(State of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | Description | |||||||
99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
TENET HEALTHCARE CORPORATION | ||||||||
Date: | By: | /s/ R. SCOTT RAMSEY | ||||||
R. Scott Ramsey | ||||||||
Senior Vice President, Controller |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
($ in millions, except per share results) | 2022 | 2021 | 2022 | 2021 | ||||||||||
Net operating revenues | $4,801 | $4,894 | $14,184 | $14,629 | ||||||||||
Net income available to Tenet common shareholders from continuing operations | $131 | $448 | $308 | $665 | ||||||||||
Net income available to Tenet common shareholders from continuing operations per diluted share | $1.16 | $4.12 | $2.81 | $6.13 | ||||||||||
Adjusted EBITDA1 | $841 | $855 | $2,572 | $2,466 | ||||||||||
Adjusted diluted earnings per share from continuing operations1 | $1.44 | $1.99 | $4.86 | $4.88 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
Ambulatory segment results ($ in millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||
Revenues | ||||||||||||||
Net operating revenues | $806 | $666 | $2,315 | $1,976 | ||||||||||
Same-facility system-wide net patient service revenues2 | $1,536 | $1,491 | $4,474 | $4,263 | ||||||||||
Volume Changes versus the Prior-Year Period | ||||||||||||||
Same-facility system-wide surgical cases2 | —% | 6.8% | 2.4% | 20.4% | ||||||||||
Same-facility system-wide surgical cases on same-business day basis2 | —% | 6.8% | 1.9% | 21.0% | ||||||||||
Adjusted EBITDA, Margins and Noncontrolling Interest (NCI) | ||||||||||||||
Adjusted EBITDA | $319 | $274 | $920 | $826 | ||||||||||
Adjusted EBITDA margin | 39.6% | 41.1% | 39.7% | 41.8% | ||||||||||
Adjusted EBITDA less facility-level NCI | $208 | $178 | $605 | $534 | ||||||||||
Adjusted EBITDA less total NCI | $208 | $173 | $596 | $520 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
Hospital segment results ($ in millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||
Revenues | ||||||||||||||
Net operating revenues (prior to inter-segment eliminations) | $3,778 | $4,030 | $11,221 | $12,072 | ||||||||||
Grant income | $54 | $2 | $150 | $30 | ||||||||||
Same-hospital net patient service revenues3 | $3,425 | $3,599 | $10,217 | $10,498 | ||||||||||
Same-Hospital Volume Changes versus the Prior-Year Period | ||||||||||||||
Admissions | (5.3)% | 2.6% | (6.1)% | 1.1% | ||||||||||
Adjusted admissions4 | (0.7)% | 4.4% | (2.5)% | 3.2% | ||||||||||
Outpatient visits (including outpatient ER visits) | (6.9)% | 15.3% | (5.5)% | 18.1% | ||||||||||
Emergency Room visits (inpatient and outpatient) | (4.1)% | 25.0% | 3.8% | 6.5% | ||||||||||
Hospital surgeries | (3.6)% | 1.0% | (4.1)% | 8.8% | ||||||||||
Adjusted EBITDA | ||||||||||||||
Adjusted EBITDA | $432 | $496 | $1,377 | $1,379 | ||||||||||
Adjusted EBITDA margin | 11.4% | 12.3% | 12.3% | 11.4% |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
Conifer segment results ($ in millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||
Net operating revenues | $333 | $314 | $990 | $943 | ||||||||||
Adjusted EBITDA | $90 | $85 | $275 | $261 | ||||||||||
Adjusted EBITDA margin | 27.0% | 27.1% | 27.8% | 27.7% |
CONSOLIDATED ($ in millions except per share amounts) | FY 2022 Outlook | Fourth Quarter 2022 Outlook | |||||||||
Net operating revenues | $19,000 to $19,200 | $4,816 to $5,016 | |||||||||
Income from continuing operations available to Tenet common stockholders | $366 to $441 | $58 to $133 | |||||||||
Adjusted EBITDA | $3,375 to $3,475 | $803 to $903 | |||||||||
Adjusted EBITDA margin | 17.8% to 18.1% | 16.7% to 18.0% | |||||||||
Diluted income per common share from continuing operations | $3.34 to $4.02 | $0.51 to $1.19 | |||||||||
Adjusted net income from continuing operations | $650 to $710 | $112 to $172 | |||||||||
Adjusted diluted earnings per share from continuing operations | $5.88 to $6.42 | $1.00 to $1.54 | |||||||||
Equity in earnings of unconsolidated affiliates | $215 to $235 | $64 to $84 | |||||||||
Depreciation and amortization | $840 to $860 | $212 to $232 | |||||||||
Interest expense | $885 to $895 | $214 to $224 | |||||||||
Net income available to NCI | $580 to $600 | $162 to $182 | |||||||||
Weighted average diluted common shares | ~112 million | ~111 million | |||||||||
NCI cash distributions | $550 to $570 | ||||||||||
Effective tax rate5 | ~25% | ||||||||||
Net cash provided by operating activities | $1,025 to $1,300 | ||||||||||
Adjusted net cash provided by operating activities | $1,250 to $1,500 | ||||||||||
Capital expenditures | $725 to $775 | ||||||||||
Free cash flow | $300 to $525 | ||||||||||
Free cash flow excluding repayments of Medicare Advance Payments and Deferred Payroll Tax Payments | $1,308 to $1,533 | ||||||||||
Adjusted free cash flow – continuing operations | $525 to $725 | ||||||||||
Adjusted free cash flow – continuing operations, excluding repayments of Medicare Advance Payments and Deferred Payroll Tax Payments | $1,533 to $1,733 |
Ambulatory Segment ($ in millions) | FY 2022 Outlook | |||||||
Net operating revenues | $3,200 to $3,250 | |||||||
Adjusted EBITDA | $1,310 to $1,340 | |||||||
Total NCI (Facility level and Baylor University Medical Center through June 30, 2022) | $465 to $475 | |||||||
Adjusted EBITDA less total NCI | $845 to $865 | |||||||
Changes versus prior year6: | ||||||||
Surgical cases volumes | Up 2.0% to 3.0% | |||||||
Net revenues per surgical case | Up 2.5% to 3.0% |
Hospital Segment ($ in millions) | FY 2022 Outlook | |||||||
Net operating revenues (prior to inter-segment eliminations) | $14,955 to $15,075 | |||||||
Adjusted EBITDA | $1,705 to $1,765 | |||||||
NCI | $40 to $45 | |||||||
Changes versus prior year6: | ||||||||
Inpatient admissions | (5.5)% to (4.5)% | |||||||
Adjusted admissions | (2.5)% to (1.5)% |
Conifer Segment ($ in millions) | FY 2022 Outlook | |||||||
Net operating revenues | $1,310 to $1,340 | |||||||
Adjusted EBITDA | $360 to $370 | |||||||
NCI | $75 to $80 | |||||||
Investor Contact | Media Contact | |||||||
Will McDowell | Robert Dyer | |||||||
469-893-2387 | 469-893-2640 | |||||||
william.mcdowell@tenethealth.com | mediarelations@tenethealth.com |
(Dollars in millions except per share amounts) | Three Months Ended September 30, | |||||||||||||||||||||||||||||||
2022 | % | 2021 | % | Change | ||||||||||||||||||||||||||||
Net operating revenues | $ | 4,801 | 100.0 | % | $ | 4,894 | 100.0 | % | (1.9) | % | ||||||||||||||||||||||
Grant income | 54 | 1.1 | % | 3 | 0.1 | % | 1,700.0 | % | ||||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | 51 | 1.1 | % | 45 | 0.9 | % | 13.3 | % | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Salaries, wages and benefits | 2,230 | 46.4 | % | 2,209 | 45.1 | % | 1.0 | % | ||||||||||||||||||||||||
Supplies | 817 | 17.0 | % | 827 | 16.9 | % | (1.2) | % | ||||||||||||||||||||||||
Other operating expenses, net | 1,018 | 21.3 | % | 1,051 | 21.5 | % | (3.1) | % | ||||||||||||||||||||||||
Depreciation and amortization | 209 | 4.4 | % | 209 | 4.3 | % | ||||||||||||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs | 24 | 0.5 | % | 15 | 0.3 | % | ||||||||||||||||||||||||||
Litigation and investigation costs | 12 | 0.2 | % | 29 | 0.6 | % | ||||||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | — | % | (412) | (8.4) | % | ||||||||||||||||||||||||||
Operating income | 596 | 12.4 | % | 1,014 | 20.7 | % | ||||||||||||||||||||||||||
Interest expense | (222) | (227) | ||||||||||||||||||||||||||||||
Other non-operating income, net | 6 | 7 | ||||||||||||||||||||||||||||||
Loss from early extinguishment of debt | — | (20) | ||||||||||||||||||||||||||||||
Income from continuing operations, before income taxes | 380 | 774 | ||||||||||||||||||||||||||||||
Income tax expense | (112) | (197) | ||||||||||||||||||||||||||||||
Income from continuing operations, before discontinued operations | 268 | 577 | ||||||||||||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||||
Income from operations | — | 1 | ||||||||||||||||||||||||||||||
Income from discontinued operations | — | 1 | ||||||||||||||||||||||||||||||
Net income | 268 | 578 | ||||||||||||||||||||||||||||||
Less: Net income available to noncontrolling interests | 137 | 129 | ||||||||||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 131 | $ | 449 | ||||||||||||||||||||||||||||
Amounts available to Tenet Healthcare Corporation common shareholders | ||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 131 | $ | 448 | ||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | — | 1 | ||||||||||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 131 | $ | 449 | ||||||||||||||||||||||||||||
Earnings per share available to Tenet Healthcare Corporation common shareholders: | ||||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.21 | $ | 4.18 | ||||||||||||||||||||||||||||
Discontinued operations | — | 0.01 | ||||||||||||||||||||||||||||||
$ | 1.21 | $ | 4.19 | |||||||||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.16 | $ | 4.12 | ||||||||||||||||||||||||||||
Discontinued operations | — | 0.01 | ||||||||||||||||||||||||||||||
$ | 1.16 | $ | 4.13 | |||||||||||||||||||||||||||||
Weighted average shares and dilutive securities outstanding (in thousands): | ||||||||||||||||||||||||||||||||
Basic | 107,923 | 107,050 | ||||||||||||||||||||||||||||||
Diluted | 109,888 | 108,761 |
(Dollars in millions except per share amounts) | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2022 | % | 2021 | % | Change | ||||||||||||||||||||||||||||
Net operating revenues | $ | 14,184 | 100.0 | % | $ | 14,629 | 100.0 | % | (3.0) | % | ||||||||||||||||||||||
Grant income | 154 | 1.1 | % | 53 | 0.4 | % | 190.6 | % | ||||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | 151 | 1.1 | % | 141 | 1.0 | % | 7.1 | % | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Salaries, wages and benefits | 6,538 | 46.1 | % | 6,690 | 45.8 | % | (2.3) | % | ||||||||||||||||||||||||
Supplies | 2,413 | 17.0 | % | 2,490 | 17.0 | % | (3.1) | % | ||||||||||||||||||||||||
Other operating expenses, net | 2,966 | 20.9 | % | 3,177 | 21.7 | % | (6.6) | % | ||||||||||||||||||||||||
Depreciation and amortization | 628 | 4.4 | % | 654 | 4.5 | % | ||||||||||||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs | 97 | 0.7 | % | 55 | 0.4 | % | ||||||||||||||||||||||||||
Litigation and investigation costs | 50 | 0.4 | % | 64 | 0.4 | % | ||||||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | — | % | (427) | (2.9) | % | ||||||||||||||||||||||||||
Operating income | 1,797 | 12.7 | % | 2,120 | 14.5 | % | ||||||||||||||||||||||||||
Interest expense | (671) | (702) | ||||||||||||||||||||||||||||||
Other non-operating income, net | 6 | 16 | ||||||||||||||||||||||||||||||
Loss from early extinguishment of debt | (109) | (74) | ||||||||||||||||||||||||||||||
Income from continuing operations, before income taxes | 1,023 | 1,360 | ||||||||||||||||||||||||||||||
Income tax expense | (297) | (303) | ||||||||||||||||||||||||||||||
Income from continuing operations, before discontinued operations | 726 | 1,057 | ||||||||||||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||||
Income from operations | 1 | — | ||||||||||||||||||||||||||||||
Income from discontinued operations | 1 | — | ||||||||||||||||||||||||||||||
Net income | 727 | 1,057 | ||||||||||||||||||||||||||||||
Less: Net income available to noncontrolling interests | 418 | 392 | ||||||||||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 309 | $ | 665 | ||||||||||||||||||||||||||||
Amounts available to Tenet Healthcare Corporation common shareholders | ||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 308 | $ | 665 | ||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | 1 | — | ||||||||||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 309 | $ | 665 | ||||||||||||||||||||||||||||
Earnings per share available to Tenet Healthcare Corporation common shareholders: | ||||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 2.86 | $ | 6.23 | ||||||||||||||||||||||||||||
Discontinued operations | 0.01 | — | ||||||||||||||||||||||||||||||
$ | 2.87 | $ | 6.23 | |||||||||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 2.81 | $ | 6.13 | ||||||||||||||||||||||||||||
Discontinued operations | 0.01 | — | ||||||||||||||||||||||||||||||
$ | 2.82 | $ | 6.13 | |||||||||||||||||||||||||||||
Weighted average shares and dilutive securities outstanding (in thousands): | ||||||||||||||||||||||||||||||||
Basic | 107,732 | 106,727 | ||||||||||||||||||||||||||||||
Diluted | 112,288 | 108,465 |
September 30, | December 31, | |||||||||||||
(Dollars in millions) | 2022 | 2021 | ||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 1,208 | $ | 2,364 | ||||||||||
Accounts receivable | 2,826 | 2,770 | ||||||||||||
Inventories of supplies, at cost | 394 | 384 | ||||||||||||
Income tax receivable | 4 | — | ||||||||||||
Other current assets | 1,566 | 1,557 | ||||||||||||
Total current assets | 5,998 | 7,075 | ||||||||||||
Investments and other assets | 3,312 | 3,254 | ||||||||||||
Deferred income taxes | 55 | 65 | ||||||||||||
Property and equipment, at cost, less accumulated depreciation and amortization | 6,291 | 6,427 | ||||||||||||
Goodwill | 9,979 | 9,261 | ||||||||||||
Other intangible assets, at cost, less accumulated amortization | 1,441 | 1,497 | ||||||||||||
Total assets | $ | 27,076 | $ | 27,579 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Current portion of long-term debt | $ | 131 | $ | 135 | ||||||||||
Accounts payable | 1,240 | 1,300 | ||||||||||||
Accrued compensation and benefits | 781 | 896 | ||||||||||||
Professional and general liability reserves | 279 | 254 | ||||||||||||
Accrued interest payable | 249 | 203 | ||||||||||||
Contract liabilities | 111 | 959 | ||||||||||||
Other current liabilities | 1,485 | 1,362 | ||||||||||||
Total current liabilities | 4,276 | 5,109 | ||||||||||||
Long-term debt, net of current portion | 14,962 | 15,511 | ||||||||||||
Professional and general liability reserves | 804 | 791 | ||||||||||||
Defined benefit plan obligations | 400 | 421 | ||||||||||||
Deferred income taxes | 235 | 36 | ||||||||||||
Contract liabilities – long-term | 14 | 15 | ||||||||||||
Other long-term liabilities | 1,810 | 1,439 | ||||||||||||
Total liabilities | 22,501 | 23,322 | ||||||||||||
Commitments and contingencies | ||||||||||||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | 2,068 | 2,203 | ||||||||||||
Equity: | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock | 8 | 8 | ||||||||||||
Additional paid-in capital | 4,771 | 4,877 | ||||||||||||
Accumulated other comprehensive loss | (229) | (233) | ||||||||||||
Accumulated deficit | (905) | (1,214) | ||||||||||||
Common stock in treasury, at cost | (2,410) | (2,410) | ||||||||||||
Total shareholders’ equity | 1,235 | 1,028 | ||||||||||||
Noncontrolling interests | 1,272 | 1,026 | ||||||||||||
Total equity | 2,507 | 2,054 | ||||||||||||
Total liabilities and equity | $ | 27,076 | $ | 27,579 |
Nine Months Ended | ||||||||||||||
(Dollars in millions) | September 30, | |||||||||||||
2022 | 2021 | |||||||||||||
Net income | $ | 727 | $ | 1,057 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 628 | 654 | ||||||||||||
Deferred income tax expense | 208 | 183 | ||||||||||||
Stock-based compensation expense | 47 | 43 | ||||||||||||
Impairment and restructuring charges, and acquisition-related costs | 97 | 55 | ||||||||||||
Litigation and investigation costs | 50 | 64 | ||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | (427) | ||||||||||||
Loss from early extinguishment of debt | 109 | 74 | ||||||||||||
Equity in earnings of unconsolidated affiliates, net of distributions received | 14 | 10 | ||||||||||||
Amortization of debt discount and debt issuance costs | 23 | 25 | ||||||||||||
Pre-tax income from discontinued operations | (1) | — | ||||||||||||
Net gains from the sale of investments and long-lived assets | (115) | (16) | ||||||||||||
Other items, net | 12 | (7) | ||||||||||||
Changes in cash from operating assets and liabilities: | ||||||||||||||
Accounts receivable | (39) | (202) | ||||||||||||
Inventories and other current assets | 89 | (111) | ||||||||||||
Income taxes | (59) | 67 | ||||||||||||
Accounts payable, accrued expenses, contract liabilities and other current liabilities | (942) | (149) | ||||||||||||
Other long-term liabilities | (28) | 8 | ||||||||||||
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (157) | (116) | ||||||||||||
Net cash used in operating activities from discontinued operations, excluding income taxes | (1) | (1) | ||||||||||||
Net cash provided by operating activities | 662 | 1,211 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchases of property and equipment | (472) | (354) | ||||||||||||
Purchases of businesses or joint venture interests, net of cash acquired | (224) | (64) | ||||||||||||
Proceeds from sales of facilities and other assets | 209 | 1,235 | ||||||||||||
Proceeds from sales of marketable securities, long-term investments and other assets | 61 | 18 | ||||||||||||
Purchases of marketable securities and equity investments | (68) | (23) | ||||||||||||
Other items, net | (8) | (10) | ||||||||||||
Net cash provided by (used in) investing activities | (502) | 802 | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Repayments of borrowings | (2,786) | (3,183) | ||||||||||||
Proceeds from borrowings | 2,020 | 1,413 | ||||||||||||
Debt issuance costs | (24) | (15) | ||||||||||||
Distributions paid to noncontrolling interests | (432) | (316) | ||||||||||||
Proceeds from the sale of noncontrolling interests | 16 | 14 | ||||||||||||
Purchases of noncontrolling interests | (61) | (19) | ||||||||||||
Medicare advances and grants received by unconsolidated affiliates, net of recoupment | — | (8) | ||||||||||||
Other items, net | (49) | (53) | ||||||||||||
Net cash used in financing activities | (1,316) | (2,167) | ||||||||||||
Net decrease in cash and cash equivalents | (1,156) | (154) | ||||||||||||
Cash and cash equivalents at beginning of period | 2,364 | 2,446 | ||||||||||||
Cash and cash equivalents at end of period | $ | 1,208 | $ | 2,292 | ||||||||||
Supplemental disclosures: | ||||||||||||||
Interest paid, net of capitalized interest | $ | (601) | $ | (664) | ||||||||||
Income tax payments, net | $ | (148) | $ | (54) |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(Dollars in millions) | September 30, | September 30, | ||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Net operating revenues (1) : | ||||||||||||||||||||||||||
Ambulatory Care | $ | 806 | $ | 666 | $ | 2,315 | $ | 1,976 | ||||||||||||||||||
Hospital Operations and other (prior to inter-segment eliminations) | 3,778 | 4,030 | 11,221 | 12,072 | ||||||||||||||||||||||
Conifer | ||||||||||||||||||||||||||
Tenet | 116 | 116 | 342 | 362 | ||||||||||||||||||||||
Other clients | 217 | 198 | 648 | 581 | ||||||||||||||||||||||
Total Conifer revenues | 333 | 314 | 990 | 943 | ||||||||||||||||||||||
Inter-segment eliminations | (116) | (116) | (342) | (362) | ||||||||||||||||||||||
Total | $ | 4,801 | $ | 4,894 | $ | 14,184 | $ | 14,629 | ||||||||||||||||||
Equity in earnings of unconsolidated affiliates: | ||||||||||||||||||||||||||
Ambulatory Care | $ | 49 | $ | 43 | $ | 143 | $ | 130 | ||||||||||||||||||
Hospital Operations and other | 2 | 2 | 8 | 11 | ||||||||||||||||||||||
Total | $ | 51 | $ | 45 | $ | 151 | $ | 141 | ||||||||||||||||||
Adjusted EBITDA (including grant income): | ||||||||||||||||||||||||||
Ambulatory Care | $ | 319 | $ | 274 | $ | 920 | $ | 826 | ||||||||||||||||||
Hospital Operations and other | 432 | 496 | 1,377 | 1,379 | ||||||||||||||||||||||
Conifer | 90 | 85 | 275 | 261 | ||||||||||||||||||||||
Total | $ | 841 | $ | 855 | $ | 2,572 | $ | 2,466 | ||||||||||||||||||
Adjusted EBITDA margins (including grant income): | ||||||||||||||||||||||||||
Ambulatory Care | 39.6 | % | 41.1 | % | 39.7 | % | 41.8 | % | ||||||||||||||||||
Hospital Operations and other | 11.4 | % | 12.3 | % | 12.3 | % | 11.4 | % | ||||||||||||||||||
Conifer | 27.0 | % | 27.1 | % | 27.8 | % | 27.7 | % | ||||||||||||||||||
Total | 17.5 | % | 17.5 | % | 18.1 | % | 16.9 | % | ||||||||||||||||||
Adjusted EBITDA margins (excluding grant income): | ||||||||||||||||||||||||||
Ambulatory Care | 39.6 | % | 40.8 | % | 39.6 | % | 40.0 | % | ||||||||||||||||||
Hospital Operations and other | 10.0 | % | 12.3 | % | 10.9 | % | 11.2 | % | ||||||||||||||||||
Conifer | 27.0 | % | 27.1 | % | 27.8 | % | 27.7 | % | ||||||||||||||||||
Total | 16.4 | % | 17.4 | % | 17.0 | % | 16.4 | % | ||||||||||||||||||
Capital expenditures: | ||||||||||||||||||||||||||
Ambulatory Care | $ | 18 | $ | 14 | $ | 58 | $ | 49 | ||||||||||||||||||
Hospital Operations and other | 143 | 95 | 405 | 295 | ||||||||||||||||||||||
Conifer | 4 | 2 | 9 | 10 | ||||||||||||||||||||||
Total | $ | 165 | $ | 111 | $ | 472 | $ | 354 | ||||||||||||||||||
(1) Net operating revenues include the impact of implicit price concessions and bad debts | ||||||||||||||||||||||||||
(Dollars in millions except per share amounts) | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 131 | $ | 449 | $ | 309 | $ | 665 | ||||||||||||||||||
Net income from discontinued operations | — | 1 | 1 | — | ||||||||||||||||||||||
Net income from continuing operations | 131 | 448 | 308 | 665 | ||||||||||||||||||||||
Less: Impairment and restructuring charges, and acquisition-related costs | (24) | (15) | (97) | (55) | ||||||||||||||||||||||
Litigation and investigation costs | (12) | (29) | (50) | (64) | ||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | 412 | — | 427 | ||||||||||||||||||||||
Loss from early extinguishment of debt | — | (20) | (109) | (74) | ||||||||||||||||||||||
Tax impact of above items | 5 | (116) | 26 | (98) | ||||||||||||||||||||||
Adjusted net income available from continuing operations to common shareholders | $ | 162 | $ | 216 | $ | 538 | $ | 529 | ||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 1.16 | $ | 4.12 | $ | 2.81 | $ | 6.13 | ||||||||||||||||||
Less: Impairment and restructuring charges, and acquisition-related costs | (0.22) | (0.14) | (0.86) | (0.51) | ||||||||||||||||||||||
Litigation and investigation costs | (0.11) | (0.27) | (0.45) | (0.59) | ||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | 3.79 | — | 3.94 | ||||||||||||||||||||||
Loss from early extinguishment of debt | — | (0.18) | (0.97) | (0.68) | ||||||||||||||||||||||
Tax impact of above items | 0.05 | (1.07) | 0.23 | (0.91) | ||||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 1.44 | $ | 1.99 | $ | 4.86 | $ | 4.88 | ||||||||||||||||||
Weighted average basic shares outstanding (in thousands) | 107,923 | 107,050 | 107,732 | 106,727 | ||||||||||||||||||||||
Weighted average dilutive shares outstanding (in thousands) | 109,888 | 108,761 | 112,288 | 108,465 |
(Dollars in millions) | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 131 | $ | 449 | $ | 309 | $ | 665 | ||||||||||||||||||
Less: Net income available to noncontrolling interests | (137) | (129) | (418) | (392) | ||||||||||||||||||||||
Income from discontinued operations, net of tax | — | 1 | 1 | — | ||||||||||||||||||||||
Income from continuing operations | 268 | 577 | 726 | 1,057 | ||||||||||||||||||||||
Income tax expense | (112) | (197) | (297) | (303) | ||||||||||||||||||||||
Loss from early extinguishment of debt | — | (20) | (109) | (74) | ||||||||||||||||||||||
Other non-operating income, net | 6 | 7 | 6 | 16 | ||||||||||||||||||||||
Interest expense | (222) | (227) | (671) | (702) | ||||||||||||||||||||||
Operating income | 596 | 1,014 | 1,797 | 2,120 | ||||||||||||||||||||||
Litigation and investigation costs | (12) | (29) | (50) | (64) | ||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | 412 | — | 427 | ||||||||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs | (24) | (15) | (97) | (55) | ||||||||||||||||||||||
Depreciation and amortization | (209) | (209) | (628) | (654) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 841 | $ | 855 | $ | 2,572 | $ | 2,466 | ||||||||||||||||||
Net operating revenues | $ | 4,801 | $ | 4,894 | $ | 14,184 | $ | 14,629 | ||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues | 2.7 | % | 9.2 | % | 2.2 | % | 4.5 | % | ||||||||||||||||||
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin) | 17.5 | % | 17.5 | % | 18.1 | % | 16.9 | % | ||||||||||||||||||
(Dollars in millions) | 2022 | |||||||||||||
Q3 | YTD | |||||||||||||
Net cash provided by operating activities | $ | 315 | $ | 662 | ||||||||||
Purchases of property and equipment | (165) | (472) | ||||||||||||
Free cash flow | 150 | 190 | ||||||||||||
Add back: Medicare Advance Repayments | 405 | 880 | ||||||||||||
Free cash flow, excluding repayment of Medicare Advances | $ | 555 | $ | 1,070 | ||||||||||
Net cash used in investing activities | $ | (302) | $ | (502) | ||||||||||
Net cash used in financing activities | $ | (156) | $ | (1,316) | ||||||||||
Net cash provided by operating activities | $ | 315 | $ | 662 | ||||||||||
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (59) | (157) | ||||||||||||
Net cash used in operating activities from discontinued operations | (1) | (1) | ||||||||||||
Adjusted net cash provided by operating activities from continuing operations | 375 | 820 | ||||||||||||
Purchases of property and equipment | (165) | (472) | ||||||||||||
Adjusted free cash flow – continuing operations | 210 | 348 | ||||||||||||
Add back: Medicare Advance Repayments | 405 | 880 | ||||||||||||
Adjusted free cash flow – continuing operations, excluding repayments of Medicare Advances | $ | 615 | $ | 1,228 |
(Dollars in millions) | 2021 | |||||||||||||
Q3 | YTD | |||||||||||||
Net cash provided by operating activities | $ | 432 | $ | 1,211 | ||||||||||
Purchases of property and equipment | (111) | (354) | ||||||||||||
Free cash flow | 321 | 857 | ||||||||||||
Add back: Medicare Advance Repayments | 174 | 326 | ||||||||||||
Free cash flow, excluding repayment of Medicare Advances | $ | 495 | $ | 1,183 | ||||||||||
Net cash provided by investing activities | $ | 997 | $ | 802 | ||||||||||
Net cash used in financing activities | $ | (1,331) | $ | (2,167) | ||||||||||
Net cash provided by operating activities | $ | 432 | $ | 1,211 | ||||||||||
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (31) | (116) | ||||||||||||
Net cash used in operating activities from discontinued operations | (1) | (1) | ||||||||||||
Adjusted net cash provided by operating activities from continuing operations | 464 | 1,328 | ||||||||||||
Purchases of property and equipment | (111) | (354) | ||||||||||||
Adjusted free cash flow – continuing operations | 353 | 974 | ||||||||||||
Add back: Medicare Advance Repayments | 174 | 326 | ||||||||||||
Adjusted free cash flow – continuing operations, excluding repayments of Medicare Advances | $ | 527 | $ | 1,300 |
(Dollars in millions except per share amounts) | Fourth Quarter 2022 | FY 2022 | ||||||||||||||||||||||||
Low | High | Low | High | |||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 58 | $ | 133 | $ | 367 | $ | 442 | ||||||||||||||||||
Net income from discontinued operations, net of tax | — | — | 1 | 1 | ||||||||||||||||||||||
Net income from continuing operations | 58 | 133 | 366 | 441 | ||||||||||||||||||||||
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1) | (63) | (43) | (210) | (190) | ||||||||||||||||||||||
Loss from early extinguishment of debt(2) | — | — | (109) | (109) | ||||||||||||||||||||||
Tax impact of above items | 9 | 4 | 35 | 30 | ||||||||||||||||||||||
Adjusted net income available from continuing operations to common shareholders | $ | 112 | $ | 172 | $ | 650 | $ | 710 | ||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.51 | $ | 1.19 | $ | 3.34 | $ | 4.02 | ||||||||||||||||||
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements | (0.57) | (0.39) | (1.88) | (1.70) | ||||||||||||||||||||||
Loss from early extinguishment of debt | — | — | (0.97) | (0.97) | ||||||||||||||||||||||
Tax impact of above items | 0.08 | 0.04 | 0.31 | 0.27 | ||||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 1.00 | $ | 1.54 | $ | 5.88 | $ | 6.42 | ||||||||||||||||||
Weighted average basic shares outstanding (in thousands) | 108,000 | 108,000 | 108,000 | 108,000 | ||||||||||||||||||||||
Weighted average dilutive shares outstanding (in thousands) | 111,000 | 111,000 | 112,000 | 112,000 |
(Dollars in millions) | Fourth Quarter 2022 | FY 2022 | ||||||||||||||||||||||||
Low | High | Low | High | |||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 58 | $ | 133 | $ | 367 | $ | 442 | ||||||||||||||||||
Less: Net income available to noncontrolling interests | (162) | (182) | (580) | (600) | ||||||||||||||||||||||
Net income from discontinued operations, net of tax | — | — | 1 | 1 | ||||||||||||||||||||||
Income tax expense | (83) | (103) | (380) | (400) | ||||||||||||||||||||||
Interest expense | (224) | (214) | (895) | (885) | ||||||||||||||||||||||
Loss from early extinguishment of debt(1) | — | — | (109) | (109) | ||||||||||||||||||||||
Other non-operating income (expense), net | (1) | 4 | 5 | 10 | ||||||||||||||||||||||
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(2) | (63) | (43) | (210) | (190) | ||||||||||||||||||||||
Depreciation and amortization | (212) | (232) | (840) | (860) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 803 | $ | 903 | $ | 3,375 | $ | 3,475 | ||||||||||||||||||
Income from continuing operations | $ | 58 | $ | 133 | $ | 366 | $ | 441 | ||||||||||||||||||
Net operating revenues | $ | 4,816 | $ | 5,016 | $ | 19,000 | $ | 19,200 | ||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders as a % of operating revenues | 1.2 | % | 2.7 | % | 1.9 | % | 2.3 | % | ||||||||||||||||||
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin) | 16.7 | % | 18.0 | % | 17.8 | % | 18.1 | % |
(Dollars in millions) | FY 2022 | |||||||||||||||||||||||||||||||
Low | High | |||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 1,025 | $ | 1,300 | ||||||||||||||||||||||||||||
Purchases of property and equipment – continuing operations | (725) | (775) | ||||||||||||||||||||||||||||||
Free cash flow – continuing operations | 300 | 525 | ||||||||||||||||||||||||||||||
Add back: | ||||||||||||||||||||||||||||||||
Medicare Advance Repayments | 880 | 880 | ||||||||||||||||||||||||||||||
Payroll Tax Deferral Payments | 128 | 128 | ||||||||||||||||||||||||||||||
Free cash flow excluding repayments of Medicare Advances and Deferred Payroll Tax Payments | $ | 1,308 | $ | 1,533 | ||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 1,025 | $ | 1,300 | ||||||||||||||||||||||||||||
Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1) | (225) | (200) | ||||||||||||||||||||||||||||||
Adjusted net cash provided by operating activities – continuing operations | 1,250 | 1,500 | ||||||||||||||||||||||||||||||
Purchases of property and equipment – continuing operations | (725) | (775) | ||||||||||||||||||||||||||||||
Adjusted free cash flow – continuing operations(2) | 525 | 725 | ||||||||||||||||||||||||||||||
Add back: | ||||||||||||||||||||||||||||||||
Medicare Advance Repayments | 880 | 880 | ||||||||||||||||||||||||||||||
Payroll Tax Deferral Payments | 128 | 128 | ||||||||||||||||||||||||||||||
Adjusted free cash flow – continuing operations, excluding repayments of Medicare Advances and Deferred Payroll Tax Payments | $ | 1,533 | $ | 1,733 |
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