Tenet Healthcare Corporation THC reported Adjusted EBITDA of $613 million for the fourth quarter of 2015, a decrease of $33 million, or 5.1 percent, compared to $646 million in the fourth quarter of 2014. After normalizing for timing differences related to the California Provider Fee program, Adjusted EBITDA increased $91 million or 17.4 percent.
"We delivered Adjusted EBITDA at the midpoint of our Outlook for the fourth quarter and are on a path to deliver strong growth in Adjusted EBITDA and improved Adjusted Free Cash Flow in 2016," said Trevor Fetter, chairman and chief executive officer. "Similar to our results in the third quarter, we experienced pressure on lower acuity inpatient hospital admissions and continued to drive increases in higher-acuity admissions. Our Conifer Health Solutions and United Surgical Partners subsidiaries performed well, with Conifer meeting our expectations and USPI delivering stronger-than-expected results in the fourth quarter."
Hospital Operations and Other Segment
Results for the fourth quarter of 2015 were impacted by the timing of revenue related to the California Provider Fee program as discussed further below.
During the fourth quarter of 2015, net operating revenue in the hospital operations and other segment increased 5.0 percent to $4.423 billion, up from $4.213 billion in the fourth quarter of 2014. On a same-hospital basis, net patient revenue increased 0.7 percent to $3.992 billion, up from $3.966 billion in the fourth quarter of 2014. The increase was driven by a 0.3 percent increase in adjusted patient admissions and a 0.3 percent increase in net patient revenue per adjusted admission.
The increases in both same-hospital revenue and same-hospital revenue per adjusted admission in the fourth quarter of 2015 were negatively impacted by timing differences related to the California Provider Fee program. On a same-hospital basis, during both calendar year 2014 and the fourth quarter of 2014, the hospital segment recorded $150 million of revenue related to the California Provider Fee program, of which approximately $112 million was related to the first nine months of 2014 since the program was not approved until the fourth quarter of 2014. During 2015, Tenet recorded $166 million of revenue related to the California Provider Fee program on a same-hospital basis, including $42 million in the fourth quarter of 2015. After adjusting for the approximately $112 million of out-of-period revenue related to the California Provider Fee program in the fourth quarter of 2014, same-hospital net patient revenue per adjusted admission increased 3.2 percent in the fourth quarter of 2015.
During 2015, net operating revenue in the hospital operations and other segment increased 8.0 percent to $16.928 billion, up from $15.681 billion in 2014. On a same-hospital basis, net patient revenue increased 5.5 percent to $15.709 billion, up from $14.886 billion in 2014. The increase was driven by a 2.4 percent increase in adjusted patient admissions and a 3.1 percent increase in net patient revenue per adjusted admission.
Fourth quarter Adjusted EBITDA in Tenet's hospital segment was $394 million, representing a decline of 28.8 percent as compared to $553 million in the fourth quarter of 2014. During both calendar year 2014 and the fourth quarter of 2014, the hospital segment recorded $165 million of revenue related to the California Provider Fee program, of which, $124 million was related to the first nine months of 2014 since the program was not approved until the fourth quarter of 2014. During calendar year 2015 and the fourth quarter of 2015, the hospital segment recorded $188 million and $49 million, respectively, of revenue related to the California Provider Fee program. After adjusting for timing differences related to the California Provider Fee, Adjusted EBITDA in the hospital segment during the fourth quarter of 2015 decreased 8.2 percent to $394 million.
During 2015, Adjusted EBITDA in the hospital segment increased 0.1 percent to $1.653 billion, up from $1.651 billion in 2014.
Total hospital selected operating expenses, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 1.4 percent per adjusted admission in the quarter. The company continued to deliver improvements in contract labor expense, with a 9.4 percent decline in same hospital contract labor per adjusted admission in the fourth quarter.
Medicaid and Exchanges
Uninsured plus charity admissions declined by 187 admissions, or 1.8 percent on a same hospital basis in the fourth quarter of 2015. Medicaid admissions decreased by 703 admissions, or 1.3 percent in the fourth quarter. Same-hospital uninsured plus charity outpatient visits declined by 5,135 visits, or 3.2 percent, and Medicaid outpatient visits increased by 4,105 visits, or 0.7 percent in the fourth quarter.
In Tenet's six Medicaid expansion states, same-hospital uninsured plus charity admissions declined by 187 admissions, or 11.1 percent, and Medicaid admissions increased by 287 admissions, or 1.0 percent in the fourth quarter of 2015. Uninsured plus charity outpatient visits decreased by 1,615 visits, or 3.5 percent, and Medicaid outpatient visits grew by 2,946 visits, or 0.8 percent in the fourth quarter. The six states are comprised of five states that expanded Medicaid in 2014 (Arizona, California, Illinois, Massachusetts and Michigan) and one state that expanded Medicaid in 2015 (Pennsylvania).
Tenet's same-hospital exchange admissions were 4,734 in the fourth quarter of 2015, up 27.0 percent from the fourth quarter of 2014. Same-hospital exchange outpatient visits were 44,616 in the fourth quarter of 2015, up 45.6 percent from the fourth quarter of 2014.
Uncompensated Care
Tenet's bad debt expense ratio was 7.2 percent of revenues before bad debt in the fourth quarter of 2015, down from 7.4 percent in the fourth quarter of 2014. Including $1.029 billion and $920 million of charity care write-offs and uninsured discounts that were offered through Tenet's Compact with Uninsured Patients in the fourth quarters of 2015 and 2014, respectively, Tenet's uncompensated care was $1.420 billion and $1.275 billion, respectively, in these periods. As a percentage of adjusted revenue, uncompensated care represented 22.0 percent of adjusted revenue in the fourth quarter of 2015, down from 22.2 percent in the fourth quarter of 2014. Nearly all of Tenet's uncompensated care is associated with the hospital segment.
Ambulatory Segment
The results of many of the facilities in which the Ambulatory segment has an investment are not consolidated by Tenet or USPI. To help analyze results of operations, management uses system-wide measures which include revenues and cases of both consolidated and unconsolidated facilities. Tenet's acquisition of a majority interest in USPI and all of Aspen on June 16, 2015 makes the year-over-year comparisons less meaningful. In order to improve comparability, Tenet is presenting the results for the ambulatory segment on a pro forma basis, including the results of USPI and Aspen in each comparable period.
During the fourth quarter of 2015, on a pro forma basis, the ambulatory segment delivered net operating revenue of $397 million, representing an increase of 28.9 percent as compared to $308 million in the fourth quarter of 2014. During 2015, on a pro forma basis, the ambulatory segment delivered net operating revenue of $1.343 billion, representing an increase of 17.8 percent as compared to $1.140 billion of revenue in 2014.
On a pro forma same-facility system-wide basis in the fourth quarter of 2015, revenue in the ambulatory segment increased 12.5 percent, with cases increasing 6.9 percent and revenue per case increasing 5.2 percent.
During the fourth quarter of 2015, on a pro forma basis, Tenet's ambulatory segment delivered Adjusted EBITDA of $158 million, up 17.9 percent from $134 million in the fourth quarter of 2014. After subtracting $48 million and $33 million of net income attributable to noncontrolling interests in the fourth quarters of 2015 and 2014, respectively, and prior to subtracting additional noncontrolling interest related to Welsh Carson's and other pre-existing USPI shareholders 49.9 percent ownership interest in the USPI joint venture, Adjusted EBITDA less NCI increased 8.9 percent to $110 million in the fourth quarter of 2015, up from $101 million in the fourth quarter of 2014. After subtracting $69 million and $49 million of Adjusted net income attributable to noncontrolling interests in the fourth quarters of 2015 and 2014, respectively, Adjusted EBITDA less NCI increased 4.7 percent to $89 million in the fourth quarter of 2015, up from $85 million in the fourth quarter of 2014. The Adjusted net income attributable to noncontrolling interests in the fourth quarter of 2015 excludes $16 million of net income attributable to noncontrolling interests recorded during the quarter related to $32 million of gains on the consolidation and deconsolidation of certain businesses.
During 2015, on a pro forma basis, the ambulatory segment delivered Adjusted EBITDA of $489 million, up 14.5 percent from $427 million in 2014. After subtracting $137 million and $112 million of net income attributable to noncontrolling interests in 2015 and 2014, respectively, and prior to subtracting additional noncontrolling interest related to Welsh Carson's and other pre-existing USPI shareholders 49.9 percent ownership interest in the USPI joint venture, Adjusted EBITDA less NCI increased 11.7 percent to $352 million in 2015, up from $315 million in 2014. After subtracting $206 million and $150 million of net income attributable to noncontrolling interests in 2015 and 2014, respectively, Adjusted EBITDA less NCI increased 2.2 percent to $283 million in 2015, up from $277 million in 2014. After adjusting for the additional $16 million of net income attributable to noncontrolling interests that was recorded in the fourth quarter of 2015, Adjusted EBITDA Less NCI in the ambulatory segment increased 7.9 percent in 2015.
Conifer Segment
During the fourth quarter of 2015, Conifer's revenue increased 17.4 percent to $384 million, up from $327 million. Conifer's revenue increased 18.4 percent during 2015 to $1.413 billion, up from $1.193 billion in 2014. Excluding revenue from Tenet, Conifer's revenue from other third party customers increased by 27.2 percent to $206 million in the fourth quarter of 2015 and by 24.1 percent to $747 million in 2015.
In the fourth quarter of 2015, Conifer generated $61 million of Adjusted EBITDA, down 4.7 percent versus $64 million in the fourth quarter of 2014. During 2015, Conifer delivered Adjusted EBITDA of $265 million, up 30.5 percent from $203 million in 2014.
Net Income and Earnings Per Diluted Share
During the fourth quarter of 2015, Tenet generated Adjusted net income from continuing operations of $35 million, or $0.35 per diluted share. This excludes $135 million, or $1.36 per diluted share, in after-tax items such as impairment charges, restructuring charges, acquisition-related costs, litigation and investigation costs, the loss from the early extinguishment of debt, and gains on sales, consolidation and deconsolidation of facilities. During the fourth quarter of 2014, the company generated adjusted net income from continuing operations of $104 million, or $1.03 per diluted share, excluding the comparable items that totaled $43 million after-tax, or $0.42 per diluted share.
During 2015, Tenet generated Adjusted net income from continuing operations of $208 million, or $2.05 per diluted share. This excludes $350 million, or $3.48 per diluted share, in after-tax items such as impairment charges, restructuring charges, acquisition-related costs, litigation and investigation costs, the loss from the early extinguishment of debt, and gains on sales, consolidation and deconsolidation of facilities. During 2014, the company generated adjusted net income from continuing operations of $145 million, or $1.45 per diluted share, excluding the comparable items that totaled $111 million after-tax, or $1.11 per diluted share.
On a GAAP basis in the fourth quarter of 2015, including the results of both continuing and discontinued operations, Tenet reported a net loss attributable to common shareholders of $97 million, or $0.98 per diluted share, compared to net income of $61 million, or $0.61 per diluted share, in the fourth quarter of 2014. On a GAAP basis in 2015, including the results of both continuing and discontinued operations, Tenet reported a net loss attributable to common shareholders of $140 million, or $1.41 per diluted share, compared to net income of $12 million, or $0.12 per diluted share, in 2014.
Cash Flow and Liquidity
Cash and cash equivalents were $356 million at December 31, 2015 compared to $193 million at December 31, 2014. Tenet's cash and debt balances as of December 31, 2015 reflect the cash proceeds that the company received from the sale of two hospitals in North Carolina, the sale of a majority position in four hospitals in Dallas, and the related changes that these transactions had on Tenet's balance sheet. The company ended 2015 with no outstanding borrowings on its $1 billion credit line.
Accounts receivable days outstanding were 49.5 at December 31, 2015, representing no change from September 30, 2015 or December 31, 2014. Adjusted net cash provided by operating activities in 2015 was $1.247 billion, representing a 42.0 percent increase compared to $878 million in 2014. After subtracting $842 million and $933 million of capital expenditures in 2015 and 2014, respectively, Adjusted Free Cash Flow was $405 million in 2015, up from an outflow of $55 million in 2014.
Tenet repurchased $40 million of stock during the fourth quarter. As of December 31, 2015, the company had $460 million of remaining authorization under the previously announced $500 million share repurchase program. The repurchase program will expire on December 31, 2016 and may be suspended for periods or discontinued at any time.
Increase in Litigation Reserves
In the three months ended December 31, 2015, the Company increased its aggregate reserve for the Clinica de la Mama criminal investigation and civil litigation from $20 million to $238 million to reflect an offer it made in February 2016 to resolve the matter. This amount is reflected in the consolidated balance sheet as of December 31, 2015 as accrued legal settlement costs. The $218 million reserve increase lowered net income by approximately $184 million or $1.86 per diluted share during the fourth quarter of 2015. As previously disclosed, the Company commenced discussions in January 2016 with the U.S. Department of Justice and the State of Georgia regarding potential resolution of these matters. For additional information, see Note 15 to the Consolidated Financial Statements included in the Company's Form 10-K for the year ended December 31, 2015.
Outlook
During 2016, Tenet expects to deliver revenue of $18.8 billion to $19.2 billion, Adjusted EBITDA of $2.4 billion to $2.5 billion, and Adjusted earnings per diluted share of $1.18 to $2.25. The Outlook for EPS in calendar year 2016 assumes net income attributable to noncontrolling interests of $310 million to $330 million and an average diluted share count of 102 million.
During 2016, Tenet expects to deliver Adjusted Free Cash Flow of $400 million to $600 million, compared to $405 million in 2015, and anticipates additional improvement in Adjusted Free Cash Flow in 2017. The Outlook for Adjusted Free Cash Flow in 2016 is based on an Outlook of $1.300 billion to $1.450 billion of Adjusted Net Cash Provided by Operating Activities less $850 million to $900 million of capital expenditures. In addition, the company anticipates making cash distributions to noncontrolling interests of $220 million to $240 million in 2016.
During the first quarter of 2016, Tenet expects to deliver revenue of $4.7 billion to $4.9 billion, Adjusted EBITDA of $550 million to $600 million and Adjusted earnings per diluted share of $0.05 to $0.54 assuming an average diluted share count of 101 million.
Additional details on Tenet's Outlook for both the first quarter and calendar year 2016 are available in Tables 3, 4 and 5 at the end of this press release and in an accompanying slide presentation that is accessible through the company's website at www.tenethealth.com/investors.
Management's Webcast Discussion of Fourth Quarter Results
Tenet management will discuss the Company's fourth quarter 2015 results on a webcast scheduled for 10:00 a.m. EST (9:00 a.m. CST) on February 23, 2016. Investors can access the webcast through Tenet's website at www.tenethealth.com/investors. A set of slides, which will be referred to on the conference call, is available on the Quarterly Results section of the Company's website.
Additional information regarding Tenet's quarterly results of operations is contained in its Form 10-K report for the year ended December 31, 2015, which will be filed with the Securities and Exchange Commission and posted on the Tenet website before the webcast. This press release includes certain non-GAAP measures, such as Adjusted EBITDA. A reconciliation of Adjusted EBITDA to net income attributable to Tenet common shareholders is included in the financial tables at the end of this release.
Tenet Healthcare Corporation is a diversified healthcare services company with more than 130,000 employees united around a common mission: to help people live happier, healthier lives. Through its subsidiaries, partnerships and joint ventures, including United Surgical Partners International, the company operates 84 general acute care hospitals, 20 short-stay surgical hospitals and over 470 outpatient centers in the United States, as well as nine facilities in the United Kingdom. Tenet's Conifer Health Solutions subsidiary provides technology-enabled performance improvement and health management solutions to hospitals, health systems, integrated delivery networks, physician groups, self-insured organizations and health plans. For more information, please visit www.tenethealth.com.
The terms "THC," "Tenet Healthcare Corporation," "the company," "we," "us" or "our" refer to Tenet Healthcare Corporation or one or more of its subsidiaries or affiliates as applicable.
This release contains "forward-looking statements" – that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "assume," "anticipate," "intend," "plan," "believe," "seek," "see," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause our actual results to be materially different than those expressed in our 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, 2015 and other filings with the Securities and Exchange Commission. Among other things, these factors include adverse regulatory developments, government investigations or litigation, including any significant monetary resolution or other undesirable consequences of the Clinica de la Mama qui tam action and criminal investigation described in Note 15 to the Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2015. The terms of a final resolution, if any, of the Clinica de la Mama matter may require us to pay significant fines and penalties and give rise to other costs or adverse consequences that materially exceed the reserve we have established and could have a material adverse effect on our business, financial condition, results of operations or cash flows.
Tenet uses its company website to provide important information to investors about the company including the posting of important announcements regarding financial performance and corporate developments.
| TENET HEALTHCARE CORPORATION | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (Dollars in millions except per share amounts) | Three Months Ended December 31, | ||||||||||||||||
| 2015 | % | 2014 | % | Change | |||||||||||||
| Net operating revenues: | |||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 5,417 | $ | 4,821 | 12.4 | % | |||||||||||
| Less: Provision for doubtful accounts | 391 | 356 | 9.8 | % | |||||||||||||
| Net operating revenues | 5,026 | 100.0 | % | 4,465 | 100.0 | % | 12.6 | % | |||||||||
| Equity in earnings of unconsolidated affiliates | 51 | 1.0 | % | 3 | 0.1 | % | 1,600.0 | % | |||||||||
| Operating expenses: | |||||||||||||||||
| Salaries, wages and benefits | 2,443 | 48.6 | % | 2,118 | 47.5 | % | 15.3 | % | |||||||||
| Supplies | 817 | 16.3 | % | 688 | 15.4 | % | 18.8 | % | |||||||||
| Other operating expenses, net | 1,230 | 24.5 | % | 1,048 | 23.5 | % | 17.4 | % | |||||||||
| Electronic health record incentives | (26 | ) | (0.5 | )% | (32 | ) | (0.7 | )% | (18.8 | )% | |||||||
| Depreciation and amortization | 208 | 4.1 | % | 240 | 5.4 | % | |||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 52 | 1.0 | % | 63 | 1.4 | % | |||||||||||
| Litigation and investigation costs | 224 | 4.5 | % | 6 | 0.1 | % | |||||||||||
| Gains on sales, consolidation and deconsolidation of facilities | (186 | ) | (3.7 | )% | — | ||||||||||||
| Operating income | 315 | 6.3 | % | 337 | 7.5 | % | |||||||||||
| Interest expense | (248 | ) | (196 | ) | |||||||||||||
| Loss from early extinguishment of debt | (1 | ) | — | ||||||||||||||
| Investment earnings | 1 | — | |||||||||||||||
| Net income from continuing operations, before income taxes | 67 | 141 | |||||||||||||||
| Income tax expense | (68 | ) | (60 | ) | |||||||||||||
| Net income (loss) from continuing operations, before discontinued operations | (1 | ) | 81 | ||||||||||||||
| Discontinued operations: | |||||||||||||||||
| Loss from operations | (1 | ) | — | ||||||||||||||
| Litigation and investigation costs | 5 | — | |||||||||||||||
| Income tax expense | (1 | ) | — | ||||||||||||||
| Net income from discontinued operations | 3 | — | |||||||||||||||
| Net income | 2 | 81 | |||||||||||||||
| Less: Net income attributable to noncontrolling interests | 99 | 20 | |||||||||||||||
| Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ | (97 | ) | $ | 61 | ||||||||||||
| Amounts available (attributable) to Tenet Healthcare Corporation common shareholders | |||||||||||||||||
| Net income (loss) from continuing operations, net of tax | $ | (100 | ) | $ | 61 | ||||||||||||
| Net income from discontinued operations, net of tax | 3 | — | |||||||||||||||
| Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ | (97 | ) | $ | 61 | ||||||||||||
| Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders: | |||||||||||||||||
| Basic | $ | (1.01 | ) | $ | 0.62 | ||||||||||||
| Continuing operations | 0.03 | — | |||||||||||||||
| $ | (0.98 | ) | $ | 0.62 | |||||||||||||
| Diluted | |||||||||||||||||
| Continuing operations | $ | (1.01 | ) | $ | 0.61 | ||||||||||||
| Discontinued operations | 0.03 | — | |||||||||||||||
| $ | (0.98 | ) | $ | 0.61 | |||||||||||||
| Weighted average shares and dilutive securities outstanding (in thousands): | |||||||||||||||||
| Basic | 99,188 | 98,331 | |||||||||||||||
| Diluted* | 99,188 | 101,279 | |||||||||||||||
*Had we generated income from continuing operations in the three months ended December 31, 2015 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 2,173 shares.
| TENET HEALTHCARE CORPORATION | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (Dollars in millions except per share amounts) | Years Ended December 31, | ||||||||||||||||
| 2015 | % | 2014 | % | Change | |||||||||||||
| Net operating revenues: | |||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 20,111 | $ | 17,908 | 12.3 | % | |||||||||||
| Less: Provision for doubtful accounts | 1,477 | 1,305 | 13.2 | % | |||||||||||||
| Net operating revenues | 18,634 | 100.0 | % | 16,603 | 100.0 | % | 12.2 | % | |||||||||
| Equity in earnings of unconsolidated affiliates | 99 | 0.5 | % | 12 | 0.1 | % | 725.0 | % | |||||||||
| Operating expenses: | |||||||||||||||||
| Salaries, wages and benefits | 9,011 | 48.4 | % | 8,023 | 48.3 | % | 12.3 | % | |||||||||
| Supplies | 2,963 | 15.9 | % | 2,630 | 15.8 | % | 12.7 | % | |||||||||
| Other operating expenses, net | 4,555 | 24.4 | % | 4,114 | 24.8 | % | 10.7 | % | |||||||||
| Electronic health record incentives | (72 | ) | (0.4 | )% | (104 | ) | (0.6 | )% | (30.8 | )% | |||||||
| Depreciation and amortization | 797 | 4.3 | % | 849 | 5.1 | % | |||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 318 | 1.7 | % | 153 | 0.9 | % | |||||||||||
| Litigation and investigation costs | 291 | 1.6 | % | 25 | 0.2 | % | |||||||||||
| Gains on sales, consolidation and deconsolidation of facilities | (186 | ) | (1.0 | )% | — | — | % | ||||||||||
| Operating income | 1,056 | 5.7 | % | 925 | 5.6 | % | |||||||||||
| Interest expense | (912 | ) | (754 | ) | |||||||||||||
| Loss from early extinguishment of debt | (1 | ) | (24 | ) | |||||||||||||
| Investment earnings | 1 | — | |||||||||||||||
| Net income from continuing operations, before income taxes | 144 | 147 | |||||||||||||||
| Income tax expense | (68 | ) | (49 | ) | |||||||||||||
| Net income from continuing operations, before discontinued operations | 76 | 98 | |||||||||||||||
| Discontinued operations: | |||||||||||||||||
| Loss from operations | (5 | ) | (17 | ) | |||||||||||||
| Litigation and investigation costs | 8 | (18 | ) | ||||||||||||||
| Income tax benefit (expense) | (1 | ) | 13 | ||||||||||||||
| Net income (loss) from discontinued operations | 2 | (22 | ) | ||||||||||||||
| Net income | 78 | 76 | |||||||||||||||
| Less: Net income attributable to noncontrolling interests | 218 | 64 | |||||||||||||||
| Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ | (140 | ) | $ | 12 | ||||||||||||
| Amounts available (attributable) to Tenet Healthcare Corporation common shareholders | |||||||||||||||||
| Net income (loss) from continuing operations, net of tax | $ | (142 | ) | $ | 34 | ||||||||||||
| Net income (loss) from discontinued operations, net of tax | 2 | (22 | ) | ||||||||||||||
| Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ | (140 | ) | $ | 12 | ||||||||||||
| Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders: | |||||||||||||||||
| Basic | |||||||||||||||||
| Continuing operations | $ | (1.43 | ) | $ | 0.35 | ||||||||||||
| Discontinued operations | 0.02 | (0.23 | ) | ||||||||||||||
| $ | (1.41 | ) | $ | 0.12 | |||||||||||||
| Diluted | |||||||||||||||||
| Continuing operations | $ | (1.43 | ) | $ | 0.34 | ||||||||||||
| Discontinued operations | 0.02 | (0.22 | ) | ||||||||||||||
| $ | (1.41 | ) | $ | 0.12 | |||||||||||||
| Weighted average shares and dilutive securities outstanding (in thousands): | |||||||||||||||||
| Basic | 99,167 | 97,801 | |||||||||||||||
| Diluted* | 99,167 | 100,287 | |||||||||||||||
*Had we generated income from continuing operations in the twelve months ended December 31, 2015 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 2,380 shares.
| TENET HEALTHCARE CORPORATION | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited) | ||||||||
| December 31, | December 31, | |||||||
| (Dollars in millions) | 2015 | 2014 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 356 | $ | 193 | ||||
| Accounts receivable, less allowance for doubtful accounts | 2,704 | 2,404 | ||||||
| Inventories of supplies, at cost | 309 | 276 | ||||||
| Income tax receivable | 7 | 2 | ||||||
| Assets held for sale | 550 | 2 | ||||||
| Other current assets | 1,245 | 1,093 | ||||||
| Total current assets | 5,171 | 3,970 | ||||||
| Investments and other assets | 1,175 | 384 | ||||||
| Deferred income taxes | 776 | 863 | ||||||
| Property and equipment, at cost, less accumulated depreciation and amortization | 7,915 | 7,733 | ||||||
| Goodwill | 6,970 | 3,913 | ||||||
| Other intangible assets, at cost, less accumulated amortization | 1,675 | 1,088 | ||||||
| Total assets | $ | 23,682 | $ | 17,951 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 127 | $ | 112 | ||||
| Accounts payable | 1,380 | 1,179 | ||||||
| Accrued compensation and benefits | 880 | 852 | ||||||
| Professional and general liability reserves | 177 | 189 | ||||||
| Accrued interest payable | 205 | 194 | ||||||
| Liabilities held for sale | 101 | — | ||||||
| Accrued legal settlement costs | 294 | 45 | ||||||
| Other current liabilities | 1,144 | 1,006 | ||||||
| Total current liabilities | 4,308 | 3,577 | ||||||
| Long-term debt, net of current portion | 14,383 | 11,505 | ||||||
| Professional and general liability reserves | 578 | 492 | ||||||
| Defined benefit plan obligations | 595 | 633 | ||||||
| Other long-term liabilities | 594 | 558 | ||||||
| Total liabilities | 20,458 | 16,765 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interests in equity of consolidated subsidiaries | 2,266 | 401 | ||||||
| Equity: | ||||||||
| Shareholders' equity: | ||||||||
| Common stock | 7 | 7 | ||||||
| Additional paid-in capital | 4,815 | 4,614 | ||||||
| Accumulated other comprehensive loss | (164 | ) | (182 | ) | ||||
| Accumulated deficit | (1,550 | ) | (1,410 | ) | ||||
| Common stock in treasury, at cost | (2,417 | ) | (2,378 | ) | ||||
| Total shareholders' equity | 691 | 651 | ||||||
| Noncontrolling interests | 267 | 134 | ||||||
| Total equity | 958 | 785 | ||||||
| Total liabilities and equity | $ | 23,682 | $ | 17,951 | ||||
| TENET HEALTHCARE CORPORATION | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOW | ||||||||
| (Unaudited) | ||||||||
| Years Ended | ||||||||
| (Dollars in millions) | December 31, | |||||||
| 2015 | 2014 | |||||||
| Net Income | $ | 78 | $ | 76 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 797 | 849 | ||||||
| Provision for doubtful accounts | 1,477 | 1,305 | ||||||
| Deferred income tax expense | 42 | 30 | ||||||
| Stock-based compensation expense | 69 | 51 | ||||||
| Impairment and restructuring charges, and acquisition-related costs | 318 | 153 | ||||||
| Litigation and investigation costs | 291 | 25 | ||||||
| Loss from early extinguishment of debt | 1 | 24 | ||||||
| Gains on sales, consolidation and deconsolidation of facilities | (186 | ) | — | |||||
| Undistributed earnings from affiliates | (99 | ) | (10 | ) | ||||
| Amortization of debt discount and debt issuance costs | 41 | 28 | ||||||
| Pre-tax loss (income) from discontinued operations | (3 | ) | 35 | |||||
| Other items, net | 59 | (30 | ) | |||||
| Changes in cash from operating assets and liabilities: | ||||||||
| Accounts receivable | (1,632 | ) | (1,896 | ) | ||||
| Inventories and other current assets | (130 | ) | (314 | ) | ||||
| Income taxes | 18 | 3 | ||||||
| Accounts payable, accrued expenses and other current liabilities | 68 | 505 | ||||||
| Other long-term liabilities | 38 | 44 | ||||||
| Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (200 | ) | (168 | ) | ||||
| Net cash used in operating activities from discontinued operations, excluding income taxes | (21 | ) | (23 | ) | ||||
| Net cash provided by operating activities | 1,026 | 687 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment — continuing operations | (842 | ) | (933 | ) | ||||
| Purchases of businesses or joint venture interests, net of cash acquired | (940 | ) | (428 | ) | ||||
| Proceeds from sales of facilities and other assets | 549 | 6 | ||||||
| Proceeds from sales of marketable securities, long-term investments and other assets | 60 | 13 | ||||||
| Purchases of equity investments | (134 | ) | (12 | ) | ||||
| Other long-term assets | (4 | ) | 31 | |||||
| Other items, net | (6 | ) | 1 | |||||
| Net cash used in investing activities | (1,317 | ) | (1,322 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayments of borrowings under credit facility | (2,815 | ) | (2,430 | ) | ||||
| Proceeds from borrowings under credit facility | 2,595 | 2,245 | ||||||
| Repayments of other borrowings | (2,049 | ) | (683 | ) | ||||
| Proceeds from other borrowings | 3,158 | 1,608 | ||||||
| Repurchases of common stock | (40 | ) | — | |||||
| Debt issuance costs | (80 | ) | (27 | ) | ||||
| Distributions paid to noncontrolling interests | (110 | ) | (45 | ) | ||||
| Contributions from noncontrolling interests | 4 | 18 | ||||||
| Purchase of noncontrolling interests | (254 | ) | — | |||||
| Proceeds from exercise of stock options | 15 | 26 | ||||||
| Other items, net | 30 | 3 | ||||||
| Net cash provided by financing activities | 454 | 715 | ||||||
| Net increase in cash and cash equivalents | 163 | 80 | ||||||
| Cash and cash equivalents at beginning of period | 193 | 113 | ||||||
| Cash and cash equivalents at end of period | $ | 356 | $ | 193 | ||||
| Supplemental disclosures: | ||||||||
| Interest paid, net of capitalized interest | $ | (859 | ) | $ | (726 | ) | ||
| Income tax payments, net | $ | (7 | ) | $ | (8 | ) | ||
| TENET HEALTHCARE CORPORATION | |||||||||||||||||||||||
|
SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) |
|||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| (Dollars in millions except per patient day, | |||||||||||||||||||||||
| per admission, per adjusted admission | Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||||||||
| and per visit amounts) | 2015 |
2014(2) |
|
Change |
2015(2) |
|
2014(2) |
|
Change | ||||||||||||||
| Net inpatient revenues | $ | 2,736 | $ | 2,719 | 0.6 | % | $ | 10,652 | $ | 10,015 | 6.4 | % | |||||||||||
| Net outpatient revenues | $ | 1,616 | $ | 1,448 | 11.6 | % | $ | 6,027 | $ | 5,449 | 10.6 | % | |||||||||||
| Number of acute care hospitals (at end of period) | 86 | 80 | 6 | * | 86 | 80 | — | * | |||||||||||||||
| Licensed beds (at end of period) | 22,525 | 20,814 | 8.2 | % | 22,525 | 20,814 | 8.2 | % | |||||||||||||||
| Average licensed beds | 22,549 | 20,805 | 8.4 | % | 21,092 | 20,531 | 2.7 | % | |||||||||||||||
| Utilization of licensed beds | 47.4 | % | 49.0 | % | (1.6 | )% | * | 49.6 | % | 49.3 | % | 0.3 | % | * | |||||||||
| Patient days - total | 983,856 | 937,803 | 4.9 | % | 3,817,572 | 3,695,288 | 3.3 | % | |||||||||||||||
| Adjusted patient days | 1,710,620 | 1,578,854 | 8.3 | % | 6,520,289 | 6,203,383 | 5.1 | % | |||||||||||||||
| Net inpatient revenue per patient day | $ | 2,781 | $ | 2,899 | (4.1 | )% | $ | 2,790 | $ | 2,710 | 3.0 | % | |||||||||||
| Total admissions | 211,991 | 202,337 | 4.8 | % | 824,102 | 791,165 | 4.2 | % | |||||||||||||||
| Adjusted patient admissions | 371,994 | 344,857 | 7.9 | % | 1,422,588 | 1,343,511 | 5.9 | % | |||||||||||||||
| Charity and uninsured admissions | 11,529 | 11,232 | 2.6 | % | 44,336 | 45,679 | (2.9 | )% | |||||||||||||||
| Net inpatient revenue per admission | $ | 12,906 | $ | 13,438 | (4.0 | )% | $ | 12,926 | $ | 12,659 | 2.1 | % | |||||||||||
| Average length of stay (days) | 4.64 | 4.63 | 0.2 | % | 4.63 | 4.67 | (0.9 | )% | |||||||||||||||
| Total surgeries | 138,264 | 128,050 | 8.0 | % | 517,127 | 495,980 | 4.3 | % | |||||||||||||||
| Admissions through emergency department | 133,108 | 127,361 | 4.5 | % | 521,272 | 495,195 | 5.3 | % | |||||||||||||||
| Emergency department visits | 778,148 | 737,680 | 5.5 | % | 3,010,625 | 2,824,526 | 6.6 | % | |||||||||||||||
| Total emergency department admissions and visits | 911,256 | 865,041 | 5.3 | % | 3,531,897 | 3,319,721 | 6.4 | % | |||||||||||||||
| Outpatient visits | 2,198,005 | 1,995,237 | 10.2 | % | 8,332,139 | 7,720,886 | 7.9 | % | |||||||||||||||
| Charity and uninsured outpatient visits | 173,280 | 165,365 | 4.8 | % | 662,168 | 660,924 | 0.2 | % | |||||||||||||||
| Net outpatient revenue per visit | $ | 735 | $ | 726 | 1.2 | % | $ | 723 | $ | 706 | 2.4 | % | |||||||||||
| Net patient revenue per adjusted patient admission | $ | 11,699 | $ | 12,083 | (3.2 | )% | $ | 11,724 | $ | 11,510 | 1.9 | % | |||||||||||
| Net patient revenue per adjusted patient day | $ | 2,544 | $ | 2,639 | (3.6 | )% | $ | 2,558 | $ | 2,493 | 2.6 | % | |||||||||||
| Net Patient Revenues from: | |||||||||||||||||||||||
| Medicare | 19.3 | % | 21.1 | % | (1.8 | )% | * | 20.4 | % | 22.0 | % | (1.6 | )% | * | |||||||||
| Medicaid | 8.2 | % | 11.3 | % | (3.1 | )% | * | 8.7 | % | 9.6 | % | (0.9 | )% | * | |||||||||
| Managed care | 61.6 | % | 57.5 | % | 4.1 | % | * | 60.6 | % | 58.4 | % | 2.2 | % | * | |||||||||
| Indemnity, self-pay and other | 10.9 | % | 10.1 | % | 0.8 | % | * | 10.3 | % | 10.0 | % | 0.3 | % | * | |||||||||
| (1) | Represents the results of Tenet's Hospital Operations and other segment. | |
| (2) | The results for 2014 and the quarter ended March 31, 2015 have been restated to exclude the results of the surgery and imaging centers that Tenet contributed to the joint venture with United Surgical Partners International. The results for these surgery and imaging centers are now reported in Tenet's Ambulatory Care segment. | |
| * This change is the difference between the 2015 and 2014 amounts shown. |
| TENET HEALTHCARE CORPORATION | ||||||||||||||||||||||||
|
SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) |
||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| (Dollars in millions except per patient day, | ||||||||||||||||||||||||
| per admission, per adjusted admission | Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||
| and per visit amounts) | 2015 |
2014(2) |
|
Change |
2015(2) |
|
2014(2) |
|
Change | |||||||||||||||
| Net inpatient revenues | $ | 2,546 | $ | 2,591 | (1.7 | )% | $ | 10,079 | $ | 9,615 | 4.8 | % | ||||||||||||
| Net outpatient revenues | $ | 1,446 | $ | 1,375 | 5.2 | % | $ | 5,630 | $ | 5,271 | 6.8 | % | ||||||||||||
| Number of acute care hospitals (at end of period) | 75 | 75 | — | * | 75 | 75 | — | * | ||||||||||||||||
| Licensed beds (at end of period) | 19,882 | 19,984 | (0.5 | )% | 19,882 | 19,984 | (0.5 | )% | ||||||||||||||||
| Average licensed beds | 19,906 | 19,975 | (0.3 | )% | 19,969 | 19,905 | 0.3 | % | ||||||||||||||||
| Utilization of licensed beds | 47.8 | % | 48.9 | % | (1.1 | )% | * | 49.0 | % | 49.1 | % | (0.1 | )% | * | ||||||||||
| Patient days - total | 875,226 | 898,353 | (2.6 | )% | 3,573,155 | 3,566,694 | 0.2 | % | ||||||||||||||||
| Adjusted patient days | 1,508,868 | 1,512,531 | (0.2 | )% | 6,083,749 | 5,993,861 | 1.5 | % | ||||||||||||||||
| Net inpatient revenue per patient day | $ | 2,909 | $ | 2,884 | 0.9 | % | $ | 2,821 | $ | 2,696 | 4.6 | % | ||||||||||||
| Total admissions | 190,642 | 194,169 | (1.8 | )% | 774,480 | 765,951 | 1.1 | % | ||||||||||||||||
| Adjusted patient admissions | 332,037 | 330,884 | 0.3 | % | 1,333,227 | 1,301,936 | 2.4 | % | ||||||||||||||||
| Charity and uninsured admissions | 10,386 | 10,573 | (1.8 | )% | 41,325 | 43,496 | (5.0 | )% | ||||||||||||||||
| Net inpatient revenue per admission | $ | 13,355 | $ | 13,344 | 0.1 | % | $ | 13,014 | $ | 12,553 | 3.7 | % | ||||||||||||
| Average length of stay (days) | 4.59 | 4.63 | (0.9 | )% | 4.61 | 4.66 | (1.1 | )% | ||||||||||||||||
| Total surgeries | 123,761 | 123,854 | (0.1 | )% | 487,953 | 482,633 | 1.1 | % | ||||||||||||||||
| Admissions through emergency department | 119,814 | 122,089 | (1.9 | )% | 489,401 | 479,805 | 2.0 | % | ||||||||||||||||
| Emergency department visits | 700,837 | 703,265 | (0.3 | )% | 2,816,943 | 2,738,233 | 2.9 | % | ||||||||||||||||
| Total emergency department admissions and visits | 820,651 | 825,354 | (0.6 | )% | 3,306,344 | 3,218,038 | 2.7 | % | ||||||||||||||||
| Outpatient visits | 1,974,943 | 1,917,935 | 3.0 | % | 7,831,785 | 7,496,243 | 4.5 | % | ||||||||||||||||
| Charity and uninsured outpatient visits | 153,357 | 158,492 | (3.2 | )% | 618,571 | 636,712 | (2.8 | )% | ||||||||||||||||
| Net outpatient revenue per visit | $ | 732 | $ | 717 | 2.1 | % | $ | 719 | $ | 703 | 2.3 | % | ||||||||||||
| Net patient revenue per adjusted patient admission | $ | 12,023 | $ | 11,986 | 0.3 | % | $ | 11,783 | $ | 11,434 | 3.1 | % | ||||||||||||
| Net patient revenue per adjusted patient day | $ | 2,646 | $ | 2,622 | 0.9 | % | $ | 2,582 | $ | 2,484 | 3.9 | % | ||||||||||||
| Net Patient Revenues from: | ||||||||||||||||||||||||
| Medicare | 19.6 | % | 20.7 | % | (1.1 | )% | * | 19.6 | % | 21.7 | % | (2.1 | )% | * | ||||||||||
| Medicaid | 8.3 | % | 11.1 | % | (2.8 | )% | * | 8.3 | % | 9.4 | % | (1.1 | )% | * | ||||||||||
| Managed care | 61.6 | % | 58.3 | % | 3.3 | % | * | 61.6 | % | 59.0 | % | 2.6 | % | * | ||||||||||
| Indemnity, self-pay and other | 10.5 | % | 9.9 | % | 0.6 | % | * | 10.5 | % | 9.9 | % | 0.6 | % | * | ||||||||||
| (1) | Represents the results of Tenet's Hospital Operations and other segment. | |
| (2) | The results for 2014 and the quarter ended March 31, 2015 have been restated to exclude the results of the surgery and imaging centers that Tenet contributed to the joint venture with United Surgical Partners International. The results for these surgery and imaging centers are now reported in Tenet's Ambulatory Care segment. | |
|
* This change is the difference between the 2015 and 2014 amounts shown. |
| TENET HEALTHCARE CORPORATION | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions except per share amounts) | Three Months Ended | Year Ended | ||||||||||||||||||
| 03/31/15 | 6/30/2015 | 9/30/2015 | 12/31/2015 | 12/31/2015 | ||||||||||||||||
| Net operating revenues: | ||||||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 4,787 | $ | 4,844 | $ | 5,063 | $ | 5,417 | $ | 20,111 | ||||||||||
| Less: Provision for doubtful accounts | 363 | 352 | 371 | 391 | 1,477 | |||||||||||||||
| Net operating revenues | 4,424 | 4,492 | 4,692 | 5,026 | 18,634 | |||||||||||||||
| Equity in earnings of unconsolidated affiliates | 4 | 16 | 28 | 51 | 99 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Salaries, wages and benefits | 2,125 | 2,185 | 2,258 | 2,443 | 9,011 | |||||||||||||||
| Supplies | 687 | 707 | 752 | 817 | 2,963 | |||||||||||||||
| Other operating expenses, net | 1,093 | 1,081 | 1,151 | 1,230 | 4,555 | |||||||||||||||
| Electronic health record incentives | (6 | ) | (33 | ) | (7 | ) | (26 | ) | (72 | ) | ||||||||||
| Depreciation and amortization | 207 | 197 | 185 | 208 | 797 | |||||||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 29 | 193 | 44 | 52 | 318 | |||||||||||||||
| Litigation and investigation costs | 3 | 14 | 50 | 224 | 291 | |||||||||||||||
| Gains on sales, consolidation and deconsolidation of facilities | — | — | — | (186 | ) | (186 | ) | |||||||||||||
| Operating income | 290 | 164 | 287 | 315 | 1,056 | |||||||||||||||
| Interest expense | (199 | ) | (217 | ) | (248 | ) | (248 | ) | (912 | ) | ||||||||||
| Loss from early extinguishment of debt | — | — | — | (1 | ) | (1 | ) | |||||||||||||
| Investment earnings (loss) | — | (1 | ) | 1 | 1 | 1 | ||||||||||||||
| Net income (loss) from continuing operations, before income taxes | 91 | (54 | ) | 40 | 67 | 144 | ||||||||||||||
| Income tax benefit (expense) | (16 | ) | 27 | (11 | ) | (68 | ) | (68 | ) | |||||||||||
| Net income (loss) from continuing operations, before discontinued operations | 75 | (27 | ) | 29 | (1 | ) | 76 | |||||||||||||
| Discontinued operations: | ||||||||||||||||||||
| Loss from operations | (1 | ) | (2 | ) | (1 | ) | (1 | ) | (5 | ) | ||||||||||
| Litigation and investigation costs | 3 | — | — | 5 | 8 | |||||||||||||||
| Income tax benefit (expense) | (1 | ) | 1 | — | (1 | ) | (1 | ) | ||||||||||||
| Net income (loss) from discontinued operations | 1 | (1 | ) | (1 | ) | 3 | 2 | |||||||||||||
| Net income (loss) | 76 | (28 | ) | 28 | 2 | 78 | ||||||||||||||
| Less: Net income attributable to noncontrolling interests | 29 | 33 | 57 | 99 | 218 | |||||||||||||||
| Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ | 47 | $ | (61 | ) | $ | (29 | ) | $ | (97 | ) | $ | (140 | ) | ||||||
| Amounts available (attributable) to Tenet Healthcare Corporation common shareholders | ||||||||||||||||||||
| Net income (loss) from continuing operations, net of tax | $ | 46 | $ | (60 | ) | $ | (28 | ) | $ | (100 | ) | $ | (142 | ) | ||||||
| Net income (loss) from discontinued operations, net of tax | 1 | (1 | ) | (1 | ) | 3 | 2 | |||||||||||||
| Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ | 47 | $ | (61 | ) | $ | (29 | ) | $ | (97 | ) | $ | (140 | ) | ||||||
| Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders: | ||||||||||||||||||||
| Basic | ||||||||||||||||||||
| Continuing operations | $ | 0.47 | $ | (0.60 | ) | $ | (0.28 | ) | $ | (1.01 | ) | $ | (1.43 | ) | ||||||
| Discontinued operations | 0.01 | (0.01 | ) | (0.01 | ) | 0.03 | 0.02 | |||||||||||||
| $ | 0.48 | $ | (0.61 | ) | $ | (0.29 | ) | $ | (0.98 | ) | $ | (1.41 | ) | |||||||
| Diluted | ||||||||||||||||||||
| Continuing operations | $ | 0.46 | $ | (0.60 | ) | $ | (0.28 | ) | $ | (1.01 | ) | $ | (1.43 | ) | ||||||
| Discontinued operations | 0.01 | (0.01 | ) | (0.01 | ) | 0.03 | 0.02 | |||||||||||||
| $ | 0.47 | $ | (0.61 | ) | $ | (0.29 | ) | $ | (0.98 | ) | $ | (1.41 | ) | |||||||
| Weighted average shares and dilutive securities outstanding (in thousands): | ||||||||||||||||||||
| Basic | 98,699 | 99,244 | 99,537 | 99,188 | 99,167 | |||||||||||||||
| Diluted | 100,872 | 99,244 | 99,537 | 99,188 | 99,167 | |||||||||||||||
| TENET HEALTHCARE CORPORATION | |||||||||||||||||||||||
|
SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) |
|||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| (Dollars in millions except per patient day, | |||||||||||||||||||||||
| per admission, per adjusted admission | Three Months Ended | Year Ended | |||||||||||||||||||||
| and per visit amounts) |
03/31/15(2) |
|
06/30/15 | 9/30/2015 | 12/31/2015 | 12/31/2015 | |||||||||||||||||
| Net inpatient revenues | $2,691 | $2,622 | $2,603 | $2,736 | $ | 10,652 | |||||||||||||||||
| Net outpatient revenues | $1,412 | $1,484 | $1,515 | $1,616 | $ | 6,027 | |||||||||||||||||
| Number of acute care hospitals (at end of period) | 80 | 80 | 83 | 86 | 86 | ||||||||||||||||||
| Licensed beds (at end of period) | 20,826 | 20,826 | 21,527 | 22,525 | 22,525 | ||||||||||||||||||
| Average licensed beds | 20,823 | 20,826 | 21,122 | 22,549 | 21,092 | ||||||||||||||||||
| Utilization of licensed beds | 52.1 | % | 49.1 | % | 47.8 | % | 47.4 | % | 49.6 | % | |||||||||||||
| Patient days - total | 975,912 | 929,840 | 927,964 | 983,856 | 3,817,572 | ||||||||||||||||||
| Adjusted patient days | 1,618,516 | 1,589,659 | 1,601,494 | 1,710,620 | 6,520,289 | ||||||||||||||||||
| Net inpatient revenue per patient day | $2,756 | $2,821 | $2,805 | $2,781 | $ | 2,790 | |||||||||||||||||
| Total admissions | 208,333 | 201,908 | 201,870 | 211,991 | 824,102 | ||||||||||||||||||
| Adjusted patient admissions | 349,097 | 349,145 | 352,352 | 371,994 | 1,422,588 | ||||||||||||||||||
| Charity and uninsured admissions | 10,950 | 10,535 | 11,322 | 11,529 | 44,336 | ||||||||||||||||||
| Net inpatient revenue per admission | $12,912 | $12,991 | $12,894 | $12,906 | $ | 12,926 | |||||||||||||||||
| Average length of stay (days) | 4.68 | 4.61 | 4.60 | 4.64 | 4.63 | ||||||||||||||||||
| Total surgeries | 121,403 | 127,523 | 129,937 | 138,264 | 517,127 | ||||||||||||||||||
| Admissions through emergency department | 133,544 | 128,570 | 126,050 | 133,108 | 521,272 | ||||||||||||||||||
| Emergency department visits | 741,533 | 742,951 | 747,993 | 778,148 | 3,010,625 | ||||||||||||||||||
| Total emergency department admissions and visits | 875,077 | 871,521 | 874,043 | 911,256 | 3,531,897 | ||||||||||||||||||
| Outpatient visits | 1,994,573 | 2,063,037 | 2,076,524 | 2,198,005 | 8,332,139 | ||||||||||||||||||
| Charity and uninsured outpatient visits | 157,197 | 159,634 | 172,057 | 173,280 | 662,168 | ||||||||||||||||||
| Net outpatient revenue per visit | $708 | $719 | $730 | $735 | $ | 723 | |||||||||||||||||
| Net patient revenue per adjusted patient admission | $11,750 | $11,764 | $11,688 | $11,699 | $ | 11,724 | |||||||||||||||||
| Net patient revenue per adjusted patient day | $2,534 | $2,584 | $2,571 | $2,544 | $ | 2,558 | |||||||||||||||||
| Net Patient Revenues from: | |||||||||||||||||||||||
| Medicare | 21.9 | % | 20.7 | % | 19.8 | % | 19.3 | % | 20.4 | % | |||||||||||||
| Medicaid | 9.4 | % | 8.5 | % | 8.8 | % | 8.2 | % | 8.7 | % | |||||||||||||
| Managed care | 58.6 | % | 60.8 | % | 61.1 | % | 61.6 | % | 60.6 | % | |||||||||||||
| Indemnity, self-pay and other | 10.2 | % | 10.0 | % | 10.3 | % | 10.9 | % | 10.3 | % | |||||||||||||
| (1) | Represents the results of Tenet's Hospital Operations and other segment. | |
| (2) | The results for the quarter ended March 31, 2015 have been restated to exclude the results of the surgery and imaging centers that Tenet contributed to the joint venture with United Surgical Partners International. The results for these surgery and imaging centers are now reported in Tenet's Ambulatory Care segment. |
| TENET HEALTHCARE CORPORATION | |||||||||||||||||||||||
|
SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) |
|||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| (Dollars in millions except per patient day, | |||||||||||||||||||||||
| per admission, per adjusted admission | Three Months Ended | Year Ended | |||||||||||||||||||||
| and per visit amounts) |
03/31/15(2) |
|
06/30/15 | 9/30/2015 | 12/31/2015 | 12/31/2015 | |||||||||||||||||
| Net inpatient revenues | $2,568 | $2,493 | $2,472 | $ | 2,546 | $ | 10,079 | ||||||||||||||||
| Net outpatient revenues | $1,350 | $1,407 | $1,427 | $ | 1,446 | $ | 5,630 | ||||||||||||||||
| Number of acute care hospitals (at end of period) | 75 | 75 | 75 | 75 | 75 | ||||||||||||||||||
| Licensed beds (at end of period) | 19,996 | 19,996 | 19,953 | 19,882 | 19,882 | ||||||||||||||||||
| Average licensed beds | 19,993 | 19,996 | 19,985 | 19,906 | 19,969 | ||||||||||||||||||
| Utilization of licensed beds | 51.9 | % | 48.9 | % | 47.6 | % | 47.8 | % | 49.0 | % | |||||||||||||
| Patient days - total | 934,521 | 888,952 | 874,456 | 875,226 | 3,573,155 | ||||||||||||||||||
| Adjusted patient days | 1,550,217 | 1,520,937 | 1,503,727 | 1,508,868 | 6,083,749 | ||||||||||||||||||
| Net inpatient revenue per patient day | $2,748 | $2,804 | $2,827 | $ | 2,909 | $ | 2,821 | ||||||||||||||||
| Total admissions | 199,460 | 193,324 | 191,054 | 190,642 | 774,480 | ||||||||||||||||||
| Adjusted patient admissions | 334,218 | 334,451 | 332,521 | 332,037 | 1,333,227 | ||||||||||||||||||
| Charity and uninsured admissions | 10,291 | 9,947 | 10,701 | 10,386 | 41,325 | ||||||||||||||||||
| Net inpatient revenue per admission | $12,875 | $12,895 | $12,939 | $ | 13,355 | $ | 13,014 | ||||||||||||||||
| Average length of stay (days) | 4.69 | 4.60 | 4.58 | 4.59 | 4.61 | ||||||||||||||||||
| Total surgeries | 117,412 | 123,015 | 123,765 | 123,761 | 487,953 | ||||||||||||||||||
| Admissions through emergency department | 127,497 | 122,826 | 119,264 | 119,814 | 489,401 | ||||||||||||||||||
| Emergency department visits | 706,433 | 707,425 | 702,248 | 700,837 | 2,816,943 | ||||||||||||||||||
| Total emergency department admissions and visits | 833,930 | 830,251 | 821,512 | 820,651 | 3,306,344 | ||||||||||||||||||
| Outpatient visits | 1,912,749 | 1,980,927 | 1,963,166 | 1,974,943 | 7,831,785 | ||||||||||||||||||
| Charity and uninsured outpatient visits | 150,324 | 152,449 | 162,441 | 153,357 | 618,571 | ||||||||||||||||||
| Net outpatient revenue per visit | $706 | $710 | $727 | $ | 732 | $ | 719 | ||||||||||||||||
| Net patient revenue per adjusted patient admission | $11,723 | $11,661 | $11,726 | $ | 12,023 | $ | 11,783 | ||||||||||||||||
| Net patient revenue per adjusted patient day | $2,527 | $2,564 | $2,593 | $ | 2,646 | $ | 2,582 | ||||||||||||||||
| Net Patient Revenues from: | |||||||||||||||||||||||
| Medicare | 21.6 | % | 20.4 | % | 20.0 | % | 19.6 | % | 19.6 | % | |||||||||||||
| Medicaid | 9.2 | % | 8.2 | % | 8.6 | % | 8.3 | % | 8.3 | % | |||||||||||||
| Managed care | 59.2 | % | 61.6 | % | 61.5 | % | 61.6 | % | 61.6 | % | |||||||||||||
| Indemnity, self-pay and other | 10.0 | % | 9.8 | % | 9.9 | % | 10.5 | % | 10.5 | % | |||||||||||||
| (1) | Represents the results of Tenet's Hospital Operations and other segment. | |
| (2) | The results for the quarter ended March 31, 2015 have been restated to exclude the results of the surgery and imaging centers that Tenet contributed to the joint venture with United Surgical Partners International. The results for these surgery and imaging centers are now reported in Tenet's Ambulatory Care segment. |
| TENET HEALTHCARE CORPORATION | ||||||||||||||||||||
| SELECTED STATISTICS – CONTINUING SAME HOSPITALS((1)) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions except per patient day, | ||||||||||||||||||||
| per admission, per adjusted admission | Three Months Ended | Year Ended | ||||||||||||||||||
| and per visit amounts) | 03/31/14 | 06/30/14 | 9/30/2014 | 12/31/2014 | 12/31/2014 | |||||||||||||||
| Net inpatient revenues | $ | 2,364 | $ | 2,324 | $ | 2,336 | $ | 2,591 | $ | 9,615 | ||||||||||
| Net outpatient revenues | $ | 1,250 | $ | 1,323 | $ | 1,323 | $ | 1,375 | $ | 5,271 | ||||||||||
| Number of acute care hospitals (at end of period) | 75 | 75 | 75 | 75 | 75 | |||||||||||||||
| Licensed beds (at end of period) | 19,832 | 19,932 | 19,932 | 19,984 | 19,984 | |||||||||||||||
| Average licensed beds | 19,832 | 19,881 | 19,932 | 19,975 | 19,905 | |||||||||||||||
| Utilization of licensed beds | 50.7 | % | 48.7 | % | 48.2 | % | 48.9 | % | 49.1 | % | ||||||||||
| Patient days - total | 904,400 | 880,198 | 883,743 | 898,353 | 3,566,694 | |||||||||||||||
| Adjusted patient days | 1,485,264 | 1,496,763 | 1,499,303 | 1,512,531 | 5,993,861 | |||||||||||||||
| Net inpatient revenue per patient day | $ | 2,614 | $ | 2,640 | $ | 2,643 | $ | 2,884 | $ | 2,696 | ||||||||||
| Total admissions | 190,021 | 189,642 | 192,119 | 194,169 | 765,951 | |||||||||||||||
| Adjusted patient admissions | 315,397 | 325,810 | 329,845 | 330,884 | 1,301,936 | |||||||||||||||
| Charity and uninsured admissions | 12,094 | 10,510 | 10,319 | 10,573 | 43,496 | |||||||||||||||
| Net inpatient revenue per admission | $ | 12,441 | $ | 12,255 | $ | 12,159 | $ | 13,344 | $ | 12,553 | ||||||||||
| Average length of stay (days) | 4.76 | 4.64 | 4.60 | 4.63 | 4.66 | |||||||||||||||
| Total surgeries | 115,391 | 120,778 | 122,610 | 123,854 | 482,633 | |||||||||||||||
| Admissions through emergency department | 120,160 | 119,269 | 118,287 | 122,089 | 479,805 | |||||||||||||||
| Emergency department visits | 655,714 | 689,083 | 690,171 | 703,265 | 2,738,233 | |||||||||||||||
| Total emergency department admissions and visits | 775,874 | 808,352 | 808,458 | 825,354 | 3,218,038 | |||||||||||||||
| Outpatient visits | 1,787,262 | 1,887,541 | 1,903,505 | 1,917,935 | 7,496,243 | |||||||||||||||
| Charity and uninsured outpatient visits | 158,356 | 161,773 | 158,091 | 158,492 | 636,712 | |||||||||||||||
| Net outpatient revenue per visit | $ | 699 | $ | 701 | $ | 695 | $ | 717 | $ | 703 | ||||||||||
| Net patient revenue per adjusted patient admission | $ | 11,459 | $ | 11,194 | $ | 11,093 | $ | 11,986 | $ | 11,434 | ||||||||||
| Net patient revenue per adjusted patient day | $ | 2,433 | $ | 2,437 | $ | 2,440 | $ | 2,622 | $ | 2,484 | ||||||||||
| Net Patient Revenues from: | ||||||||||||||||||||
| Medicare | 22.4 | % | 22.4 | % | 21.2 | % | 20.7 | % | 21.7 | % | ||||||||||
| Medicaid | 7.7 | % | 9.9 | % | 8.7 | % | 11.1 | % | 9.4 | % | ||||||||||
| Managed care | 58.2 | % | 58.4 | % | 61.1 | % | 58.3 | % | 59.0 | % | ||||||||||
| Indemnity, self-pay and other | 11.7 | % | 9.3 | % | 9.1 | % | 9.9 | % | 9.9 | % | ||||||||||
| (1) | Represents the results of Tenet's Hospital Operations and other segment. The results for 2014 have been restated to exclude the results of the surgery and imaging centers that Tenet contributed to the joint venture with United Surgical Partners International. The results for these surgery and imaging centers are now reported in Tenet's Ambulatory Care segment. |
| TENET HEALTHCARE CORPORATION | ||||||||||||||||
| SEGMENT REPORTING | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | |||||||||||||||
| Assets | ||||||||||||||||
| Hospital Operations and other | $ | 17,353 | $ | 16,810 | ||||||||||||
| Ambulatory Care | 5,159 | 212 | ||||||||||||||
| Conifer | 1,170 | 929 | ||||||||||||||
| Total | $ | 23,682 | $ | 17,951 | ||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Capital expenditures: | ||||||||||||||||
| Hospital Operations and other | $ | 250 | $ | 188 | $ | 786 | $ | 899 | ||||||||
| Ambulatory Care | 14 | 3 | 28 | 9 | ||||||||||||
| Conifer | 12 | 8 | 28 | 25 | ||||||||||||
| Total | $ | 276 | $ | 199 | $ | 842 | $ | 933 | ||||||||
| Net operating revenues: | ||||||||||||||||
| Hospital Operations and other | $ | 4,423 | $ | 4,213 | $ | 16,928 | $ | 15,681 | ||||||||
| Ambulatory Care | 397 | 90 | 959 | 320 | ||||||||||||
| Conifer | ||||||||||||||||
| Tenet | 178 | 165 | 666 | 591 | ||||||||||||
| Other customers | 206 | 162 | 747 | 602 | ||||||||||||
| Total Conifer revenues | 384 | 327 | 1,413 | 1,193 | ||||||||||||
| Intercompany eliminations | (178 | ) | (165 | ) | (666 | ) | (591 | ) | ||||||||
| Total | $ | 5,026 | $ | 4,465 | $ | 18,634 | $ | 16,603 | ||||||||
| Adjusted EBITDA: | ||||||||||||||||
| Hospital Operations and other | $ | 394 | $ | 553 | $ | 1,653 | $ | 1,651 | ||||||||
| Ambulatory Care | 158 | 29 | 358 | 98 | ||||||||||||
| Conifer | 61 | 64 | 265 | 203 | ||||||||||||
| Total | $ | 613 | $ | 646 | $ | 2,276 | $ | 1,952 | ||||||||
| Depreciation and amortization: | ||||||||||||||||
| Hospital Operations and other | $ | 177 | $ | 227 | $ | 702 | $ | 810 | ||||||||
| Ambulatory Care | 18 | 3 | 46 | 14 | ||||||||||||
| Conifer | 13 | 10 | 49 | 25 | ||||||||||||
| Total | $ | 208 | $ | 240 | $ | 797 | $ | 849 | ||||||||
| Adjusted EBITDA | $ | 613 | $ | 646 | $ | 2,276 | $ | 1,952 | ||||||||
| Depreciation and amortization | (208 | ) | (240 | ) | (797 | ) | (849 | ) | ||||||||
| Impairments and restructuring charges, and acquisition-related costs | (52 | ) | (63 | ) | (318 | ) | (153 | ) | ||||||||
| Litigation and investigation costs | (224 | ) | (6 | ) | (291 | ) | (25 | ) | ||||||||
| Interest expense | (248 | ) | (196 | ) | (912 | ) | (754 | ) | ||||||||
| Loss from early extinguishment of debt | (1 | ) | — | (1 | ) | (24 | ) | |||||||||
| Gains on sales, consolidation and deconsolidation of facilities | 186 | — | 186 | — | ||||||||||||
| Investment Earnings | 1 | — | 1 | — | ||||||||||||
| Income from continuing operations before income taxes | $ | 67 | $ | 141 | $ | 144 | $ | 147 | ||||||||
| TENET HEALTHCARE CORPORATION | ||||||||||||||||
| STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT | ||||||||||||||||
| INCLUDING PRO FORMA USPI AND ASPEN FOR ALL PERIODS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended December 31, | ||||||||||||||||
| 2015 | 2014 | |||||||||||||||
|
Ambulatory |
Unconsolidated |
Ambulatory |
Unconsolidated |
|||||||||||||
| Net operating revenues: | ||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 404 | $ | 637 | $ | 313 | $ | 587 | ||||||||
| Less: Provision for doubtful accounts | (7 | ) | (13 | ) | (5 | ) | (14 | ) | ||||||||
| Net operating revenues(1) | 397 | 624 | 308 | 573 | ||||||||||||
| Equity in earnings of unconsolidated affiliates(2) | 47 | — | 43 | — | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries, wages and benefits | 130 | 135 | 97 | 130 | ||||||||||||
| Supplies | 79 | 148 | 57 | 142 | ||||||||||||
| Other operating expenses, net | 78 | 111 | 65 | 106 | ||||||||||||
| Electronic health record incentives | (1 | ) | — | (2 | ) | — | ||||||||||
| Depreciation and amortization | 18 | 20 | 14 | 20 | ||||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 3 | (2 | ) | 7 | — | |||||||||||
| Gains on sales, consolidation and deconsolidation of facilities | (32 | ) | — | — | — | |||||||||||
| Operating income | 169 | 212 | 113 | 175 | ||||||||||||
| Interest expense | (35 | ) | (7 | ) | (31 | ) | (7 | ) | ||||||||
| Net income from continuing operations, before income taxes | 134 | 205 | 82 | 168 | ||||||||||||
| Income tax expense | (16 | ) | (3 | ) | (19 | ) | (2 | ) | ||||||||
| Net income | 118 | $ | 202 | 63 | $ | 166 | ||||||||||
| Less: Net income attributable to noncontrolling interests | 85 | 49 | ||||||||||||||
| Net income attributable to Tenet Healthcare Corporation common shareholders | $ | 33 | $ | 14 | ||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | 47 | $ | 43 | ||||||||||||
| (1) | On a same-facility system-wide basis, net revenue in Tenet's Ambulatory Care segment increased 12.5% during the three months ended December 31, 2015, with cases increasing 6.9% and revenue per case increasing 5.2%. | |
| (2) | At December 31, 2015, 139 of the 333 facilities in the Company's newly formed Ambulatory segment were not consolidated based on the nature of the segment's joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment's unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company's overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. We control our remaining 194 facilities and account for these investments as consolidated subsidiaries. |
| TENET HEALTHCARE CORPORATION | ||||||||||||||||
| STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT | ||||||||||||||||
| INCLUDING PRO FORMA USPI AND ASPEN FOR ALL PERIODS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Years Ended December 31, | ||||||||||||||||
| 2015 | 2014 | |||||||||||||||
|
Ambulatory |
Unconsolidated |
Ambulatory |
Unconsolidated |
|||||||||||||
| Net operating revenues: | ||||||||||||||||
| Net operating revenues before provision for doubtful accounts | $ | 1,366 | $ | 2,213 | $ | 1,156 | $ | 1,967 | ||||||||
| Less: Provision for doubtful accounts | (23 | ) | (53 | ) | (16 | ) | (48 | ) | ||||||||
| Net operating revenues(1) | 1,343 | 2,160 | 1,140 | 1,919 | ||||||||||||
| Equity in earnings of unconsolidated affiliates(2) | 126 | — | 116 | — | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries, wages and benefits | 438 | 514 | 368 | 463 | ||||||||||||
| Supplies | 253 | 542 | 203 | 478 | ||||||||||||
| Other operating expenses, net | 290 | 448 | 260 | 397 | ||||||||||||
| Electronic health record incentives | (1 | ) | — | (2 | ) | — | ||||||||||
| Depreciation and amortization | 64 | 80 | 56 | 76 | ||||||||||||
| Impairment and restructuring charges, and acquisition-related costs | 5 | 1 | 9 | (6 | ) | |||||||||||
| Gains on sales, consolidation and deconsolidation of facilities | (32 | ) | — | — | — | |||||||||||
| Operating income | 452 | 575 | 362 | 511 | ||||||||||||
| Interest expense | (137 | ) | (28 | ) | (123 | ) | (28 | ) | ||||||||
| Other | — | (2 | ) | — | 1 | |||||||||||
| Net income from continuing operations, before income taxes | 315 | 545 | 239 | 484 | ||||||||||||
| Income tax expense | (52 | ) | (8 | ) | (49 | ) | (8 | ) | ||||||||
| Net Income | 263 | $ | 537 | 190 | $ | 476 | ||||||||||
| Less: Net income attributable to noncontrolling interests | 206 | 150 | ||||||||||||||
| Net income attributable to Tenet Healthcare Corporation common shareholders | $ | 57 | $ | 40 | ||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | 126 | $ | 116 | ||||||||||||
| (1) | On a pro forma same-facility system-wide basis, net revenue in Tenet's Ambulatory Care segment increased 11.7% during the twelve months ended December 31, 2015, with cases increasing 7.9% and revenue per case increasing 3.6%. | |
| (2) | At December 31, 2015, 139 of the 333 facilities in the Company's newly formed Ambulatory segment were not consolidated based on the nature of the segment's joint venture relationships with physicians and prominent healthcare systems. Although revenues of the segment's unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is nonetheless a significant portion of the Company's overall earnings. To help analyze results of operations, management also uses system-wide operating measures such as system-wide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. We control our remaining 194 facilities and account for these investments as consolidated subsidiaries. | |
(1) Reconciliation of Adjusted EBITDA
Adjusted EBITDA, a non-GAAP term, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) the cumulative effect of changes in accounting principle, net of tax; (2) net loss (income) attributable to noncontrolling interests; (3) preferred stock dividends; (4) income (loss) from discontinued operations, net of tax; (5) income tax benefit (expense); (6) investment earnings (loss); (7) gain (loss) from early extinguishment of debt; (8) net gain (loss) on sales of investments; (9) interest expense; (10) litigation and investigation benefit (costs), net of insurance recoveries; (11) hurricane insurance recoveries, net of costs; (12) net gains (losses) on sales, consolidation and deconsolidation of facilities: (13) impairment and restructuring charges and acquisition-related costs; and (14) depreciation and amortization. The Company's Adjusted EBITDA may not be comparable to EBITDA reported by other companies.
The Company provides this information as a supplement to GAAP information to assist itself and investors in understanding the impact of various items on its financial statements, some of which are recurring or involve cash payments. The Company uses this information in its analysis of the performance of its business excluding items that it does not consider as relevant in the performance of its hospitals in continuing operations. In addition, from time to time we use this measure to define certain performance targets under our compensation programs. Adjusted EBITDA is not a measure of liquidity, but is a measure of operating performance that management uses in its business as an alternative to net income (loss) attributable to Tenet Healthcare Corporation common shareholders. Because Adjusted EBITDA excludes many items that are included in our financial statements, it does not provide a complete measure of our operating performance. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company's financial performance.
The reconciliation of net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP term, to Adjusted EBITDA, is set forth in the first table below for the three and twelve months ended December 31, 2015 and 2014.
|
TENET HEALTHCARE CORPORATION |
||||||||||||||||
|
Additional Supplemental Non-GAAP disclosures |
||||||||||||||||
| Table #1 – Reconciliation of Adjusted EBITDA to Net Loss Attributable to | ||||||||||||||||
| Tenet Healthcare Corporation Common Shares | ||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders | $ | (97 | ) | $ | 61 | $ | (140 | ) | $ | 12 | ||||||
| Less: Net income attributable to noncontrolling interests | (99 | ) | (20 | ) | (218 | ) | (64 | ) | ||||||||
| Net income (loss) from discontinued operations, net of tax | 3 | — | 2 | (22 | ) | |||||||||||
| Income from continuing operations | (1 | ) | 81 | 76 | 98 | |||||||||||
| Income tax expense | (68 | ) | (60 | ) | (68 | ) | (49 | ) | ||||||||
| Investment earnings | 1 | — | 1 | — | ||||||||||||
| Loss from early extinguishment of debt | (1 | ) | — | (1 | ) | (24 | ) | |||||||||
| Interest expense | (248 | ) | (196 | ) | (912 | ) | (754 | ) | ||||||||
| Operating income | 315 | 337 | 1,056 | 925 | ||||||||||||
| Litigation and investigation costs | (224 | ) | (6 | ) | (291 | ) | (25 | ) | ||||||||
| Gains on sales, consolidation and deconsolidation of facilities | 186 | — | 186 | — | ||||||||||||
| Impairment and restructuring charges, acquisition-related costs and litigation costs and settlements | (52 | ) | (63 | ) | (318 | ) | (153 | ) | ||||||||
| Depreciation and amortization | (208 | ) | (240 | ) | (797 | ) | (849 | ) | ||||||||
| Adjusted EBITDA | $ | 613 | $ | 646 | $ | 2,276 | $ | 1,952 | ||||||||
| Net operating revenues | $ | 5,026 | $ | 4,465 | $ | 18,634 | $ | 16,603 | ||||||||
| Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin) | 12.2 | % | 14.5 | % | 12.2 | % | 11.8 | % | ||||||||
|
TENET HEALTHCARE CORPORATION |
||||||||||||||||
|
Additional Supplemental Non-GAAP disclosures |
||||||||||||||||
| Table #2 – Reconciliation of Adjusted Free Cash Flow | ||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| (Dollars in millions) | December 31, | December 31, | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net cash provided by operating activities | $ | 191 | $ | 219 | $ | 1,026 | $ | 687 | ||||||||
| Less: | ||||||||||||||||
| Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (43 | ) | (53 | ) | (200 | ) | (168 | ) | ||||||||
| Net cash used in operating activities from discontinued operations | (3 | ) | (7 | ) | (21 | ) | (23 | ) | ||||||||
| Adjusted net cash provided by operating activities – continuing operations | 237 | 279 | 1,247 | 878 | ||||||||||||
| Purchases of property and equipment – continuing operations | (276 | ) | (199 | ) | (842 | ) | (933 | ) | ||||||||
| Adjusted free cash flow – continuing operations | $ | (39 | ) | $ | 80 | $ | 405 | $ | (55 | ) | ||||||
|
TENET HEALTHCARE CORPORATION |
||||||||||||||||
|
Additional Supplemental Non-GAAP disclosures |
||||||||||||||||
| Table #3 – Reconciliation of Outlook Adjusted EBITDA to | ||||||||||||||||
| Outlook Net Income Attributable to Tenet Healthcare Corporation Common Shareholders | ||||||||||||||||
| for the Year Ending December 31, 2016 | ||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| (Dollars in millions) | Q1 2016 | 2016 | ||||||||||||||
| Low | High | Low | High | |||||||||||||
| Net income attributable to Tenet Healthcare Corporation common shareholders | $ | 3 | $ | 55 | $ | 115 | $ | 230 | ||||||||
| Less: Net income attributable to noncontrolling interests | (70 | ) | (60 | ) | (330 | ) | (310 | ) | ||||||||
| Net Loss from discontinued operations, net of tax | (2 | ) | - | (5 | ) | - | ||||||||||
| Income from continuing operations | 75 | 115 | 450 | 540 | ||||||||||||
| Income tax expense | (10 | ) | (50 | ) | (130 | ) | (200 | ) | ||||||||
| Income from continuing operations, before income taxes | 85 | 165 | 580 | 740 | ||||||||||||
| Interest expense, net | (245 | ) | (235 | ) | (970 | ) | (950 | ) | ||||||||
| Operating income | 330 | 400 | 1,550 | 1,690 | ||||||||||||
| Gains on sales, consolidation and deconsolidation of facilities | - | - | - | - | ||||||||||||
| Impairment and restructuring charges, acquisition-related costs | ||||||||||||||||
| and litigation costs and settlements(a) | - | - | - | - | ||||||||||||
| Depreciation and amortization | (220 | ) | (200 | ) | (850 | ) | (810 | ) | ||||||||
| Adjusted EBITDA | $ | 550 | $ | 600 | $ | 2,400 | $ | 2,500 | ||||||||
| Net operating revenues | $ |
4,700 |
$ |
4,900 |
$ | 18,800 | $ | 19,200 | ||||||||
| Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin) |
11.7 |
% |
12.2 |
% | 12.8 | % | 13.0 | % | ||||||||
| (a) | Company does not forecast impairment and restructuring charges, acquisition-related costs, litigation costs and settlements, and gains on sales, consolidation and deconsolidation of facilities. |
|
TENET HEALTHCARE CORPORATION |
||||||||||||||||
|
Additional Supplemental Non-GAAP disclosures |
||||||||||||||||
| Table #4 – Reconciliation of Outlook Adjusted EBITDA to | ||||||||||||||||
| Outlook Normalized Income from Continuing Operations | ||||||||||||||||
| for the Year Ending December 31, 2016 | ||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| (Dollars in millions) | Q1 2016 | 2016 | ||||||||||||||
| Low | High | Low | High | |||||||||||||
| Adjusted EBITDA | $ | 550 | $ | 600 | $ | 2,400 | $ | 2,500 | ||||||||
| Depreciation and amortization | (220 | ) | (200 | ) | (850 | ) | (810 | ) | ||||||||
| Interest expense | (245 | ) | (235 | ) | (970 | ) | (950 | ) | ||||||||
| Normalized income from continuing operations before income taxes | 85 | 165 | 580 | 740 | ||||||||||||
| Income tax expense | (10 | ) | (50 | ) | (130 | ) | (200 | ) | ||||||||
| Normalized income from continuing operations | 75 | 115 | 450 | 540 | ||||||||||||
| Net income attributable to noncontrolling interests | (70 | ) | (60 | ) | (330 | ) | (310 | ) | ||||||||
| Normalized net income attributable to common shares | $ | 5 | $ | 55 | $ | 120 | $ | 230 | ||||||||
| Fully diluted weighted average share outstanding (in millions) | 101 | 101 | 102 | 102 | ||||||||||||
| Normalized fully diluted earnings per share – continuing operations | $ | 0.05 | $ | 0.54 | $ | 1.18 | $ | 2.25 | ||||||||
|
TENET HEALTHCARE CORPORATION |
||||||||||||||
|
Additional Supplemental Non-GAAP disclosures |
||||||||||||||
| Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow | ||||||||||||||
|
for the Year Ending December 31, 2016 |
||||||||||||||
| (Dollars in millions) | 2016 | |||||||||||||
| Low | High | |||||||||||||
| Net cash provided by operating activities | $ | 1,275 | $ | 1,435 | ||||||||||
| Less: | ||||||||||||||
| Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(a) | - | - | ||||||||||||
| Net cash used in operating activities from discontinued operations | (25 | ) | (15 | ) | ||||||||||
| Adjusted net cash provided by operating activities – continuing operations | $ | 1,300 | $ | 1,450 | ||||||||||
| Purchases of property and equipment – continuing operations | (900 | ) | (850 | ) | ||||||||||
| Adjusted free cash flow – continuing operations | $ | 400 | $ | 600 | ||||||||||
(a) Company does not forecast impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160222006580/en/
Tenet Healthcare Corporation
Corporate Communications
Charles
Nicolas, 469-893-2640
mediarelations@tenethealth.com
or
Investor
Relations
Brendan Strong, 469-893-6992
investorrelations@tenethealth.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
