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: |
- 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:
- 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.
- 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.
- (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: |
- 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%.
- 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: |
- 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%.
- 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
(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:
- Represents the consolidated results of Tenet's acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.
- Less implicit price concessions/bad debt expense.
* This change is the difference between the 2020 and 2019 amounts shown.
Page 11
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: |
- 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
(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
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: |
- 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: |
- 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
- 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:
- 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.
- Uncompensated Care equals the sum of: (a) Bad debt and implicit price concessions, (b) Charity Care Write-Offs, and (c) Uninsured Discounts.
- 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