

Average length of stay (days)

4.89

5.10

Licensed beds (at end of period)

17,219

17,219

Average licensed beds

17,218

17,219

Utilization of licensed beds

51.7 %

43.9 %

Outpatient Visits

Total visits

1,616,527

983,321

Paying visits (excludes charity and uninsured)

1,499,540

908,197

Charity and uninsured visits

116,987

75,124

Emergency department visits

641,282

388,038

Paying visits as a percentage of total visits

92.8 %

92.4 %

Charity and uninsured visits as a percentage of total visits

7.2 %

7.6 %

Total emergency department admissions and visits

763,573

486,231

Revenues

Net patient service revenues(2)

$

3,542

$

2,830

Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis

$

12,176

$

12,796

Net patient service revenue(2) per adjusted patient admission

Net patient service revenue(2) per adjusted patient day

$

2,556

$

2,586

Net patient service revenues(2) from:

Medicare

19.9 %

21.1 %

Medicaid

7.9 %

9.1 %

Managed care

65.6 %

64.5 %

Uninsured

1.1 %

0.8 %

Indemnity and other

5.5 %

4.5 %

Footnotes:

  1. Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the six months ended June 2020 and 2019, and associated outpatient facilities but excludes the results of hospitals that Tenet divested since January 1, 2019.

(2) Less implicit price concessions/bad debt expense.

Page 15

HOSPITAL OPERATIONS AND OTHER SEGMENT

Selected Statistics

Continuing Same Hospitals(1)

(Unaudited)

(Dollars in millions except per adjusted patient day and

Three Months Ended

3/31/2019

6/30/2019

9/30/2019

12/31/2019

per adjusted admission amounts)

Admissions, Patient Days and Surgeries

Number of hospitals (at end of period)

65

65

65

65

Total admissions

173,470

169,352

170,004

170,815

Adjusted patient admissions

305,871

304,066

306,535

306,384

Paying admissions (excludes charity and uninsured)

163,632

159,129

159,300

160,242

Charity and uninsured admissions

9,838

10,223

10,704

10,573

Admissions through emergency department

125,228

121,088

120,915

122,339

Paying admissions as a percentage of total admissions

94.3 %

94.0 %

93.7 %

93.8 %

Charity and uninsured admissions as a percentage of total admissions

5.7 %

6.0 %

6.3 %

6.2 %

Emergency department admissions as a percentage of total admissions

72.2 %

71.5 %

71.1 %

71.6 %

Surgeries - inpatient

44,553

44,641

45,637

45,109

Surgeries - outpatient

57,896

60,936

60,099

61,290

Total surgeries

102,449

105,577

105,736

106,399

Patient days - total

815,329

787,582

782,643

796,239

Adjusted patient days

1,408,053

1,387,929

1,381,862

1,394,191

Average length of stay (days)

4.70

4.65

4.60

4.66

Licensed beds (at end of period)

17,221

17,221

17,206

17,210

Average licensed beds

17,221

17,221

17,208

17,211

Utilization of licensed beds

52.6 %

50.3 %

49.4 %

50.3 %

Outpatient Visits

Total visits

1,686,864

1,693,805

1,673,801

1,700,696

Paying visits (excludes charity and uninsured)

1,577,635

1,581,555

1,562,010

1,586,707

Charity and uninsured visits

109,229

112,250

111,791

113,989

Emergency department visits

651,852

637,107

627,055

645,791

Paying visits as a percentage of total visits

93.5 %

93.4 %

93.3 %

93.3 %

Charity and uninsured visits as a percentage of total visits

6.5 %

6.6 %

6.7 %

6.7 %

Total emergency department admissions and visits

777,080

758,195

747,970

768,130

Revenues

Net patient service revenues(2)

$

3,557

$

3,547

$

3,562

$

3,673

Revenues Per Adjusted Patient Admission and Per Adjusted

Patient Day Basis

Net patient service revenue(2) per adjusted patient

$

11,629

$

11,665

$

11,620

$

11,988

admission

Net patient service revenue(2) per adjusted patient day

$

2,526

$

2,556

$

2,578

$

2,635

Net patient service revenues(2) from:

Medicare

21.0 %

20.3 %

19.5 %

19.4 %

Medicaid

8.8 %

8.9 %

8.0 %

7.6 %

Managed care

65.9 %

65.7 %

66.2 %

67.4 %

Uninsured

- %

0.3 %

1.2 %

1.0 %

Indemnity and other

4.3 %

4.8 %

5.1 %

4.6 %

Footnotes:

  1. Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the six months ended June 2020 and 2019, and associated outpatient facilities but excludes the results of hospitals that Tenet divested since January 1, 2019.

(2) Less implicit price concessions/bad debt expense.

Page 16

UNCOMPENSATED CARE TRENDS

Revenue Recognition Accounting Rules and Uncompensated Care

  1. Effective January 1, 2018, Tenet adopted FASB ASU 2014-09 using a modified retrospective method of application. Under ASU 2014-09, the estimated uncollectible amounts due from uninsured and underinsured patients are now generally considered implicit price concessions that are a direct reduction to net operating revenues.

$ in millions

3Q18

4Q18

FY 2018

1Q19

2Q19

3Q19

4Q19

FY 2019

1Q20

2Q20

Net Revenue before bad debt and implicit

$4,848

$4,985

$19,731

$4,909

$4,892

$4,890

$5,102

$19,793

$4,880

$3,931

price concessions

Bad Debt Expense and implicit price

$359

$366

$1,418

$364

$332

$322

$296

$1,314

$360

$283

concessions

% of revenue before bad debt

7.4%

7.3%

7.2%

7.4%

6.8%

6.6%

5.8%

6.6%

7.4 %

7.2 %

% of adjusted revenue (1)

6.0%

5.9%

5.9%

6.0%

5.3%

5.2%

4.5%

5.2%

5.7 %

5.5 %

Charity Care Write-Offs

$211

$207

$852

$235

$281

$273

$281

$1,070

$306

$293

% of adjusted revenue (1)

3.5%

3.4%

3.5%

3.9%

4.5%

4.4%

4.3%

4.3%

4.9 %

5.7 %

Uninsured Discounts

$904

$971

$3,491

$937

$1,059

$1,068

$1,167

$4,231

$1,094

$915

% of adjusted revenue (1)

15.2%

15.8%

14.5%

15.4%

17.0%

17.1%

17.8%

16.9%

17.4 %

17.8 %

Uncompensated Care (2)

$1,474

$1,544

$5,761

$1,536

$1,672

$1,663

$1,744

$6,615

$1,760

$1,491

Uncompensated Care Percentage (3)

24.7%

25.1%

23.9%

25.3%

26.8%

26.7%

26.6%

26.4%

28.0 %

29.0 %

Footnotes:

  1. Adjusted Revenue equals the sum of: (a) Net operating revenues before provision for doubtful accounts and implicit price concessions, (b) Charity Care Write-Offs, and (c) Uninsured Discounts.
  2. Uncompensated Care equals the sum of: (a) Bad debt and implicit price concessions, (b) Charity Care Write-Offs, and (c) Uninsured Discounts.
  3. The Uncompensated Care Percentage equals: (a) Uncompensated Care, divided by (b) Adjusted Revenue.

Page 17

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #1 - Reconciliation of Net Income Available to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders for 2020

(Unaudited)

(Dollars in millions except per share amounts)

2020

1st Qtr

2nd Qtr

YTD

Net income available to Tenet Healthcare Corporation common shareholders

$

93

$

88

$

181

Net loss from discontinued operations

(1)

-

(1)

Net income from continuing operations

94

88

182

Less: Impairment and restructuring charges, and acquisition-related costs

(55)

(54)

(109)

Litigation and investigation costs

(2)

(2)

(4)

Net gains on sales, consolidation and deconsolidation of facilities

2

1

3

Loss from early extinguishment of debt

-

(4)

(4)

Loss from divested and closed businesses

-

-

-

Noncontrolling interest impact

-

-

-

Tax impact of above items

14

14

28

Adjusted net income available from continuing operations to common

$

135

$

133

$

268

shareholders

Diluted earnings (loss) per share from continuing operations

$

0.89

$

0.83

$

1.72

Less: Impairment and restructuring charges, and acquisition-related costs

(0.52)

(0.51)

(1.03)

Litigation and investigation costs

(0.02)

(0.02)

(0.04)

Net gains on sales, consolidation and deconsolidation of facilities

0.02

0.01

0.03

Loss from early extinguishment of debt

-

(0.04)

(0.04)

Loss from divested and closed businesses

-

-

-

Noncontrolling interest impact

-

-

-

Tax impact of above items

0.13

0.13

0.26

Adjusted diluted earnings per share from continuing operations

$

1.28

$

1.26

$

2.54

Weighted average basic shares outstanding (in thousands)

104,353

104,794

104,574

Weighted average dilutive shares outstanding (in thousands)

105,733

105,578

105,656

TENET HEALTHCARE CORPORATION

Page 18

Additional Supplemental Non-GAAP disclosures

Table #1 - Reconciliation of Net Income Available (Loss Attributable) to

Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available

from Continuing Operations to Common Shareholders for 2019

(Unaudited)

(Dollars in millions except per share amounts)

2019

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Total

Net income available (loss attributable) to Tenet Healthcare

$

(12)

$

26

$

(226)

$

(3)

$

(215)

Corporation common shareholders

Net income from discontinued operations

8

2

1

-

11

Net income (loss) from continuing operations

(20)

24

(227)

(3)

(226)

Less: Impairment and restructuring charges, and

(19)

(36)

(46)

(84)

(185)

acquisition-related costs

Litigation and investigation costs

(13)

(18)

(84)

(26)

(141)

Net losses on sales, consolidation and deconsolidation of

(1)

(1)

(1)

(12)

(15)

facilities

Loss from early extinguishment of debt

(47)

-

(180)

-

(227)

Loss from divested and closed businesses

(1)

-

(1)

-

(2)

Noncontrolling interest impact

-

-

4

-

4

Tax impact of above items

(2)

11

14

19

42

Adjusted net income available from continuing operations

$

63

$

68

$

67

$

100

$

298

to common shareholders

Diluted earnings (loss) per share from continuing

$

(0.19)

$

0.23

$

(2.19)

$

(0.03)

$

(2.19)

operations

Less: Impairment and restructuring charges, and

(0.18)

(0.34)

(0.44)

(0.79)

(1.76)

acquisition-related costs

Litigation and investigation costs

(0.12)

(0.17)

(0.80)

(0.25)

(1.34)

Net losses on sales, consolidation and deconsolidation of

(0.01)

(0.01)

(0.01)

(0.11)

(0.14)

facilities

Loss from early extinguishment of debt

(0.45)

-

(1.72)

-

(2.16)

Loss from divested and closed businesses

(0.01)

-

(0.01)

-

(0.02)

Noncontrolling interest impact

-

-

0.04

-

0.04

Tax impact of above items

(0.02)

0.10

0.13

0.18

0.40

Adjusted diluted earnings per share from continuing

$

0.60

$

0.65

$

0.64

$

0.95

$

2.84

operations

Weighted average basic shares outstanding

102,788

103,198

103,558

104,048

103,398

(in thousands)

Weighted average dilutive shares outstanding

104,541

104,629

104,582

105,666

104,855

(in thousands)

Page 19

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #2 - Reconciliation of Net Income Available to Tenet Healthcare Corporation

Common Shareholders to Adjusted EBITDA for 2020

(Unaudited)

(Dollars in millions)

2020

1st Qtr

2nd Qtr

YTD

Net income available to Tenet Healthcare Corporation common shareholders

$

93

$

88

181

Less: Net income available to noncontrolling interests

(66)

(81)

(147)

Loss from discontinued operations, net of tax

(1)

-

(1)

Income from continuing operations

160

169

329

Income tax benefit (expense)

75

(45)

30

Loss from early extinguishment of debt

-

(4)

(4)

Other non-operating income, net

1

2

3

Interest expense

(243)

(255)

(498)

Operating income

327

471

798

Litigation and investigation costs

(2)

(2)

(4)

Net gains on sales, consolidation and deconsolidation of facilities

2

1

3

Impairment and restructuring charges, and acquisition-related costs

(55)

(54)

(109)

Depreciation and amortization

(203)

(206)

(409)

Loss from divested and closed businesses

-

-

-

Adjusted EBITDA

$

585

$

732

$

1,317

Net operating revenues

$

4,520

$

3,648

$

8,168

Net income available to Tenet Healthcare Corporation common shareholders

2.1 %

2.4 %

2.2 %

as a % of net operating revenues

Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)

12.9 %

20.1 %

16.1 %

TENET HEALTHCARE CORPORATION

Page 20

Additional Supplemental Non-GAAP disclosures

Table #2 - Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare

Corporation Common Shareholders to Adjusted EBITDA for 2019

(Unaudited)

(Dollars in millions)

2019

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Total

Net income available (loss attributable) to Tenet Healthcare

$

(12)

$

26

$

(226)

$

(3)

$

(215)

Corporation common shareholders

Less: Net income available to noncontrolling interests

(84)

(95)

(80)

(127)

(386)

Income from discontinued operations, net of tax

8

2

1

-

11

Income (loss) from continuing operations

64

119

(147)

124

160

Income tax expense

(20)

(33)

(22)

(85)

(160)

Loss from early extinguishment of debt

(47)

-

(180)

-

(227)

Other non-operating income (expense), net

1

(1)

(3)

(2)

(5)

Interest expense

(251)

(247)

(244)

(243)

(985)

Operating income

381

400

302

454

1,537

Litigation and investigation costs

(13)

(18)

(84)

(26)

(141)

Net losses on sales, consolidation and deconsolidation of

(1)

(1)

(1)

(12)

(15)

facilities

Impairment and restructuring charges, and acquisition-

(19)

(36)

(46)

(84)

(185)

related costs

Depreciation and amortization

(208)

(214)

(205)

(223)

(850)

Loss from divested and closed businesses

(1)

-

(1)

-

(2)

Adjusted EBITDA

$

623

$

669

$

639

$

799

$

2,730

Net operating revenues

$

4,545

$

4,560

$

4,568

$

4,806

$

18,479

Less: Net operating revenues from health plans

-

1

-

-

1

Adjusted net operating revenues

$

4,545

$

4,559

$

4,568

$

4,806

$

18,478

Net income available (loss attributable) to Tenet Healthcare

Corporation common shareholders as a % of net

(0.3)%

0.6 %

(4.9)%

(0.1)%

(1.2)%

operating revenues

Adjusted EBITDA as a % of adjusted net operating

13.7 %

14.7 %

14.0 %

16.6 %

14.8 %

revenues (Adjusted EBITDA margin)

Page 21

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #3 - Reconciliations of Net Cash Provided By Operating Activities to Free Cash Flow

and Adjusted Free Cash Flow from Continuing Operations

(Unaudited)

(Dollars in millions)

2020

1st Qtr

2nd Qtr

YTD

Net cash provided by operating activities

$

129

$

2,239

$

2,368

Purchases of property and equipment

(182)

(106)

(288)

Free cash flow

$

(53)

$

2,133

$

2,080

Net cash used in investing activities

$

(204)

$

(85)

$

(289)

Net cash provided by financing activities

$

426

$

747

$

1,173

Net cash provided by operating activities

$

129

$

2,239

$

2,368

Less: Payments for restructuring charges, acquisition-related costs, and litigation

(68)

(46)

(114)

costs and settlements

Net cash used in operating activities from discontinued operations

-

-

-

Adjusted net cash provided by operating activities from continuing operations

197

2,285

2,482

Purchases of property and equipment

(182)

(106)

(288)

Adjusted free cash flow - continuing operations

$

15

$

2,179

$

2,194

(Dollars in millions)

2019

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Total

Net cash provided by operating activities

$

10

$

284

$

419

$

520

$

1,233

Purchases of property and equipment

(192)

(144)

(156)

(178)

(670)

Free cash flow

$

(182)

$

140

$

263

$

342

$

563

Net cash used in investing activities

$

(139)

$

(164)

$

(123)

$

(193)

$

(619)

Net cash used in financing activities

$

(30)

$

(123)

$

(231)

$

(379)

$

(763)

Net cash provided by operating activities

$

10

$

284

$

419

$

520

$

1,233

Less: Payments for restructuring charges, acquisition-

(32)

(48)

(56)

(56)

(192)

related costs, and litigation costs and settlements

Net cash provided by (used in) operating activities from

(2)

(3)

1

(1)

(5)

discontinued operations

Adjusted net cash provided by operating activities from

44

335

474

577

1,430

continuing operations

Purchases of property and equipment

(192)

(144)

(156)

(178)

(670)

Adjusted free cash flow - continuing operations

$

(148)

$

191

$

318

$

399

$

760

Page 22

Non-GAAP Financial Measures

  • Adjusted EBITDA, a non-GAAP measure, is defined by the Company as net income available (loss attributable) to Tenet common shareholders before (1) the cumulative effect of changes in accounting principles, (2) net loss attributable (income available) to noncontrolling interests, (3) income (loss) from discontinued operations, (4) income tax expense (benefit), (5) gain (loss) from early extinguishment of debt, (6) other non- operating income (expense), net, (7) interest expense, (8) litigation and investigation (costs) benefits, net of reinsurance recoveries, (9) net gains (losses) on sales, consolidation and deconsolidation of facilities, (10) impairment and restructuring charges and acquisition-related costs, (11) depreciation and amortization and (12) income (loss) from divested and closed businesses. Litigation and investigation costs excluded do not include ordinary course of business malpractice and other litigation and related expenses.
  • Adjusted diluted earnings (loss) per share from continuing operations per share, a non-GAAP measure, is defined by the Company as Adjusted net income available (loss attributable) from continuing operations to Tenet common shareholders, divided by the weighted average primary or diluted shares outstanding in the reporting period.
  • Adjusted net income (loss attributable) from continuing operations to Tenet common shareholders, a non-GAAP measure, is defined by the Company as net income available (loss attributable) to Tenet common shareholders before (1) income (loss) from discontinued operations, (2) gain (loss) from early extinguishment of debt, (3) litigation and investigation (costs) benefits, net of reinsurance recoveries, (4) net gains (losses) on sales, consolidation and deconsolidation of facilities, (5) impairment and restructuring charges and acquisition-related costs, (6) income (loss) from divested and closed businesses and (7) the associated impact of these items on taxes and noncontrolling interests. Litigation and investigation costs excluded do not include ordinary course of business malpractice and other litigation and related expenses.
  • Free Cash Flow, a non-GAAP measure, is defined by the Company as (1) net cash provided by (used in) operating activities, less (2) purchases of property and equipment for continuing operations.
  • Adjusted Free Cash Flow, a non-GAAP measure, is defined by the Company as (1) Adjusted net cash provided by (used in) operating activities from continuing operations, less (2) purchases of property and equipment from continuing operations.
  • Adjusted net cash provided by (used in) operating activities, a non-GAAP measure, is defined by the Company as cash provided by (used in) operating activities prior to (1) payments for restructuring charges, acquisition-related costs and litigation costs and settlement, and (2) net cash provided (used in) operating activities for discontinued operations.

The Company believes the foregoing non-GAAP measures are useful to investors and analysts because they present additional information on the Company's financial performance. Investors, analysts, Company management and the Company's Board of Directors utilize these non-GAAP measures, in addition to GAAP measures, to track the Company's financial and operating performance and compare the Company's performance to its peer companies, which use similar non-GAAP financial measures in their presentations and earnings releases. The Human Resources Committee of the Company's Board of Directors also uses certain of these measures to evaluate management's performance for the purpose of determining incentive compensation. Additional information regarding the purpose and utility of specific non-GAAP measures used in this release is set forth below.

The Company believes that Adjusted EBITDA is a useful measure, in part, because certain investors and analysts use both historical and projected Adjusted EBITDA, in addition to other GAAP and non-GAAP measures, as factors in determining the estimated fair value of shares of the Company's common stock. Company management also regularly reviews the Adjusted EBITDA performance for each operating segment. The Company does not use Adjusted EBITDA to measure liquidity, but instead to measure operating performance.

The Company uses, and believes investors use, Free Cash Flow and Adjusted Free Cash Flow as supplemental non-GAAP measures to analyze cash flows generated from the Company's operations. The Company believes these measures are useful to investors in evaluating its ability to fund distributions paid to noncontrolling interests or for acquisitions, purchasing equity interests in joint ventures or repaying debt.

These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Because these measures exclude many items that are included in the Company's financial statements, they do not provide a complete measure of the Company's operating performance. For example, the Company's definitions of Free Cash Flow and Adjusted Free Cash Flow do not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company's Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, (ii) distributions paid to noncontrolling interests, or (iii) payments under the Put/Call Agreement for USPI redeemable noncontrolling interest, which are recorded on the Statement of Cash Flows as the purchase of noncontrolling interest. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company's financial performance.

Page 23

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Tenet Healthcare Corporation published this content on 03 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2020 16:41:02 UTC