- Net income from continuing operations attributable to common
shareholders of $2 million, or $0.02 per diluted share, in 4Q19
versus a net loss from continuing operations of $5 million, or
$0.05 per diluted share in 4Q18
- Several 4Q19 key financial metrics up significantly year over
year:
- Consolidated Adjusted EBITDA up 18 percent (above the Outlook
mid-point)
- Consolidated Adjusted diluted EPS up 94 percent (above the
Outlook mid-point)
- Hospital segment Adjusted EBITDA up 16 percent
- Ambulatory segment EBITDA less NCI up 26 percent
- Conifer segment Adjusted EBITDA up 8 percent; related margins
up 490 basis points
- Strong growth in patient volumes continued in 4Q19:
- Hospital segment same-hospital admissions and adjusted
admissions grew 2.6 percent and 1.9 percent, respectively
- Ambulatory segment system-wide same-facility surgical cases
grew 3.4 percent
- FY 2019 net cash from operating activities rose 18 percent;
Adjusted free cash flow rose 27 percent (both above the Outlook
mid-point)
- FY 2020 Outlook anticipates continued growth from operational
improvements:
- Net income from continuing operations attributable to Tenet
Common shareholders, $1.23 to $2.31 per diluted share
- Adjusted EBITDA of $2.785 billion to $2.885 billion
- Adjusted diluted earnings per share of $2.69 to $3.35
Tenet Healthcare Corporation (Tenet) (NYSE: THC) today announced
its results for the quarter ended December 31, 2019 (4Q19).
“Our financial results for 2019 support the sustainable changes
we have made across each of our operating segments,” said Ronald A.
Rittenmeyer, Executive Chairman and Chief Executive Officer. “We
closed the year with a very strong fourth quarter and believe our
focus on our patients, our physicians and all stakeholders —
supported by underlying enhancements to technology, a renewed
dedication to customer service and a keen eye on administrative
expenses — are driving our growth and positioning us well for 2020
and future years.”
Tenet's results for 4Q19 versus the quarter ended December 31,
2018 (4Q18) and the year ended December 31, 2019 (FY 2019) versus
the year ended December 31, 2018 (FY 2018) were as follows:
($ in millions, except per share
results)
4Q19
4Q18
FY 2019
FY 2018
Net income (loss) from continuing
operations attributable to Tenet common shareholders
$2
$(5)
$(243)
$108
Net income (loss) from continuing
operations attributable to Tenet common shareholders per diluted
share
$0.02
$(0.05)
$(2.35)
$1.04
Adjusted EBITDA
$805
$684
$2,706
$2,560
Adjusted diluted earnings per share from
continuing operations
$0.99
$0.51
$2.68
$1.86
The table above as well as tables and
discussions throughout this earnings release include certain
financial measures that are not in accordance with Generally
Accepted Accounting Principles (GAAP). Reconciliations of GAAP
measures to the Adjusted (non-GAAP) measures used are detailed in
Tables #1-6 included at the end of this earnings release.
Management’s reasoning for the use of these non-GAAP measures and
descriptions of the various non-GAAP measures are included in the
Non-GAAP Financial Measures section of this earnings release.
Results from Continuing Operations
Attributable to Tenet Common Shareholders
- Net income from continuing operations attributable to its
common shareholders was $2 million, or $0.02 per diluted share, in
4Q19 versus a net loss from continuing operations of $5 million, or
$0.05 per diluted share in 4Q18. The $7 million year-over-year
increase was driven primarily by higher net operating revenues
associated with increased patient volumes and the beneficial effect
of the Company's continuing cost reduction initiatives.
- For FY 2019, the net loss from continuing operations
attributable to the Company's common shareholders of $243 million,
or $2.35 per diluted share, was primarily driven by the $227
million pretax loss, or $2.16 per diluted share, associated with
debt refinancings as well as impairment and restructuring charges
and acquisition-related costs of $185 million, or $1.76 per diluted
share. The debt refinancings will reduce future annual cash
interest payments and retired all significant debt maturities until
April 2022. Net income from continuing operations was $108 million,
or $1.04 per diluted share for FY 2018.
Adjusted Results from Continuing
Operations Attributable to Tenet Common Shareholders
Reconciliations of net income available (loss attributable) to
Tenet common shareholders to Adjusted net income from continuing
operations available to Tenet's common shareholders are contained
in Table #1 at the end of this release.
- Tenet’s 4Q19 Adjusted net income from continuing operations
available to its common shareholders rose to $105 million, or $0.99
per diluted share, compared to $53 million or $0.51 per diluted
share, in 4Q18. The $52 million, or 98.1 percent, increase was
primarily driven by operational improvements in each of the
Company's business segments.
- For FY 2019, Tenet reported Adjusted net income from continuing
operations available to its common shareholders of $281 million, or
$2.68 per diluted share, compared to $193 million, or $1.86 per
diluted share, in FY 2018 also primarily driven by operational
improvements in each of the business segments, partially offset by
a $35 million year-over-year increase in expense associated with
the change in the U.S. Treasury rate used to discount the Company's
actuarial liabilities. FY 2019 results were achieved despite
lower-than-anticipated revenue and additional expenses related to
Hurricane Dorian and an increase in contract labor costs associated
with a strike by union nurses at certain of the Company's hospitals
during the third quarter of 2019.
Adjusted EBITDA
Reconciliations of net income available (loss attributable) to
Tenet common shareholders to Adjusted EBITDA are contained in Table
#2 at the end of this release.
- Adjusted EBITDA was $805 million in 4Q19 compared to $684
million in 4Q18, an increase of $121 million, or 17.7 percent. This
year-over-year improvement was primarily due to higher patient
volumes as well as the beneficial effect of savings associated with
the Company's cost reduction initiatives. Changes in the U.S.
Treasury rate described above favorably impacted 4Q19 by decreasing
malpractice and workers' compensation expense by $6 million in 4Q19
versus increasing that expense by $10 million in 4Q18.
- For FY 2019, Adjusted EBITDA was $2.706 billion compared to
$2.560 billion in FY 2018, an increase of $146 million, or 5.7
percent. This growth in Adjusted EBITDA was driven primarily by the
same factors impacting the 4Q19 year-over-year results noted above,
partially offset by a $35 million year-over-year increase in
expense associated with the change in the U.S. Treasury rate.
Additionally, FY 2019 results were achieved even with the
challenges associated with Hurricane Dorian and the increase in
contract labor costs described above
Hospital Operations and Other Segment
Results
Tenet’s Hospital Operations and other business segment is
comprised of acute care and specialty hospitals, ancillary
outpatient facilities, freestanding urgent care centers (nearly all
which are managed by USPI and operated under the MedPost brand),
micro-hospitals and physician practices.
Hospital Operations and other segment
results ($ in millions)
4Q19
4Q18
FY 2019
FY 2018
Net operating revenues
$3,983
$3,843
$15,522
$15,285
Same-hospital net patient services
revenues (a)
$3,673
$3,490
$14,339
$13,707
Adjusted EBITDA
$407
$352
$1,425
$1,411
Admissions growth
2.6%
(2.7)%
2.3%
(1.7)%
Adjusted Admissions growth (b)
1.9%
(0.8)%
1.9%
0.0%
(a)
Same-hospital revenues and statistical
data include those for the 65 hospitals operated by the Company’s
Hospital Operations and other segment continuously from January 1,
2018 through December 31, 2019. Revenues and results for any
hospitals acquired or disposed of during this time frame are
excluded.
(b)
Adjusted admissions are hospital
admissions adjusted to include outpatient admissions by multiplying
actual patient admissions by the sum of gross inpatient revenues
and outpatient revenues, then dividing that result by gross
inpatient revenues.
Revenues and Volumes
- Net operating revenues in the Hospital Operations and other
segment were $3.983 billion in 4Q19, up 3.6 percent from $3.843
billion in 4Q18. The increase in revenue was primarily due to
revenue growth on a same-hospital basis, partially offset by
hospital divestitures. Revenues included $59 million from the
California Provider Fee program in 4Q19 compared to $64 million in
4Q18.
- For FY 2019, segment net operating revenues were $15.522
billion, up 1.6 percent, versus $15.285 billion in FY 2018.
Revenues included $246 million from the California Provider Fee
program in FY 2019 compared to $262 million in FY 2018.
- On a same-hospital basis, net patient service revenues were
$3.673 billion in 4Q19, up 5.2 percent from $3.490 billion in 4Q18.
Admissions increased 2.6 percent on a same-hospital basis, adjusted
admissions increased 1.9 percent and revenue per adjusted admission
increased 3.2 percent. Hospital surgeries grew slightly at 0.2
percent, and increased 3.5 percent including surgeries performed at
United Surgical Partners International (USPI) facilities located in
the Company’s hospital markets.
- For FY 2019, on a same-hospital basis, net patient service
revenues were $14.339 billion, up 4.6 percent versus $13.707
billion in FY 2018. Admissions increased 2.3 percent on a
same-hospital basis in FY 2019, adjusted admissions increased 1.9
percent and revenue per adjusted admission increased 2.7 percent.
Hospital surgeries declined 0.7 percent, and increased 1.5 percent
including surgeries performed at USPI facilities located in the
Company’s hospital markets.
Operating Expenses
- Selected operating expenses in the segment increased 3.2
percent on a per adjusted admission basis in 4Q19. Selected
operating expenses include salaries, wages and benefits, supplies
and other operating expenses.
- For FY 2019, selected operating expenses increased 3.3 percent
on a per adjusted admission basis.
Earnings
- Adjusted EBITDA in the segment was $407 million in 4Q19, an
increase of 15.6 percent compared to $352 million in 4Q18. The
Adjusted EBITDA margin was 10.2 percent in 4Q19 compared to 9.2
percent in 4Q18.
- For FY 2019, Adjusted EBITDA was $1.425 billion compared to
$1.411 billion in FY 2018. The Adjusted EBITDA margin was 9.2
percent in both FY 2019 and FY 2018.
Ambulatory Care Segment
Results
Tenet’s Ambulatory Care business segment is comprised of the
operations of USPI. As of December 31, 2019, USPI had interests in
260 ambulatory surgery centers, 39 urgent care centers (nearly all
of which operate under the CareSpot brand), 23 imaging centers and
24 surgical hospitals in 27 states. The Company owns 95 percent of
USPI.
Ambulatory Care segment results
($ in millions)
4Q19
4Q18
FY 2019
FY 2018
Net operating revenues
$632
$554
$2,158
$2,085
Same-facility system-wide net patient
services revenues (c)
$1,317
$1,226
$4,546
$4,286
Adjusted EBITDA
$304
$245
$895
$792
Adjusted EBITDA less facility-level NCI;
excludes Aspen for FY 2018
$190
$151
$568
$488
Surgical cases growth
3.4%
1.1%
3.3%
2.1%
Total ambulatory cases growth
5.7%
0.9%
3.7%
3.4%
(c)
Same-facility system-wide revenues and
statistical information include the results of many of the
facilities in which the Ambulatory Care segment has an investment
that are not consolidated by Tenet (of the 346 facilities at
December 31, 2019, the results of 108 were accounted for under the
equity method for unconsolidated affiliates). To help analyze the
segment’s results of operations, management uses system-wide
measures, which include revenues and cases of both consolidated and
unconsolidated facilities.
Revenues and Volumes
- The Ambulatory Care segment produced net operating revenues of
$632 million in 4Q19, an increase of 14.1 percent compared to $554
million in 4Q18.
- For FY 2019, segment net operating revenues of $2.158 billion
increased 3.5 percent compared to $2.085 billion in FY 2018. This
year-over-year increase was achieved despite the divestiture of
Aspen (the Company's former business in the United Kingdom), which
was completed in the third quarter of FY 2018. Aspen generated $117
million of revenues in FY 2018.
- On a same-facility system-wide basis, revenues increased 6.1
percent in FY 2019, with cases increasing 3.7 percent and revenue
per case increasing 2.2 percent. In the surgical business, which
represents the majority of segment revenues, same-facility
system-wide revenues grew 6.0 percent in FY 2019, with cases up 3.3
percent and revenue per case up 2.6 percent.
Earnings
- Segment Adjusted EBITDA of $304 million in 4Q19, was up 24.1
percent from $245 million in 4Q18; Adjusted EBITDA less
facility-level non-controlling interest (NCI) was $190 million, up
25.8 percent from $151 million in 4Q18.
- For FY 2019, the segment generated Adjusted EBITDA of $895
million in FY 2019, up 13.0 percent from $792 million in FY 2018,
or growth of 15.3 percent excluding Aspen's $16 million of Adjusted
EBITDA in FY 2018. Adjusted EBITDA less facility-level NCI was $568
million, up 12.7 percent from $504 million in FY 2018, or growth of
16.4 percent excluding Aspen in FY 2018.
Conifer Segment Results
Tenet’s Conifer business segment provides healthcare business
process services in the areas of hospital and physician revenue
cycle management as well as value-based care solutions to
healthcare systems, individual hospitals, physician practices,
self-insured organizations, healthcare plans and other
entities.
Conifer segment results
($ in millions)
4Q19
4Q18
FY 2019
FY 2018
Net operating revenues
$332
$372
$1,372
$1,533
Adjusted EBITDA
$94
$87
$386
$357
As previously announced, the Company anticipates a spin-off of
its Conifer segment by the end of the second quarter of 2021. This
transaction is expected to both enhance shareholder value and
reduce the level of debt on Tenet through a tax-free debt-for-debt
exchange.
Revenues
- During 4Q19, Conifer segment revenues declined 10.8 percent to
$332 million, from $372 million in 4Q18, primarily due to client
attrition as a result of hospital divestitures by both Tenet and
other customers. Revenues from third-party customers declined 14.0
percent to $191 million in 4Q19.
- During FY 2019, Conifer’s revenues declined 10.5 percent to
$1.372 billion, from $1.533 billion in FY 2018 primarily due to the
same factor impacting 4Q19 revenues. Revenue from third-party
customers declined 15.3 percent to $799 million in FY 2019.
Earnings
- Conifer generated $94 million of Adjusted EBITDA in 4Q19, up
8.0 percent from $87 million in 4Q18. Adjusted EBITDA margins
increased 490 basis points to 28.3 percent primarily due to the
Company’s continuing cost-reduction initiatives.
- Conifer generated $386 million of Adjusted EBITDA in FY 2019,
up 8.1 percent from $357 million in FY 2018. Adjusted EBITDA
margins increased 480 basis points to 28.1 percent.
Cash Flows and Liquidity
Balance Sheet
- Cash and cash equivalents were $262 million at December 31,
2019 compared to $314 million at September 30, 2019.
- Accounts receivable days outstanding from continuing operations
were 58.4 at December 31, 2019 a decrease of 1.2 days from 59.6 at
September 30, 2019.
- The Company had no outstanding borrowings on its $1.5 billion
credit line as of December 31, 2019.
- Total debt at December 31, 2019 of $14.751 billion was down
from both December 31, 2018 ($14.826 billion) and September 30,
2019 ($15.023 billion). Similarly, the Company's ratio of net debt
(debt less cash and cash equivalents) to Adjusted EBITDA declined
to 5.35x at December 31, 2019 versus 5.63x at December 31, 2018 and
5.69x at September 30, 2019.
Cash flows
Reconciliations of net cash provided by operating activities to
both Free Cash Flow and Adjusted Free Cash Flow are contained in
Table #3 at the end of this release.
- Net cash provided by operating activities was $1.233 billion in
FY 2019, an increase of 17.5 percent, compared to $1.049 billion in
FY 2018.
- After subtracting $670 million and $617 million of capital
expenditures in FY 2019 and FY 2018, respectively, Free Cash Flow
was $563 million in FY 2019, an increase of 30.3 percent, compared
to Free Cash Flow of $432 million in FY 2018.
- Adjusted Free Cash Flow was $760 million in FY 2019,
representing an increase of 26.7 percent, from $600 million of
Adjusted Free Cash Flow in FY 2018.
- Net cash used in investing activities was $619 million in FY
2019 compared to $115 million of net cash used in FY 2018. Results
in FY 2019 included $162 million of proceeds from the sales of
facilities, marketable securities, long-term investments and other
assets compared to $742 million in FY 2018.
- Net cash used in financing activities was $763 million in FY
2019 compared to $1.134 billion used in financing activities in FY
2018. The Company invested $630 million in cash to increase its
ownership in USPI from 80 percent to 95 percent during FY
2018.
Company Outlook
- Reconciliations of Outlook net income available (loss
attributable) to Tenet common shareholders to Outlook Adjusted
EBITDA for the year ending December 31, 2020 (FY 2020) and the
quarter ending March 31, 2020 (1Q20) are contained in Table #4 at
the end of this release.
- Reconciliations of Outlook net income available (loss
attributable) to Tenet common shareholders to Outlook Adjusted net
income from continuing operations to common shareholders for FY
2020 and 1Q20 are contained in Table #5 at the end of this
release.
- Reconciliations of Outlook net cash provided by operating
activities to Outlook Adjusted free cash flow from continuing
operations for FY 2020 and 1Q20 are contained in Table #6 at the
end of this release.
Tenet’s Outlook for FY 2020 and for 1Q20 on a consolidated basis
and by segment follows:
CONSOLIDATED ($ in millions except
per share amounts)
FY 2020 Outlook
1Q20 Outlook
Net operating revenues; includes CA
Provider Fee revenues of approx. $239 million for FY 2020 and
approx. $60 million for 1Q20
$19,100 to $19,500
$4,600 to $4,800
Net income (loss) from continuing
operations attributable to Tenet common stockholders
$130 to $245
$(7) to $37
Adjusted EBITDA
$2,785 to $2,885
$625 to $675
Adjusted EBITDA margin
14.6% to 14.8%
13.6% to 14.1%
Diluted income (loss) per common share
from continuing operations
$1.23 to $2.31
$(0.07) to $0.35
Adjusted net income from continuing
operations
$285 to $355
$45 to $80
Adjusted diluted earnings per share from
continuing operations
$2.69 to $3.35
$0.42 to $0.75
Equity in earnings of unconsolidated
affiliates
$180 to $200
$30 to $40
Depreciation and amortization
$845 to $865
$205 to $215
Interest expense
$975 to $985
$240 to $250
Net income available to NCI
$450 to $470
$90 to $100
Weighted average diluted common shares
~ 106 million
~106 million
Effective tax rate (d)
22% to 23%
Net cash provided by operating
activities
$1,250 to $1,525
Adjusted net cash provided by operating
activities
$1,475 to $1,725
Capital expenditures
$700 to $750
Adjusted free cash flow
$775 to $975
NCI cash distributions
$350 to $370
(d)
The effective tax rate is calculated as
income tax expense divided by the adjusted pretax income. Income
tax expense is calculated by multiplying the corporate tax rate by
the sum of: adjusted pretax income less GAAP NCI expense plus
permanent differences, non-deductible interest, and non-cash NCI
expense related to portion of USPI the Company does not own.
Hospital Operations and Other
Segment ($ in millions)
FY 2020 Outlook
Comments
Net operating revenues
$15,965 to $16,215
Prior to intercompany eliminations of
approx. $565 million for Conifer
Adjusted EBITDA
$1,430 to $1,490
NCI
~$10
Based on GAAP NCI expense
Net revenues growth
2.9% to 4.5%
Adjusted EBITDA growth
0.4% to 4.6%
Admissions growth
1.5% to 2.5%
On a same-hospital basis
Adjusted admissions growth
1.5% to 2.5%
On a same-hospital basis
Net revenues per adjusted admission
growth
1.5% to 2.5%
On a same-hospital basis
Total costs per adjusted admission
growth
2.5% to 3.5%
Ambulatory Care Segment ($ in
millions)
FY 2020 Outlook
Comments
Net operating revenues
$2,350 to $2,450
Net revenues growth
8.9% to 13.5%
Adjusted EBITDA
$970 to $1,000
Adjusted EBITDA growth
8.4% to 11.7%
NCI
$365 to $385
Based on GAAP NCI expense
Adjusted EBITDA less NCI growth
9.2% to 10.9%
Facility-level NCI expense
Surgical cases growth
3.0% to 3.5%
On a same-facility system-wide basis;
excludes non-surgical services
Net revenues per surgical case growth
2.0% to 2.5%
On a same-facility system-wide basis;
excludes non-surgical services
Conifer Segment ($ in millions)
FY 2020 Outlook
Comments
Net operating revenues
$1,350 to $1,400
Adjusted EBITDA
$385 to $395
NCI
~$75
Based on GAAP NCI expense; no cash
distributions to be made
Net revenues growth
(1.6%) to 2.0%
Adjusted EBITDA growth
(0.3%) to 2.3%
Management’s Webcast Discussion of
Results and Outlook
Tenet management will discuss the Company’s 4Q19 and FY 2019
results, as well as the Company's Outlook for FY 2020, on a webcast
scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on
February 25, 2020. Investors can access the webcast through the
Company’s website at www.tenethealth.com/investors.
The slide presentation associated with the webcast referenced
above, a copy of this earnings press release and a supplemental
financial disclosure document will be available on the Company's
Investor Relations website.
Cautionary Statement
This release contains “forward-looking statements” - that is,
statements that relate to future, not past, events. In this
context, forward-looking statements often address the Company's
expected future business and financial performance and financial
condition, and often contain words such as “expect,” “anticipate,”
“assume,” “believe,” “budget,” “estimate,” “forecast,” “intend,”
“plan,” “predict,” “project,” “seek,” “see,” “target,” or “will.”
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. Particular uncertainties that
could cause the Company's actual results to be materially different
than those expressed in the Company's forward-looking statements
include, but are not limited to, the factors disclosed under
“Forward-Looking Statements” and “Risk Factors” in our Form 10-K
for the year ended December 31, 2019 and other filings with the
Securities and Exchange Commission.
About Tenet Healthcare
Tenet Healthcare Corporation (NYSE: THC) is a diversified
healthcare services company headquartered in Dallas with 113,000
employees. Through an expansive care network that includes United
Surgical Partners International, we operate 65 hospitals and
approximately 500 other healthcare facilities, including surgical
hospitals, ambulatory surgery centers, urgent care and imaging
centers and other care sites and clinics. We also operate Conifer
Health Solutions, which provides revenue cycle management and
value-based care services to hospitals, health systems, physician
practices, employers and other customers. Across the Tenet
enterprise, we are united by our mission to deliver quality,
compassionate care in the communities we serve. For more
information, please visit www.tenethealth.com.
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.
Tenet Healthcare
Corporation
Financial Statements and
Reconciliations
4Q19 Earnings Release
Table of Contents
Description
Page
Consolidated Statements of Operations -
quarters
13
Consolidated Statements of Operations -
years
14
Consolidated Balance Sheets
15
Consolidated Statements of Cash Flows
16
Segment Reporting
17
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
Table #4 - Reconciliations of Outlook Net
Income to Outlook Adjusted EBITDA
23
Table #5 - Reconciliations of Outlook Net
Income to Outlook Adjusted Net Income
24
Table #6 - Reconciliations of Outlook Net
Cash Provided by Operating Activities to Outlook Free Cash Flow and
Outlook Adjusted Free Cash Flow
24
TENET HEALTHCARE
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in millions except per share
amounts)
Three Months Ended December
31,
2019
%
2018
%
Change
Net operating revenues
$
4,806
100.0
%
$
4,619
100.0
%
4.0
%
Equity in earnings of unconsolidated
affiliates
61
1.3
%
53
1.1
%
15.1
%
Operating expenses:
Salaries, wages and benefits
2,229
46.4
%
2,156
46.7
%
3.4
%
Supplies
803
16.7
%
756
16.4
%
6.2
%
Other operating expenses, net
1,030
21.5
%
1,076
23.3
%
(4.3
)%
Depreciation and amortization
223
4.6
%
200
4.3
%
Impairment and restructuring charges, and
acquisition-related costs
84
1.7
%
86
1.9
%
Litigation and investigation costs
26
0.5
%
10
0.2
%
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
12
0.3
%
(16
)
(0.4
)%
Operating income
460
9.6
%
404
8.7
%
Interest expense
(243
)
(246
)
Other non-operating expense, net
(2
)
(3
)
Gain from early extinguishment of debt
—
3
Income from continuing operations,
before income taxes
215
158
Income tax expense
(86
)
(56
)
Income from continuing operations,
before discontinued operations
129
102
Discontinued operations:
Income from operations
2
1
Income tax expense
(2
)
(1
)
Income (loss) from discontinued
operations
—
—
Net income
129
102
Less: Net income available to
noncontrolling interests
127
107
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
2
$
(5
)
Amounts available (attributable) to
Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations,
net of tax
$
2
$
(5
)
Income (loss) from discontinued
operations, net of tax
—
—
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
2
$
(5
)
Earnings (loss) per share available
(attributable) to Tenet Healthcare Corporation common
shareholders:
Basic
Continuing operations
$
0.02
$
(0.05
)
Discontinued operations
—
—
$
0.02
$
(0.05
)
Diluted
Continuing operations
$
0.02
$
(0.05
)
Discontinued operations
—
—
$
0.02
$
(0.05
)
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
104,048
102,501
Diluted*
105,666
102,501
*
Had the Company generated income from
continuing operations in the three months ended December 31, 2018,
the effect of employee stock options, restricted stock units and
deferred compensation units on the diluted shares calculation would
have been an increase of 1,617 thousand shares.
TENET HEALTHCARE
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in millions except per share
amounts)
Years Ended December
31,
2019
%
2018
%
Change
Net operating revenues
$
18,479
100.0
%
$
18,313
100.0
%
0.9
%
Equity in earnings of unconsolidated
affiliates
175
0.9
%
150
0.8
%
16.7
%
Operating expenses:
Salaries, wages and benefits
8,704
47.1
%
8,634
47.1
%
0.8
%
Supplies
3,057
16.5
%
3,004
16.4
%
1.8
%
Other operating expenses, net
4,189
22.6
%
4,256
23.3
%
(1.6
)%
Depreciation and amortization
850
4.6
%
802
4.4
%
Impairment and restructuring charges, and
acquisition-related costs
185
1.0
%
209
1.1
%
Litigation and investigation costs
141
0.8
%
38
0.2
%
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
15
0.1
%
(127
)
(0.7
)%
Operating income
1,513
8.2
%
1,647
9.0
%
Interest expense
(985
)
(1,004
)
Other non-operating expense, net
(5
)
(5
)
Gain (loss) from early extinguishment of
debt
(227
)
1
Income from continuing operations,
before income taxes
296
639
Income tax expense
(153
)
(176
)
Income from continuing operations,
before discontinued operations
143
463
Discontinued operations:
Income from operations
15
4
Income tax expense
(4
)
(1
)
Income from discontinued
operations
11
3
Net income
154
466
Less: Net income available to
noncontrolling interests
386
355
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(232
)
$
111
Amounts available (attributable) to
Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations,
net of tax
$
(243
)
$
108
Income from discontinued operations, net
of tax
11
3
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(232
)
$
111
Earnings (loss) per share available
(attributable) to Tenet Healthcare Corporation common
shareholders:
Basic
Continuing operations
$
(2.35
)
$
1.06
Discontinued operations
0.11
0.03
$
(2.24
)
$
1.09
Diluted
Continuing operations
$
(2.35
)
$
1.04
Discontinued operations
0.11
0.03
$
(2.24
)
$
1.07
Weighted average shares and dilutive
securities outstanding
(in thousands):
Basic
103,398
102,110
Diluted*
103,398
103,881
*
Had the Company generated income from
continuing operations in the twelve months ended December 31, 2019,
the effect of employee stock options, restricted stock units and
deferred compensation units on the diluted shares calculation would
have been an increase of 1,457 thousand shares.
TENET HEALTHCARE
CORPORATION
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
December 31,
December 31,
(Dollars in millions)
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
262
$
411
Accounts receivable
2,743
2,595
Inventories of supplies, at cost
310
305
Income tax receivable
10
21
Assets held for sale
387
107
Other current assets
1,369
1,197
Total current assets
5,081
4,636
Investments and other assets
2,369
1,456
Deferred income taxes
169
312
Property and equipment, at cost, less
accumulated depreciation and amortization
6,878
6,993
Goodwill
7,252
7,281
Other intangible assets, at cost, less
accumulated amortization
1,602
1,731
Total assets
$
23,351
$
22,409
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
171
$
182
Accounts payable
1,204
1,207
Accrued compensation and benefits
877
838
Professional and general liability
reserves
330
216
Accrued interest payable
245
240
Liabilities held for sale
44
43
Other current liabilities
1,334
1,131
Total current liabilities
4,205
3,857
Long-term debt, net of current portion
14,580
14,644
Professional and general liability
reserves
585
666
Defined benefit plan obligations
560
521
Deferred income taxes
27
36
Other long-term liabilities
1,405
578
Total liabilities
21,362
20,302
Commitments and contingencies
Redeemable noncontrolling interests in
equity of consolidated subsidiaries
1,506
1,420
Equity:
Shareholders’ equity:
Common stock
7
7
Additional paid-in capital
4,760
4,747
Accumulated other comprehensive loss
(257
)
(223
)
Accumulated deficit
(2,467
)
(2,236
)
Common stock in treasury, at cost
(2,414
)
(2,414
)
Total shareholders’ deficit
(371
)
(119
)
Noncontrolling interests
854
806
Total equity
483
687
Total liabilities and equity
$
23,351
$
22,409
TENET HEALTHCARE
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOW
(Unaudited)
Years Ended
(Dollars in millions)
December 31,
2019
2018
Net income
$
154
$
466
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization
850
802
Deferred income tax expense
137
150
Stock-based compensation expense
42
46
Impairment and restructuring charges, and
acquisition-related costs
185
209
Litigation and investigation costs
141
38
Net losses (gains) on sales, consolidation
and deconsolidation of facilities
15
(127
)
Loss (gain) from early extinguishment of
debt
227
(1
)
Equity in earnings of unconsolidated
affiliates, net of distributions received
(32
)
(12
)
Amortization of debt discount and debt
issuance costs
35
45
Pre-tax income from discontinued
operations
(15
)
(4
)
Other items, net
(15
)
(21
)
Changes in cash from operating assets
and liabilities:
Accounts receivable
(247
)
(134
)
Inventories and other current assets
(94
)
17
Income taxes
8
(3
)
Accounts payable, accrued expenses and
other current liabilities
36
(152
)
Other long-term liabilities
3
(102
)
Payments for restructuring charges,
acquisition-related costs, and litigation costs and
settlements
(192
)
(163
)
Net cash used in operating activities
from discontinued operations, excluding income taxes
(5
)
(5
)
Net cash provided by operating
activities
1,233
1,049
Cash flows from investing
activities:
Purchases of property and equipment —
continuing operations
(670
)
(617
)
Purchases of businesses or joint venture
interests, net of cash acquired
(25
)
(113
)
Proceeds from sales of facilities and
other assets — continuing operations
63
543
Proceeds from sales of facilities and
other assets — discontinued operations
17
—
Proceeds from sales of marketable
securities, long-term investments and other assets
82
199
Purchases of marketable securities and
equity investments
(62
)
(148
)
Other long-term assets
(24
)
15
Other items, net
—
6
Net cash used in investing
activities
(619
)
(115
)
Cash flows from financing
activities:
Repayments of borrowings under credit
facility
(2,640
)
(950
)
Proceeds from borrowings under credit
facility
2,640
950
Repayments of other borrowings
(6,131
)
(312
)
Proceeds from other borrowings
5,719
23
Debt issuance costs
(70
)
—
Distributions paid to noncontrolling
interests
(307
)
(288
)
Proceeds from sale of noncontrolling
interests
21
20
Purchases of noncontrolling interests
(11
)
(647
)
Proceeds from exercise of stock options
and employee stock purchase plan
12
16
Other items, net
4
54
Net cash used in financing
activities
(763
)
(1,134
)
Net decrease in cash and cash
equivalents
(149
)
(200
)
Cash and cash equivalents at beginning of
period
411
611
Cash and cash equivalents at end of
period
$
262
$
411
Supplemental disclosures:
Interest paid, net of capitalized
interest
$
(946
)
$
(976
)
Income tax payments, net
$
(12
)
$
(25
)
TENET HEALTHCARE
CORPORATION
SEGMENT REPORTING
(Unaudited)
(Dollars in millions)
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Net operating revenues:
Hospital Operations and other total prior
to inter-segment eliminations(1)
$
3,983
$
3,843
$
15,522
$
15,285
Ambulatory Care
632
554
2,158
2,085
Conifer
Tenet
141
150
573
590
Other clients
191
222
799
943
Total Conifer revenues
332
372
1,372
1,533
Inter-segment eliminations
(141
)
(150
)
(573
)
(590
)
Total
$
4,806
$
4,619
$
18,479
$
18,313
Equity in earnings of unconsolidated
affiliates:
Hospital Operations and other
$
3
$
4
$
15
$
10
Ambulatory Care
58
49
160
140
Total
$
61
$
53
$
175
$
150
Adjusted EBITDA:
Hospital Operations and other(2)
$
407
$
352
$
1,425
$
1,411
Ambulatory Care
304
245
895
792
Conifer
94
87
386
357
Total
$
805
$
684
$
2,706
$
2,560
Capital expenditures:
Hospital Operations and other
$
149
$
184
$
572
$
527
Ambulatory Care
18
22
75
68
Conifer
11
7
23
22
Total
$
178
$
213
$
670
$
617
(1)
Hospital Operations and other revenues
includes health plan revenues of $1 million and $14 million for the
twelve months ended December 31, 2019 and 2018, respectively.
(2)
Hospital Operations and other Adjusted
EBITDA excludes health plan EBITDA of $(2) million and $9 million
for the twelve months ended December 31, 2019 and 2018,
respectively.
TENET HEALTHCARE
CORPORATION
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
4th Qtr
Full Year
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
2
$
(232
)
Net income from discontinued
operations
—
11
Net income (loss) from continuing
operations
2
(243
)
Less: Impairment and restructuring
charges, and acquisition-related costs
(84
)
(185
)
Litigation and investigation costs
(26
)
(141
)
Net losses on sales, consolidation and
deconsolidation of facilities
(12
)
(15
)
Loss from early extinguishment of debt
—
(227
)
Loss from divested and closed
businesses
—
(2
)
Noncontrolling interest impact
—
4
Tax impact of above items
19
42
Adjusted net income available from
continuing operations to common shareholders
$
105
$
281
Diluted earnings (loss) per share from
continuing operations
$
0.02
$
(2.35
)
Less: Impairment and restructuring
charges, and acquisition-related costs
(0.79
)
(1.76
)
Litigation and investigation costs
(0.25
)
(1.34
)
Net losses on sales, consolidation and
deconsolidation of facilities
(0.11
)
(0.14
)
Loss from early extinguishment of debt
—
(2.16
)
Loss from divested and closed
businesses
—
(0.02
)
Noncontrolling interest impact
—
0.04
Tax impact of above items
0.18
0.40
Adjusted diluted earnings per share
from continuing operations
$
0.99
$
2.68
Weighted average basic shares
outstanding (in thousands)
104,048
103,398
Weighted average dilutive shares
outstanding (in thousands)
105,666
104,855
TENET HEALTHCARE
CORPORATION
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 2018
(Unaudited)
(Dollars in millions except per share
amounts)
2018
4th Qtr
Full Year
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(5
)
$
111
Net income from discontinued
operations
—
3
Net income (loss) from continuing
operations
(5
)
108
Less: Impairment and restructuring
charges, and acquisition-related costs
(86
)
(209
)
Litigation and investigation costs
(10
)
(38
)
Net gains on sales, consolidation and
deconsolidation of facilities
16
127
Gain from early extinguishment of debt
3
1
Income from divested and closed
businesses
—
9
Tax impact of above items
19
25
Adjusted net income available from
continuing operations to common shareholders
$
53
$
193
Diluted earnings (loss) per share from
continuing operations
$
(0.05
)
$
1.04
Less: Impairment and restructuring
charges, and acquisition-related costs
(0.83
)
(2.01
)
Litigation and investigation costs
(0.10
)
(0.37
)
Net gains on sales, consolidation and
deconsolidation of facilities
0.15
1.22
Gain from early extinguishment of debt
0.03
0.01
Income from divested and closed
businesses
—
0.09
Tax impact of above items
0.18
0.24
Adjusted diluted earnings per share
from continuing operations
$
0.51
$
1.86
Weighted average basic shares
outstanding (in thousands)
102,501
102,110
Weighted average dilutive shares
outstanding (in thousands)
104,118
103,881
TENET HEALTHCARE
CORPORATION
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
4th Qtr
Full Year
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
2
(232
)
Less: Net income available to
noncontrolling interests
(127
)
(386
)
Income from discontinued operations, net
of tax
—
11
Income from continuing operations
129
143
Income tax expense
(86
)
(153
)
Loss from early extinguishment of debt
—
(227
)
Other non-operating expense, net
(2
)
(5
)
Interest expense
(243
)
(985
)
Operating income
460
1,513
Litigation and investigation costs
(26
)
(141
)
Net losses on sales, consolidation and
deconsolidation of facilities
(12
)
(15
)
Impairment and restructuring charges, and
acquisition-related costs
(84
)
(185
)
Depreciation and amortization
(223
)
(850
)
Loss from divested and closed
businesses
—
(2
)
Adjusted EBITDA
$
805
$
2,706
Net operating revenues
$
4,806
$
18,479
Less: Net operating revenues from health
plans
—
1
Adjusted net operating revenues
$
4,806
$
18,478
Net income available (loss
attributable) to Tenet Healthcare Corporation common shareholders
as a % of net operating revenues
—
%
(1.3
)%
Adjusted EBITDA as a % of adjusted net
operating revenues (Adjusted EBITDA margin)
16.7
%
14.6
%
TENET HEALTHCARE
CORPORATION
Additional Supplemental
Non-GAAP disclosures
Table #2 – Reconciliation of
Net Income Available (Loss Attributable) to Tenet Healthcare
Corporation Common Shareholders to Adjusted EBITDA for 2018
(Unaudited)
(Dollars in millions)
2018
4th Qtr
Full Year
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(5
)
$
111
Less: Net income available to
noncontrolling interests
(107
)
(355
)
Income from discontinued operations, net
of tax
—
3
Income from continuing operations
102
463
Income tax expense
(56
)
(176
)
Gain from early extinguishment of debt
3
1
Other non-operating expense, net
(3
)
(5
)
Interest expense
(246
)
(1,004
)
Operating income
404
1,647
Litigation and investigation costs
(10
)
(38
)
Net gains on sales, consolidation and
deconsolidation of facilities
16
127
Impairment and restructuring charges, and
acquisition-related costs
(86
)
(209
)
Depreciation and amortization
(200
)
(802
)
Income from divested and closed
businesses
—
9
Adjusted EBITDA
$
684
$
2,560
Net operating revenues
$
4,619
$
18,313
Less: Net operating revenues from health
plans
—
14
Adjusted net operating revenues
$
4,619
$
18,299
Net income available (loss
attributable) to Tenet Healthcare Corporation common shareholders
as a % of net operating revenues
(0.1
)%
0.6
%
Adjusted EBITDA as a % of adjusted net
operating revenues (Adjusted EBITDA margin)
14.8
%
14.0
%
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)
2019
4th Qtr
Full Year
Net cash provided by operating
activities
$
520
$
1,233
Purchases of property and equipment
(178
)
(670
)
Free cash flow
$
342
$
563
Net cash used in investing
activities
$
(193
)
$
(619
)
Net cash used in financing
activities
$
(379
)
$
(763
)
Net cash provided by operating
activities
$
520
$
1,233
Less: Payments for restructuring charges,
acquisition-related costs, and litigation costs and settlements
(56
)
(192
)
Net cash used in operating activities from
discontinued operations
(1
)
(5
)
Adjusted net cash provided by operating
activities from continuing operations
577
1,430
Purchases of property and equipment
(178
)
(670
)
Adjusted free cash flow – continuing
operations
$
399
$
760
(Dollars in millions)
2018
4th Qtr
Full Year
Net cash provided by operating
activities
$
250
$
1,049
Purchases of property and equipment
(213
)
(617
)
Free cash flow
$
37
$
432
Net cash used in investing
activities
$
(235
)
$
(115
)
Net cash used in financing
activities
$
(104
)
$
(1,134
)
Net cash provided by operating
activities
$
250
$
1,049
Less: Payments for restructuring charges,
acquisition-related costs, and litigation costs and settlements
(50
)
(163
)
Net cash used in operating activities from
discontinued operations
(1
)
(5
)
Adjusted net cash provided by operating
activities from continuing operations
301
1,217
Purchases of property and equipment
(213
)
(617
)
Adjusted free cash flow – continuing
operations
$
88
$
600
TENET HEALTHCARE
CORPORATION
Additional Supplemental
Non-GAAP disclosures
Table #4 – Reconciliation of
Outlook Net Income Available (Loss Attributable) to Tenet
Healthcare Corporation Common Shareholders to Outlook Adjusted
EBITDA
(Unaudited)
(Dollars in millions)
Q1 2020
2020
Low
High
Low
High
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(7
)
$
37
$
130
$
245
Less: Net income available to
noncontrolling interests
(90
)
(100
)
(450
)
(470
)
Income tax expense
(17
)
(33
)
(190
)
(210
)
Interest expense
(250
)
(240
)
(985
)
(975
)
Other non-operating expense, net
(5
)
—
(5
)
5
Impairment and restructuring charges,
acquisition-related costs, and litigation costs and
settlements(1)
(60
)
(50
)
(175
)
(125
)
Depreciation and amortization
(205
)
(215
)
(845
)
(865
)
Loss from divested and closed
businesses
(5
)
—
(5
)
—
Adjusted EBITDA
$
625
$
675
$
2,785
$
2,885
Income (loss) from continuing
operations
$
(7
)
$
37
$
130
$
245
Net operating revenues
$
4,600
$
4,800
$
19,100
$
19,500
Income from continuing operations as a
% of operating revenues
(0.2
)%
0.8
%
0.7
%
1.3
%
Adjusted EBITDA as a % of net operating
revenues (Adjusted EBITDA margin)
13.6
%
14.1
%
14.6
%
14.8
%
(1)
The Company has provided an estimate of
restructuring charges it anticipates in 2020. The Company does not
generally forecast impairment charges, acquisition-related costs,
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.
TENET HEALTHCARE
CORPORATION
Additional Supplemental
Non-GAAP disclosures
Table #5 – Reconciliation of
Outlook Net Income Available (Loss Attributable) to Tenet
Healthcare Corporation Common Shareholders to Outlook Adjusted Net
Income Available from Continuing Operations to Common
Shareholders
(Unaudited)
(Dollars in millions except per share
amounts)
Q1 2020
2020
Low
High
Low
High
Net income available (loss
attributable) to Tenet Healthcare Corporation common
shareholders
$
(7
)
$
37
$
130
$
245
Less: Impairment and restructuring
charges, acquisition-related costs, and litigation costs and
settlements
(60
)
(50
)
(175
)
(125
)
Loss from divested and closed
businesses
(5
)
—
(5
)
—
Tax impact of above items
13
7
25
15
Noncontrolling interests impact of above
items
—
—
—
—
Adjusted net income available from
continuing operations to common shareholders
$
45
$
80
$
285
$
355
Diluted earnings (loss) per share from
continuing operations
$
(0.07
)
$
0.35
$
1.23
$
2.31
Less: Impairment and restructuring
charges, acquisition-related costs, and litigation costs and
settlements
(0.57
)
(0.47
)
(1.65
)
(1.18
)
Loss from divested and closed
businesses
(0.05
)
—
(0.05
)
—
Tax impact of above items
0.12
0.07
0.24
0.14
Noncontrolling interests impact of above
items
—
—
—
—
Adjusted diluted earnings per share
from continuing operations
$
0.42
$
0.75
$
2.69
$
3.35
Weighted average basic shares
outstanding (in thousands)
104,000
104,000
105,000
105,000
Weighted average dilutive shares
outstanding (in thousands)
106,000
106,000
106,000
106,000
TENET HEALTHCARE
CORPORATION
Additional Supplemental
Non-GAAP disclosures
Table #6 – Reconciliation of
Outlook Net Cash Provided by Operating Activities to Outlook
Adjusted Free Cash Flow from Continuing Operations
(Dollars in millions)
2020
Low
High
Net cash provided by operating
activities
$
1,250
$
1,525
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
1,475
1,725
Purchases of property and equipment –
continuing operations
(700
)
(750
)
Adjusted free cash flow – continuing
operations(2)
$
775
$
975
(1)
The Company has provided an estimate of
payments that it anticipates in 2020 related to restructuring
charges as well as litigation costs and settlements. The Company
does not generally forecast payments related to 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 may be 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200224005922/en/
Investor Contact Regina Nethery 469-893-2387
regina.nethery@tenethealth.com Media Contact Lesley Bogdanow
469-893-2640 mediarelations@tenethealth.com
Tenet Healthcare (NYSE:THC)
Historical Stock Chart
From Apr 2024 to May 2024
Tenet Healthcare (NYSE:THC)
Historical Stock Chart
From May 2023 to May 2024