(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) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Net operating revenues | $5,066 | $4,801 | $15,169 | $14,184 | ||||||||||
Net income available to Tenet common shareholders from continuing operations | $101 | $131 | $367 | $308 | ||||||||||
Net income available to Tenet common shareholders from continuing operations per diluted share | $0.94 | $1.16 | $3.41 | $2.81 | ||||||||||
Adjusted EBITDA1 excluding grant income | $851 | $787 | $2,515 | $2,418 | ||||||||||
Adjusted EBITDA1 | $854 | $841 | $2,529 | $2,572 | ||||||||||
Adjusted diluted earnings per share from continuing operations1 | $1.44 | $1.42 | $4.30 | $4.80 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
Ambulatory segment results ($ in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Revenues | ||||||||||||||
Net operating revenues | $941 | $806 | $2,788 | $2,315 | ||||||||||
Same-facility system-wide net patient service revenues2 | $1,703 | $1,578 | $5,055 | $4,637 | ||||||||||
Volume Changes versus the Prior-Year Period | ||||||||||||||
Same-facility system-wide surgical cases2 | 4.1% | —% | 6.2% | 2.4% | ||||||||||
Same-facility system-wide surgical cases on same-business day basis2 | 5.8% | —% | 6.8% | 1.9% | ||||||||||
Adjusted EBITDA, Margins and Noncontrolling Interest (NCI) | ||||||||||||||
Adjusted EBITDA excluding grant income | $370 | $319 | $1,079 | $916 | ||||||||||
Adjusted EBITDA | $370 | $319 | $1,080 | $920 | ||||||||||
Adjusted EBITDA margin excluding grant income | 39.3% | 39.6% | 38.7% | 39.6% | ||||||||||
Adjusted EBITDA margin | 39.3% | 39.6% | 38.7% | 39.7% | ||||||||||
Adjusted EBITDA less facility-level NCI excluding grant income | $233 | $208 | $678 | $603 | ||||||||||
Adjusted EBITDA less facility-level NCI | $233 | $208 | $678 | $605 | ||||||||||
Adjusted EBITDA less total NCI excluding grant income | $233 | $208 | $678 | $594 | ||||||||||
Adjusted EBITDA less total NCI | $233 | $208 | $678 | $596 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
Hospital segment results ($ in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Revenues | ||||||||||||||
Net operating revenues (prior to inter-segment eliminations) | $3,919 | $3,778 | $11,740 | $11,221 | ||||||||||
Grant income | $3 | $54 | $13 | $150 | ||||||||||
Same-hospital net patient service revenues3 | $3,575 | $3,453 | $10,711 | $10,302 | ||||||||||
Same-Hospital Volume Changes versus the Prior-Year Period | ||||||||||||||
Admissions | 0.6% | (5.3)% | 2.6% | (6.1)% | ||||||||||
Adjusted admissions4 | 0.4% | (0.7)% | 3.3% | (2.5)% | ||||||||||
Outpatient visits (including outpatient ER visits) | (2.0)% | (6.9)% | (1.0)% | (5.5)% | ||||||||||
Emergency Room visits (inpatient and outpatient) | (0.9)% | (4.1)% | 1.3% | 3.8% | ||||||||||
Hospital surgeries | (0.7)% | (3.6)% | 0.5% | (4.1)% | ||||||||||
Adjusted EBITDA | ||||||||||||||
Adjusted EBITDA excluding grant income | $398 | $378 | $1,181 | $1,227 | ||||||||||
Adjusted EBITDA | $401 | $432 | $1,194 | $1,377 | ||||||||||
Adjusted EBITDA margin excluding grant income | 10.2% | 10.0% | 10.1% | 10.9% | ||||||||||
Adjusted EBITDA margin | 10.2% | 11.4% | 10.2% | 12.3% |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
Conifer segment results ($ in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Net operating revenues | $315 | $333 | $962 | $990 | ||||||||||
Adjusted EBITDA | $83 | $90 | $255 | $275 | ||||||||||
Adjusted EBITDA margin | 26.3% | 27.0% | 26.5% | 27.8% |
CONSOLIDATED ($ in millions, except per share amounts) | FY 2023 Outlook | Fourth Quarter 2023 Outlook | |||||||||
Net operating revenues | $20,300 to $20,500 | $5,131 to $5,331 | |||||||||
Net income from continuing operations available to Tenet common stockholders | $456 to $541 | $89 to $174 | |||||||||
Adjusted EBITDA | $3,365 to $3,465 | $836 to $936 | |||||||||
Adjusted EBITDA margin | 16.6% to 16.9% | 16.3% to 17.6% | |||||||||
Diluted income per common share from continuing operations | $4.25 to $5.06 | $0.83 to $1.64 | |||||||||
Adjusted net income from continuing operations | $580 to $645 | $119 to $184 | |||||||||
Adjusted diluted earnings per share from continuing operations | $5.43 to $6.05 | $1.12 to $1.74 | |||||||||
Equity in earnings of unconsolidated affiliates | $205 to $225 | $50 to $70 | |||||||||
Depreciation and amortization | $870 to $890 | $216 to $236 | |||||||||
Interest expense | $895 to $905 | $221 to $231 | |||||||||
Income tax expense5 | $320 to $335 | $77 to $92 | |||||||||
Net income available to NCI | $675 to $695 | $187 to $207 | |||||||||
Weighted average diluted common shares | ~105 million | ~105 million | |||||||||
NCI cash distributions | $565 to $605 | ||||||||||
Net cash provided by operating activities | $1,800 to $2,075 | ||||||||||
Adjusted net cash provided by operating activities | $1,950 to $2,200 | ||||||||||
Capital expenditures | $675 to $725 | ||||||||||
Free cash flow | $1,125 to $1,350 | ||||||||||
Adjusted free cash flow – continuing operations | $1,275 to $1,475 |
Ambulatory Segment ($ in millions) | FY 2023 Outlook | |||||||
Net operating revenues | $3,790 to $3,840 | |||||||
Adjusted EBITDA | $1,505 to $1,535 | |||||||
Total NCI (Facility level) | $560 to $570 | |||||||
Adjusted EBITDA less total NCI | $945 to $965 | |||||||
Changes versus prior year6: | ||||||||
Surgical cases volumes | Up 5.0% to 6.0% | |||||||
Net revenues per surgical case | Up 2.0% to 3.0% |
Hospital Segment ($ in millions) | FY 2023 Outlook | |||||||
Net operating revenues (prior to inter-segment eliminations) | $15,675 to $15,795 | |||||||
Adjusted EBITDA | $1,530 to $1,590 | |||||||
NCI | $25 to $30 | |||||||
Changes versus prior year6: | ||||||||
Inpatient admissions | Up 2.0% to 3.0% | |||||||
Adjusted admissions | Up 2.5% to 3.5% |
Conifer Segment ($ in millions) | FY 2023 Outlook | |||||||
Net operating revenues | $1,270 to $1,300 | |||||||
Adjusted EBITDA | $330 to $340 | |||||||
NCI | $90 to $95 | |||||||
Investor Contact | Media Contact | |||||||
Will McDowell | Robert Dyer | |||||||
469-893-2387 | 469-893-2640 | |||||||
william.mcdowell@tenethealth.com | mediarelations@tenethealth.com |
Description | Page | ||||
13 | |||||
(Dollars in millions, except per share amounts) | Three Months Ended September 30, | |||||||||||||||||||||||||||||||
2023 | % | 2022 | % | Change | ||||||||||||||||||||||||||||
Net operating revenues | $ | 5,066 | 100.0 | % | $ | 4,801 | 100.0 | % | 5.5 | % | ||||||||||||||||||||||
Grant income | 3 | 0.1 | % | 54 | 1.1 | % | (94.4) | % | ||||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | 51 | 1.0 | % | 51 | 1.1 | % | — | % | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Salaries, wages and benefits | 2,288 | 45.2 | % | 2,230 | 46.4 | % | 2.6 | % | ||||||||||||||||||||||||
Supplies | 877 | 17.3 | % | 817 | 17.0 | % | 7.3 | % | ||||||||||||||||||||||||
Other operating expenses, net | 1,101 | 21.7 | % | 1,018 | 21.3 | % | 8.2 | % | ||||||||||||||||||||||||
Depreciation and amortization | 224 | 4.5 | % | 209 | 4.4 | % | ||||||||||||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs | 47 | 0.9 | % | 24 | 0.5 | % | ||||||||||||||||||||||||||
Litigation and investigation costs | 14 | 0.3 | % | 12 | 0.2 | % | ||||||||||||||||||||||||||
Net losses on sales, consolidation and deconsolidation of facilities | 1 | — | % | — | — | % | ||||||||||||||||||||||||||
Operating income | 568 | 11.2 | % | 596 | 12.4 | % | ||||||||||||||||||||||||||
Interest expense | (227) | (222) | ||||||||||||||||||||||||||||||
Other non-operating income, net | 4 | 6 | ||||||||||||||||||||||||||||||
Income from continuing operations, before income taxes | 345 | 380 | ||||||||||||||||||||||||||||||
Income tax expense | (79) | (112) | ||||||||||||||||||||||||||||||
Net income | 266 | 268 | ||||||||||||||||||||||||||||||
Less: Net income available to noncontrolling interests | 165 | 137 | ||||||||||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 101 | $ | 131 | ||||||||||||||||||||||||||||
Earnings per share available to Tenet Healthcare Corporation common shareholders: | ||||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.99 | $ | 1.21 | ||||||||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.94 | $ | 1.16 | ||||||||||||||||||||||||||||
Weighted average shares and dilutive securities outstanding (in thousands): | ||||||||||||||||||||||||||||||||
Basic | 101,544 | 107,923 | ||||||||||||||||||||||||||||||
Diluted | 104,425 | 109,888 |
(Dollars in millions, except per share amounts) | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2023 | % | 2022 | % | Change | ||||||||||||||||||||||||||||
Net operating revenues | $ | 15,169 | 100.0 | % | $ | 14,184 | 100.0 | % | 6.9 | % | ||||||||||||||||||||||
Grant income | 14 | 0.1 | % | 154 | 1.1 | % | (90.9) | % | ||||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | 155 | 1.0 | % | 151 | 1.1 | % | 2.6 | % | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Salaries, wages and benefits | 6,831 | 45.0 | % | 6,538 | 46.1 | % | 4.5 | % | ||||||||||||||||||||||||
Supplies | 2,659 | 17.5 | % | 2,413 | 17.0 | % | 10.2 | % | ||||||||||||||||||||||||
Other operating expenses, net | 3,319 | 21.9 | % | 2,966 | 20.9 | % | 11.9 | % | ||||||||||||||||||||||||
Depreciation and amortization | 654 | 4.3 | % | 628 | 4.4 | % | ||||||||||||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs | 84 | 0.6 | % | 97 | 0.7 | % | ||||||||||||||||||||||||||
Litigation and investigation costs | 28 | 0.2 | % | 50 | 0.4 | % | ||||||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | (12) | (0.1) | % | — | — | % | ||||||||||||||||||||||||||
Operating income | 1,775 | 11.7 | % | 1,797 | 12.7 | % | ||||||||||||||||||||||||||
Interest expense | (674) | (671) | ||||||||||||||||||||||||||||||
Other non-operating income, net | 8 | 6 | ||||||||||||||||||||||||||||||
Loss from early extinguishment of debt | (11) | (109) | ||||||||||||||||||||||||||||||
Income from continuing operations, before income taxes | 1,098 | 1,023 | ||||||||||||||||||||||||||||||
Income tax expense | (243) | (297) | ||||||||||||||||||||||||||||||
Income from continuing operations, before discontinued operations | 855 | 726 | ||||||||||||||||||||||||||||||
Income from discontinued operations | — | 1 | ||||||||||||||||||||||||||||||
Net income | 855 | 727 | ||||||||||||||||||||||||||||||
Less: Net income available to noncontrolling interests | 488 | 418 | ||||||||||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 367 | $ | 309 | ||||||||||||||||||||||||||||
Amounts available to Tenet Healthcare Corporation common shareholders | ||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 367 | $ | 308 | ||||||||||||||||||||||||||||
Income from discontinued operations, net of tax | — | 1 | ||||||||||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 367 | $ | 309 | ||||||||||||||||||||||||||||
Earnings per share available to Tenet Healthcare Corporation common shareholders: | ||||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 3.60 | $ | 2.86 | ||||||||||||||||||||||||||||
Discontinued operations | — | 0.01 | ||||||||||||||||||||||||||||||
$ | 3.60 | $ | 2.87 | |||||||||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 3.41 | $ | 2.81 | ||||||||||||||||||||||||||||
Discontinued operations | — | 0.01 | ||||||||||||||||||||||||||||||
$ | 3.41 | $ | 2.82 | |||||||||||||||||||||||||||||
Weighted average shares and dilutive securities outstanding (in thousands): | ||||||||||||||||||||||||||||||||
Basic | 101,869 | 107,732 | ||||||||||||||||||||||||||||||
Diluted | 105,021 | 112,288 |
(Dollars in millions) | September 30, | December 31, | ||||||||||||
2023 | 2022 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 1,054 | $ | 858 | ||||||||||
Accounts receivable | 2,897 | 2,943 | ||||||||||||
Inventories of supplies, at cost | 413 | 405 | ||||||||||||
Assets held for sale | 140 | — | ||||||||||||
Other current assets | 1,855 | 1,775 | ||||||||||||
Total current assets | 6,359 | 5,981 | ||||||||||||
Investments and other assets | 3,152 | 3,147 | ||||||||||||
Deferred income taxes | 4 | 19 | ||||||||||||
Property and equipment, at cost, less accumulated depreciation and amortization | 6,260 | 6,462 | ||||||||||||
Goodwill | 10,415 | 10,123 | ||||||||||||
Other intangible assets, at cost, less accumulated amortization | 1,400 | 1,424 | ||||||||||||
Total assets | $ | 27,590 | $ | 27,156 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Current portion of long-term debt | $ | 141 | $ | 145 | ||||||||||
Accounts payable | 1,202 | 1,504 | ||||||||||||
Accrued compensation and benefits | 787 | 778 | ||||||||||||
Professional and general liability reserves | 264 | 255 | ||||||||||||
Accrued interest payable | 273 | 213 | ||||||||||||
Liabilities held for sale | 17 | — | ||||||||||||
Contract liabilities | 86 | 110 | ||||||||||||
Other current liabilities | 1,662 | 1,471 | ||||||||||||
Total current liabilities | 4,432 | 4,476 | ||||||||||||
Long-term debt, net of current portion | 14,901 | 14,934 | ||||||||||||
Professional and general liability reserves | 787 | 790 | ||||||||||||
Defined benefit plan obligations | 327 | 331 | ||||||||||||
Deferred income taxes | 278 | 217 | ||||||||||||
Other long-term liabilities | 1,684 | 1,800 | ||||||||||||
Total liabilities | 22,409 | 22,548 | ||||||||||||
Commitments and contingencies | ||||||||||||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | 2,303 | 2,149 | ||||||||||||
Equity: | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock | 8 | 8 | ||||||||||||
Additional paid-in capital | 4,818 | 4,778 | ||||||||||||
Accumulated other comprehensive loss | (176) | (181) | ||||||||||||
Accumulated deficit | (436) | (803) | ||||||||||||
Common stock in treasury, at cost | (2,750) | (2,660) | ||||||||||||
Total shareholders’ equity | 1,464 | 1,142 | ||||||||||||
Noncontrolling interests | 1,414 | 1,317 | ||||||||||||
Total equity | 2,878 | 2,459 | ||||||||||||
Total liabilities and equity | $ | 27,590 | $ | 27,156 |
(Dollars in millions) | Nine Months Ended | |||||||||||||
September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net income | $ | 855 | $ | 727 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 654 | 628 | ||||||||||||
Deferred income tax expense | 75 | 208 | ||||||||||||
Stock-based compensation expense | 48 | 47 | ||||||||||||
Impairment and restructuring charges, and acquisition-related costs | 84 | 97 | ||||||||||||
Litigation and investigation costs | 28 | 50 | ||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | (12) | — | ||||||||||||
Loss from early extinguishment of debt | 11 | 109 | ||||||||||||
Equity in earnings of unconsolidated affiliates, net of distributions received | 5 | 14 | ||||||||||||
Amortization of debt discount and debt issuance costs | 25 | 23 | ||||||||||||
Pre-tax income from discontinued operations | — | (1) | ||||||||||||
Net gains from the sale of investments and long-lived assets | (25) | (115) | ||||||||||||
Other items, net | (1) | 12 | ||||||||||||
Changes in cash from operating assets and liabilities: | ||||||||||||||
Accounts receivable | 31 | (39) | ||||||||||||
Inventories and other current assets | (49) | 89 | ||||||||||||
Income taxes | (46) | (59) | ||||||||||||
Accounts payable, accrued expenses, contract liabilities and other current liabilities | (38) | (942) | ||||||||||||
Other long-term liabilities | 10 | (28) | ||||||||||||
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (105) | (157) | ||||||||||||
Net cash used in operating activities from discontinued operations, excluding income taxes | — | (1) | ||||||||||||
Net cash provided by operating activities | 1,550 | 662 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchases of property and equipment | (543) | (472) | ||||||||||||
Purchases of businesses or joint venture interests, net of cash acquired | (110) | (224) | ||||||||||||
Proceeds from sales of facilities and other assets | 38 | 209 | ||||||||||||
Proceeds from sales of marketable securities, long-term investments and other assets | 40 | 61 | ||||||||||||
Purchases of marketable securities and equity investments | (54) | (68) | ||||||||||||
Other items, net | (7) | (8) | ||||||||||||
Net cash used in investing activities | (636) | (502) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Repayments of borrowings | (1,478) | (2,786) | ||||||||||||
Proceeds from borrowings | 1,368 | 2,020 | ||||||||||||
Repurchases of common stock | (90) | — | ||||||||||||
Debt issuance costs | (16) | (24) | ||||||||||||
Distributions paid to noncontrolling interests | (425) | (432) | ||||||||||||
Proceeds from the sale of noncontrolling interests | 37 | 16 | ||||||||||||
Purchases of noncontrolling interests | (127) | (61) | ||||||||||||
Other items, net | 13 | (49) | ||||||||||||
Net cash used in financing activities | (718) | (1,316) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 196 | (1,156) | ||||||||||||
Cash and cash equivalents at beginning of period | 858 | 2,364 | ||||||||||||
Cash and cash equivalents at end of period | $ | 1,054 | $ | 1,208 | ||||||||||
Supplemental disclosures: | ||||||||||||||
Interest paid, net of capitalized interest | $ | (589) | $ | (601) | ||||||||||
Income tax payments, net | $ | (212) | $ | (148) |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
(Dollars in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net operating revenues: | ||||||||||||||||||||||||||
Ambulatory Care | $ | 941 | $ | 806 | $ | 2,788 | $ | 2,315 | ||||||||||||||||||
Hospital Operations and other (prior to inter-segment eliminations) | 3,919 | 3,778 | 11,740 | 11,221 | ||||||||||||||||||||||
Conifer | ||||||||||||||||||||||||||
Tenet | 109 | 116 | 321 | 342 | ||||||||||||||||||||||
Other clients | 206 | 217 | 641 | 648 | ||||||||||||||||||||||
Total Conifer revenues | 315 | 333 | 962 | 990 | ||||||||||||||||||||||
Inter-segment eliminations | (109) | (116) | (321) | (342) | ||||||||||||||||||||||
Total | $ | 5,066 | $ | 4,801 | $ | 15,169 | $ | 14,184 | ||||||||||||||||||
Equity in earnings of unconsolidated affiliates: | ||||||||||||||||||||||||||
Ambulatory Care | $ | 50 | $ | 49 | $ | 149 | $ | 143 | ||||||||||||||||||
Hospital Operations and other | 1 | 2 | 6 | 8 | ||||||||||||||||||||||
Total | $ | 51 | $ | 51 | $ | 155 | $ | 151 | ||||||||||||||||||
Adjusted EBITDA (including grant income): | ||||||||||||||||||||||||||
Ambulatory Care | $ | 370 | $ | 319 | $ | 1,080 | $ | 920 | ||||||||||||||||||
Hospital Operations and other | 401 | 432 | 1,194 | 1,377 | ||||||||||||||||||||||
Conifer | 83 | 90 | 255 | 275 | ||||||||||||||||||||||
Total | $ | 854 | $ | 841 | $ | 2,529 | $ | 2,572 | ||||||||||||||||||
Adjusted EBITDA margins (including grant income): | ||||||||||||||||||||||||||
Ambulatory Care | 39.3 | % | 39.6 | % | 38.7 | % | 39.7 | % | ||||||||||||||||||
Hospital Operations and other | 10.2 | % | 11.4 | % | 10.2 | % | 12.3 | % | ||||||||||||||||||
Conifer | 26.3 | % | 27.0 | % | 26.5 | % | 27.8 | % | ||||||||||||||||||
Total | 16.9 | % | 17.5 | % | 16.7 | % | 18.1 | % | ||||||||||||||||||
Adjusted EBITDA margins (excluding grant income): | ||||||||||||||||||||||||||
Ambulatory Care | 39.3 | % | 39.6 | % | 38.7 | % | 39.6 | % | ||||||||||||||||||
Hospital Operations and other | 10.2 | % | 10.0 | % | 10.1 | % | 10.9 | % | ||||||||||||||||||
Conifer | 26.3 | % | 27.0 | % | 26.5 | % | 27.8 | % | ||||||||||||||||||
Total | 16.8 | % | 16.4 | % | 16.6 | % | 17.0 | % | ||||||||||||||||||
Capital expenditures: | ||||||||||||||||||||||||||
Ambulatory Care | $ | 20 | $ | 18 | $ | 58 | $ | 58 | ||||||||||||||||||
Hospital Operations and other | 153 | 143 | 477 | 405 | ||||||||||||||||||||||
Conifer | 3 | 4 | 8 | 9 | ||||||||||||||||||||||
Total | $ | 176 | $ | 165 | $ | 543 | $ | 472 | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
(Dollars in millions, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 101 | $ | 131 | $ | 367 | $ | 309 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Net income from discontinued operations | — | — | — | 1 | ||||||||||||||||||||||
Net income from continuing operations | 101 | 131 | 367 | 308 | ||||||||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs | (47) | (24) | (84) | (97) | ||||||||||||||||||||||
Litigation and investigation costs | (14) | (12) | (28) | (50) | ||||||||||||||||||||||
Net gains (losses) on sales, consolidation and deconsolidation of facilities | (1) | — | 12 | — | ||||||||||||||||||||||
Loss from early extinguishment of debt | — | — | (11) | (109) | ||||||||||||||||||||||
Tax and noncontrolling interests impact of above items | 10 | 7 | 17 | 33 | ||||||||||||||||||||||
Adjusted net income available from continuing operations to common shareholders | $ | 153 | $ | 160 | $ | 461 | $ | 531 | ||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.94 | $ | 1.16 | $ | 3.41 | $ | 2.81 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs | (0.45) | (0.22) | (0.80) | (0.86) | ||||||||||||||||||||||
Litigation and investigation costs | (0.13) | (0.11) | (0.27) | (0.45) | ||||||||||||||||||||||
Net gains (losses) on sales, consolidation and deconsolidation of facilities | (0.01) | — | 0.12 | — | ||||||||||||||||||||||
Loss from early extinguishment of debt | — | — | (0.10) | (0.97) | ||||||||||||||||||||||
Tax and noncontrolling interests impact of above items | 0.09 | 0.07 | 0.16 | 0.29 | ||||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 1.44 | $ | 1.42 | $ | 4.30 | $ | 4.80 | ||||||||||||||||||
Weighted average basic shares outstanding (in thousands) | 101,544 | 107,923 | 101,869 | 107,732 | ||||||||||||||||||||||
Weighted average dilutive shares outstanding (in thousands) | 104,425 | 109,888 | 105,021 | 112,288 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
(Dollars in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 101 | $ | 131 | $ | 367 | $ | 309 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Net income available to noncontrolling interests | (165) | (137) | (488) | (418) | ||||||||||||||||||||||
Income from discontinued operations, net of tax | — | — | — | 1 | ||||||||||||||||||||||
Income from continuing operations | 266 | 268 | 855 | 726 | ||||||||||||||||||||||
Income tax expense | (79) | (112) | (243) | (297) | ||||||||||||||||||||||
Loss from early extinguishment of debt | — | — | (11) | (109) | ||||||||||||||||||||||
Other non-operating income, net | 4 | 6 | 8 | 6 | ||||||||||||||||||||||
Interest expense | (227) | (222) | (674) | (671) | ||||||||||||||||||||||
Operating income | 568 | 596 | 1,775 | 1,797 | ||||||||||||||||||||||
Litigation and investigation costs | (14) | (12) | (28) | (50) | ||||||||||||||||||||||
Net gains (losses) on sales, consolidation and deconsolidation of facilities | (1) | — | 12 | — | ||||||||||||||||||||||
Impairment and restructuring charges, and acquisition-related costs | (47) | (24) | (84) | (97) | ||||||||||||||||||||||
Depreciation and amortization | (224) | (209) | (654) | (628) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 854 | $ | 841 | $ | 2,529 | $ | 2,572 | ||||||||||||||||||
Net operating revenues | $ | 5,066 | $ | 4,801 | $ | 15,169 | $ | 14,184 | ||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues | 2.0 | % | 2.7 | % | 2.4 | % | 2.2 | % | ||||||||||||||||||
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin) | 16.9 | % | 17.5 | % | 16.7 | % | 18.1 | % | ||||||||||||||||||
2023 | ||||||||||||||
(Dollars in millions) | Q3 | YTD | ||||||||||||
Net cash provided by operating activities | $ | 503 | $ | 1,550 | ||||||||||
Purchases of property and equipment | (176) | (543) | ||||||||||||
Free cash flow – continuing operations | $ | 327 | $ | 1,007 | ||||||||||
Net cash used in investing activities | $ | (169) | $ | (636) | ||||||||||
Net cash used in financing activities | $ | (214) | $ | (718) | ||||||||||
Net cash provided by operating activities | $ | 503 | $ | 1,550 | ||||||||||
Less: | ||||||||||||||
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (27) | (105) | ||||||||||||
Adjusted net cash provided by operating activities from continuing operations | 530 | 1,655 | ||||||||||||
Purchases of property and equipment | (176) | (543) | ||||||||||||
Adjusted free cash flow – continuing operations | $ | 354 | $ | 1,112 | ||||||||||
2022 | ||||||||||||||
(Dollars in millions) | Q3 | YTD | ||||||||||||
Net cash provided by operating activities | $ | 315 | $ | 662 | ||||||||||
Purchases of property and equipment | (165) | (472) | ||||||||||||
Free cash flow - continuing operations | 150 | 190 | ||||||||||||
Add back: | ||||||||||||||
Medicare Advance Repayments | 405 | 880 | ||||||||||||
Free cash flow – continuing operations, excluding repayments 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 |
Fourth Quarter 2023 | FY 2023 | |||||||||||||||||||||||||
(Dollars in millions, except per share amounts) | Low | High | Low | High | ||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 89 | $ | 174 | $ | 456 | $ | 541 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1) | (38) | (13) | (150) | (125) | ||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | — | 12 | 12 | ||||||||||||||||||||||
Loss from early extinguishment of debt(2) | — | — | (11) | (11) | ||||||||||||||||||||||
Tax and noncontrolling interests impact of above items | 8 | 3 | 25 | 20 | ||||||||||||||||||||||
Adjusted net income available from continuing operations to common shareholders | $ | 119 | $ | 184 | $ | 580 | $ | 645 | ||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.83 | $ | 1.64 | $ | 4.25 | $ | 5.06 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements | (0.37) | (0.13) | (1.43) | (1.19) | ||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | — | 0.11 | 0.11 | ||||||||||||||||||||||
Loss from early extinguishment of debt | — | — | (0.10) | (0.10) | ||||||||||||||||||||||
Tax and noncontrolling interests impact of above items | 0.08 | 0.03 | 0.24 | 0.19 | ||||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 1.12 | $ | 1.74 | $ | 5.43 | $ | 6.05 | ||||||||||||||||||
Weighted average basic shares outstanding (in thousands) | 102,000 | 102,000 | 102,000 | 102,000 | ||||||||||||||||||||||
Weighted average dilutive shares outstanding (in thousands) | 105,000 | 105,000 | 105,000 | 105,000 | ||||||||||||||||||||||
(1) The figures shown represent the Company's estimate for restructuring charges plus the actual year-to-date results for impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements. The Company does not generally forecast impairment charges, acquisition-related costs, and litigation costs and settlements because it does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. | ||||||||||||||||||||||||||
(2) The Company does not generally forecast losses from the early extinguishment of debt because the Company does not believe that it can forecast this item with sufficient accuracy since it is indeterminable at the time the Company provides its financial Outlook. The figures shown relate to the debt repurchased or refinanced by the Company in 2023. |
Fourth Quarter 2023 | FY 2023 | |||||||||||||||||||||||||
(Dollars in millions) | Low | High | Low | High | ||||||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders | $ | 89 | $ | 174 | $ | 456 | $ | 541 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Net income available to noncontrolling interests | (187) | (207) | (675) | (695) | ||||||||||||||||||||||
Income tax expense | (77) | (92) | (320) | (335) | ||||||||||||||||||||||
Interest expense | (231) | (221) | (905) | (895) | ||||||||||||||||||||||
Loss from early extinguishment of debt(2) | — | — | (11) | (11) | ||||||||||||||||||||||
Other non-operating income, net | 2 | 7 | 10 | 15 | ||||||||||||||||||||||
Net gains on sales, consolidation and deconsolidation of facilities | — | — | 12 | 12 | ||||||||||||||||||||||
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1) | (38) | (13) | (150) | (125) | ||||||||||||||||||||||
Depreciation and amortization | (216) | (236) | (870) | (890) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 836 | $ | 936 | $ | 3,365 | $ | 3,465 | ||||||||||||||||||
Income from continuing operations | $ | 89 | $ | 174 | $ | 456 | $ | 541 | ||||||||||||||||||
Net operating revenues | $ | 5,131 | $ | 5,331 | $ | 20,300 | $ | 20,500 | ||||||||||||||||||
Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues | 1.7 | % | 3.3 | % | 2.2 | % | 2.6 | % | ||||||||||||||||||
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin) | 16.3 | % | 17.6 | % | 16.6 | % | 16.9 | % | ||||||||||||||||||
(1) The figures shown represent the Company's estimate for restructuring charges plus the actual year-to-date results for impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements. The Company does not generally forecast impairment charges, acquisition-related costs, and litigation costs and settlements because it does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. | ||||||||||||||||||||||||||
(2) The Company does not generally forecast losses from the early extinguishment of debt because the Company does not believe that it can forecast this item with sufficient accuracy since it is indeterminable at the time the Company provides its financial Outlook. The figures shown relate to the debt repurchased or refinanced by the Company in 2023. |
(Dollars in millions) | FY 2023 | |||||||||||||
Low | High | |||||||||||||
Net cash provided by operating activities | $ | 1,800 | $ | 2,075 | ||||||||||
Purchases of property and equipment | (675) | (725) | ||||||||||||
Free cash flow – continuing operations | $ | 1,125 | $ | 1,350 | ||||||||||
Net cash provided by operating activities | $ | 1,800 | $ | 2,075 | ||||||||||
Less: | ||||||||||||||
Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1) | (150) | (125) | ||||||||||||
Adjusted net cash provided by operating activities – continuing operations | 1,950 | 2,200 | ||||||||||||
Purchases of property and equipment | (675) | (725) | ||||||||||||
Adjusted free cash flow – continuing operations(2) | $ | 1,275 | $ | 1,475 | ||||||||||
(1) The figures shown represent the Company's estimate for restructuring payments plus the actual year-to-date payments for restructuring charges, acquisition-related costs, and litigation costs and settlements. The Company does not generally forecast payments for acquisition-related costs, and litigation costs and settlements because it does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. | ||||||||||||||
(2) The Company’s definition of Adjusted Free Cash Flow does 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, and (ii) distributions paid to noncontrolling interests. | ||||||||||||||
___S)@ !Y( /V1___[HO__
M_:, /< # ;/_ !$( Y@'" ,!(@ "$0$#$0'_Q ? !!0$! 0$! 0
M 0(#! 4&!P@)"@O_Q "U$ " 0,# @0#!04$! 7T! @, !!$%
M$B$Q008346$'(G$4,H&1H0@C0K'!%5+1\"0S8G*""0H6%Q@9&B4F)R@I*C0U
M-C7
ELV7B8\>9&3C?"QZ,.1G:V#U_T
MM\#O'W#\1P67YA:&+2]%42ZQ[/O'YK2]O\/2,_E+6SE]@T445_21_'@4444 %?F_P#\%//V2X?VH/V>+N[\/6PE\5^%
M5DU#2V49DE55S/:CN?-17TS^"%2Q>&S^BM*B]G/_$M8OU<;KTBCYYHHHK[<_AP****
M "BBB@ HHHH _LU_X)!?\F$^$?\ KXU/_P!+IZ_3.OS._P""0BLO[!/A'<",
MW&ID9]/MT]?IC7XQF_\ O53U?YG^UOA'_P DKEO_ %YI?^D(****\X_0PHHH
MH **** "BBB@ HHHH **** "BBB@ HHHH *_(_\ X+N_\HF?C)_V#K'_ -.5
MI7ZX5^1__!=W_E$S\9/^P=8_^G*TKZG@;_D=X/\ Z^T__2D /YY%.5#J3QWKDQN88?#0]KB:BA'O)I+[V7"G*3M%7/B2BO
MU,_XAQZW_P %;/AHTP#+
M90ZS<\^J:5=!2/HQ%?B17[L?\&WO_*6;P+_V#M;_ /3;<5\=XB2:R#&M?\^I
M_P#I+.W+E_M$/5'^EQ1117^8!^EA1110 5_.=_P7Q\7L$^'/@.)N#_:%_(N?
M^N,49(_[[Q^-?T8U_)S_ ,%RO$TFJ?M6:/X>!_=Z7X>MUQVWRSSR'\<%?TKZ
M+A:GS8R+[7_(_G+Z5F9_5^"Z\$]:DH1_\F4ORBS\7:**4 L0H[U^K'^3A_0/
M_P $*O@,NJ^+O$W[16L0YBTF,:1IS,.//G >X9?]I(MB_24U_3!7QI_P3_\
M@D/@%^R7X0\$74/DZA<6@U&_!^]]JO?WSJWO&K+']$%?9=?CN=XSV^*E/ILO
M1'^RW@=P9_87#&%P4E:;7//_ !3U:?II'Y!1117DGZT%%%% !1110 4444 %
M%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 44
M44 %%%% !1110 4444 075K;7UK)97B"6&92CHPR&5A@@CT(XK^)+]I?X43_
M 0^._B?X8R*5BTN^D2W)S\UNYWP-S_>B93^-?VZ5_.5_P %H?A.-&^)/AOX
MPV$6(M;M&L;E@.//M""A;W:.0 >T=?RK]+7A3ZYP_#,H+WJ$M?\ #.T7_P"3
M(E.1?Z;:W.?^NL*O_6OX3D.UPWH:_M>_9'U236?V7OA_J$IRS:#
M8J?JD*H?Y5_:7T,\9RX['8?^:,']S:_]N/\ .K]H?@%+*\LQ7\LYQ_\ HQ?
M_MI]$4445_?Q_E8%%%% !1110 4444 %%%% !1110 4444 %%%% !1110 44
M44 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !111
M0 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%%
M!1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %
M%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 44
M44 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !111
M0 4444 %%%% '__0_OXHHHH **** "BBB@ HHHH **** "BBB@ HHHH ****
M "BBB@ HHHH **** /Q7_P""UG_!+'1/^"CG[/IU3P1!%;_%#P=%+/X?NVPG
MVM#\TNG3.<#RYL9B9CB.7!R%9\_YF/B3PWK_ (.\0WWA/Q59S:=J>F3R6MW:
MW"&.6&:)BDD*-)M$^?5;6)?^/R%%^]=0(/WB@9FC&1\Z /_37@/XJ+ U%DN82_=2?N
M-_9;Z/\ NM_<_)Z?-YYE?.O;4UKU/X.:***_M8^+"BBB@ HHHH **** "BBB
M@ IRLR,'0X(Y!%-HH _N,_X(/?\ !=2W\>6VC?L3?MG:N(]=B$=EX8\27DG%
M\H^6.QO9'/\ Q\#A89F/[WA&/F8,G]@E?XN4
+L2TFHVL:_P#+NQ^:XC4?NCF0#RRW
ME_Q]U_M%7-M;7MM)9WD:RPRJ4=' 965A@JP/!!'!!ZU_!W_P75_X(4W'P&N-
M5_;'_8XTIYO!$KO=>(/#]JA9M'9CE[FU0