|
☒
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2019
|
☐
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to
|
Nevada
(State of Incorporation)
|
95-2557091
(IRS Employer Identification No.)
|
Large accelerated filer x
|
Accelerated filer ¨
|
Non-accelerated filer ¨
|
|
|
|
Smaller reporting company ¨
|
|
Emerging growth company ¨
|
|
|
Page
|
||
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
252
|
|
|
$
|
411
|
|
Accounts receivable
|
|
2,744
|
|
|
2,595
|
|
||
Inventories of supplies, at cost
|
|
308
|
|
|
305
|
|
||
Income tax receivable
|
|
17
|
|
|
21
|
|
||
Assets held for sale
|
|
—
|
|
|
107
|
|
||
Other current assets
|
|
1,261
|
|
|
1,197
|
|
||
Total current assets
|
|
4,582
|
|
|
4,636
|
|
||
Investments and other assets
|
|
2,331
|
|
|
1,456
|
|
||
Deferred income taxes
|
|
291
|
|
|
312
|
|
||
Property and equipment, at cost, less accumulated depreciation and amortization
($5,382 at March 31, 2019 and $5,221 at December 31, 2018) |
|
6,996
|
|
|
6,993
|
|
||
Goodwill
|
|
7,283
|
|
|
7,281
|
|
||
Other intangible assets, at cost, less accumulated amortization
($1,010 at March 31, 2019 and $1,013 at December 31, 2018) |
|
1,675
|
|
|
1,731
|
|
||
Total assets
|
|
$
|
23,158
|
|
|
$
|
22,409
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current portion of long-term debt
|
|
$
|
158
|
|
|
$
|
182
|
|
Accounts payable
|
|
1,101
|
|
|
1,207
|
|
||
Accrued compensation and benefits
|
|
707
|
|
|
838
|
|
||
Professional and general liability reserves
|
|
224
|
|
|
216
|
|
||
Accrued interest payable
|
|
323
|
|
|
240
|
|
||
Liabilities held for sale
|
|
—
|
|
|
43
|
|
||
Other current liabilities
|
|
1,212
|
|
|
1,131
|
|
||
Total current liabilities
|
|
3,725
|
|
|
3,857
|
|
||
Long-term debt, net of current portion
|
|
14,814
|
|
|
14,644
|
|
||
Professional and general liability reserves
|
|
690
|
|
|
666
|
|
||
Defined benefit plan obligations
|
|
512
|
|
|
521
|
|
||
Deferred income taxes
|
|
36
|
|
|
36
|
|
||
Other long-term liabilities
|
|
1,268
|
|
|
578
|
|
||
Total liabilities
|
|
21,045
|
|
|
20,302
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Redeemable noncontrolling interests in equity of consolidated subsidiaries
|
|
1,439
|
|
|
1,420
|
|
||
Equity:
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
||||
Common stock, $0.05 par value; authorized 262,500,000 shares; 151,433,339 shares issued at
March 31, 2019 and 150,897,143 shares issued at December 31, 2018 |
|
7
|
|
|
7
|
|
||
Additional paid-in capital
|
|
4,748
|
|
|
4,747
|
|
||
Accumulated other comprehensive loss
|
|
(221
|
)
|
|
(223
|
)
|
||
Accumulated deficit
|
|
(2,254
|
)
|
|
(2,236
|
)
|
||
Common stock in treasury, at cost, 48,352,853 shares at March 31, 2019
and 48,359,705 shares at December 31, 2018 |
|
(2,414
|
)
|
|
(2,414
|
)
|
||
Total shareholders’ deficit
|
|
(134
|
)
|
|
(119
|
)
|
||
Noncontrolling interests
|
|
808
|
|
|
806
|
|
||
Total equity
|
|
674
|
|
|
687
|
|
||
Total liabilities and equity
|
|
$
|
23,158
|
|
|
$
|
22,409
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Net operating revenues
|
|
$
|
4,545
|
|
|
$
|
4,699
|
|
Equity in earnings of unconsolidated affiliates
|
|
34
|
|
|
25
|
|
||
Operating expenses:
|
|
|
|
|
||||
Salaries, wages and benefits
|
|
2,153
|
|
|
2,227
|
|
||
Supplies
|
|
741
|
|
|
774
|
|
||
Other operating expenses, net
|
|
1,074
|
|
|
1,060
|
|
||
Electronic health record incentives
|
|
(1
|
)
|
|
(1
|
)
|
||
Depreciation and amortization
|
|
208
|
|
|
204
|
|
||
Impairment and restructuring charges, and acquisition-related costs
|
|
19
|
|
|
47
|
|
||
Litigation and investigation costs
|
|
13
|
|
|
6
|
|
||
Net losses (gains) on sales, consolidation and deconsolidation of facilities
|
|
1
|
|
|
(110
|
)
|
||
Operating income
|
|
371
|
|
|
517
|
|
||
Interest expense
|
|
(251
|
)
|
|
(255
|
)
|
||
Other non-operating income (expense), net
|
|
1
|
|
|
(1
|
)
|
||
Loss from early extinguishment of debt
|
|
(47
|
)
|
|
(1
|
)
|
||
Income from continuing operations, before income taxes
|
|
74
|
|
|
260
|
|
||
Income tax expense
|
|
(17
|
)
|
|
(70
|
)
|
||
Income from continuing operations, before discontinued operations
|
|
57
|
|
|
190
|
|
||
Discontinued operations:
|
|
|
|
|
||||
Income from operations
|
|
10
|
|
|
1
|
|
||
Income tax expense
|
|
(2
|
)
|
|
—
|
|
||
Income from discontinued operations
|
|
8
|
|
|
1
|
|
||
Net income
|
|
65
|
|
|
191
|
|
||
Less: Net income available to noncontrolling interests
|
|
84
|
|
|
92
|
|
||
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
|
|
$
|
(19
|
)
|
|
$
|
99
|
|
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
|
|
|
|
|
||||
Income (loss) from continuing operations, net of tax
|
|
$
|
(27
|
)
|
|
$
|
98
|
|
Income from discontinued operations, net of tax
|
|
8
|
|
|
1
|
|
||
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders
|
|
$
|
(19
|
)
|
|
$
|
99
|
|
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation
common shareholders: |
|
|
|
|
||||
Basic
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(0.26
|
)
|
|
$
|
0.97
|
|
Discontinued operations
|
|
0.08
|
|
|
0.01
|
|
||
|
|
$
|
(0.18
|
)
|
|
$
|
0.98
|
|
Diluted
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(0.26
|
)
|
|
$
|
0.95
|
|
Discontinued operations
|
|
0.08
|
|
|
0.01
|
|
||
|
|
$
|
(0.18
|
)
|
|
$
|
0.96
|
|
Weighted average shares and dilutive securities outstanding (in thousands):
|
|
|
|
|
||||
Basic
|
|
102,788
|
|
|
101,392
|
|
||
Diluted
|
|
102,788
|
|
|
102,656
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
65
|
|
|
$
|
191
|
|
Other comprehensive income:
|
|
|
|
|
||||
Amortization of net actuarial loss included in other non-operating expense, net
|
|
3
|
|
|
4
|
|
||
Foreign currency translation adjustments
|
|
—
|
|
|
6
|
|
||
Other comprehensive income before income taxes
|
|
3
|
|
|
10
|
|
||
Income tax expense related to items of other comprehensive income
|
|
(1
|
)
|
|
(2
|
)
|
||
Total other comprehensive income, net of tax
|
|
2
|
|
|
8
|
|
||
Comprehensive net income
|
|
67
|
|
|
199
|
|
||
Less: Comprehensive income available to noncontrolling interests
|
|
84
|
|
|
92
|
|
||
Comprehensive income available (loss attributable) to
Tenet Healthcare Corporation common shareholders |
|
$
|
(17
|
)
|
|
$
|
107
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
65
|
|
|
$
|
191
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
208
|
|
|
204
|
|
||
Deferred income tax expense
|
|
19
|
|
|
70
|
|
||
Stock-based compensation expense
|
|
11
|
|
|
9
|
|
||
Impairment and restructuring charges, and acquisition-related costs
|
|
19
|
|
|
47
|
|
||
Litigation and investigation costs
|
|
13
|
|
|
6
|
|
||
Net losses (gains) on sales, consolidation and deconsolidation of facilities
|
|
1
|
|
|
(110
|
)
|
||
Loss from early extinguishment of debt
|
|
47
|
|
|
1
|
|
||
Equity in earnings of unconsolidated affiliates, net of distributions received
|
|
3
|
|
|
9
|
|
||
Amortization of debt discount and debt issuance costs
|
|
11
|
|
|
11
|
|
||
Pre-tax income from discontinued operations
|
|
(10
|
)
|
|
(1
|
)
|
||
Other items, net
|
|
(7
|
)
|
|
(1
|
)
|
||
Changes in cash from operating assets and liabilities:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
(158
|
)
|
|
(66
|
)
|
||
Inventories and other current assets
|
|
(115
|
)
|
|
(41
|
)
|
||
Income taxes
|
|
9
|
|
|
—
|
|
||
Accounts payable, accrued expenses and other current liabilities
|
|
(109
|
)
|
|
(183
|
)
|
||
Other long-term liabilities
|
|
37
|
|
|
1
|
|
||
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements
|
|
(32
|
)
|
|
(33
|
)
|
||
Net cash used in operating activities from discontinued operations, excluding income taxes
|
|
(2
|
)
|
|
(1
|
)
|
||
Net cash provided by operating activities
|
|
10
|
|
|
113
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Purchases of property and equipment — continuing operations
|
|
(192
|
)
|
|
(143
|
)
|
||
Purchases of businesses or joint venture interests, net of cash acquired
|
|
(2
|
)
|
|
(16
|
)
|
||
Proceeds from sales of facilities and other assets — continuing operations
|
|
41
|
|
|
425
|
|
||
Proceeds from sales of facilities and other assets — discontinued operations
|
|
17
|
|
|
—
|
|
||
Proceeds from sales of marketable securities, long-term investments and other assets
|
|
4
|
|
|
134
|
|
||
Purchases of equity investments
|
|
(1
|
)
|
|
(30
|
)
|
||
Other long-term assets
|
|
(2
|
)
|
|
7
|
|
||
Other items, net
|
|
(4
|
)
|
|
(4
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(139
|
)
|
|
373
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Repayments of borrowings under credit facility
|
|
(495
|
)
|
|
—
|
|
||
Proceeds from borrowings under credit facility
|
|
685
|
|
|
—
|
|
||
Repayments of other borrowings
|
|
(1,620
|
)
|
|
(91
|
)
|
||
Proceeds from other borrowings
|
|
1,507
|
|
|
7
|
|
||
Debt issuance costs
|
|
(18
|
)
|
|
—
|
|
||
Distributions paid to noncontrolling interests
|
|
(74
|
)
|
|
(64
|
)
|
||
Proceeds from sales of noncontrolling interests
|
|
4
|
|
|
5
|
|
||
Purchases of noncontrolling interests
|
|
(3
|
)
|
|
(9
|
)
|
||
Proceeds from exercise of stock options and employee stock purchase plan
|
|
1
|
|
|
9
|
|
||
Other items, net
|
|
(17
|
)
|
|
20
|
|
||
Net cash used in financing activities
|
|
(30
|
)
|
|
(123
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(159
|
)
|
|
363
|
|
||
Cash and cash equivalents at beginning of period
|
|
411
|
|
|
611
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
252
|
|
|
$
|
974
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
||
Interest paid, net of capitalized interest
|
|
$
|
(158
|
)
|
|
$
|
(169
|
)
|
Income tax refunds, net
|
|
$
|
9
|
|
|
$
|
1
|
|
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
||||||
At March 31, 2019:
|
|
|
|
|
|
|
||||||
Capitalized software costs
|
|
$
|
1,607
|
|
|
$
|
(847
|
)
|
|
$
|
760
|
|
Trade names
|
|
102
|
|
|
—
|
|
|
102
|
|
|||
Contracts
|
|
870
|
|
|
(82
|
)
|
|
788
|
|
|||
Other
|
|
106
|
|
|
(81
|
)
|
|
25
|
|
|||
Total
|
|
$
|
2,685
|
|
|
$
|
(1,010
|
)
|
|
$
|
1,675
|
|
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
||||||
At December 31, 2018:
|
|
|
|
|
|
|
||||||
Capitalized software costs
|
|
$
|
1,667
|
|
|
$
|
(858
|
)
|
|
$
|
809
|
|
Trade names
|
|
102
|
|
|
—
|
|
|
102
|
|
|||
Contracts
|
|
871
|
|
|
(76
|
)
|
|
795
|
|
|||
Other
|
|
104
|
|
|
(79
|
)
|
|
25
|
|
|||
Total
|
|
$
|
2,744
|
|
|
$
|
(1,013
|
)
|
|
$
|
1,731
|
|
|
|
|
|
Nine Months
Ending |
|
Years Ending
|
|
Later Years
|
||||||||||||||||||||
|
|
|
|
December 31,
|
|
|||||||||||||||||||||||
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
|||||||||||||||
Amortization of intangible assets
|
|
$
|
998
|
|
|
$
|
103
|
|
|
$
|
129
|
|
|
$
|
115
|
|
|
$
|
98
|
|
|
$
|
89
|
|
|
$
|
464
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net operating revenues
|
|
$
|
568
|
|
|
$
|
574
|
|
Net income
|
|
$
|
150
|
|
|
$
|
116
|
|
Net income available to the investees
|
|
$
|
106
|
|
|
$
|
71
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Continuing operations:
|
|
|
|
|
|
|
||
Patient accounts receivable
|
|
$
|
2,577
|
|
|
$
|
2,427
|
|
Estimated future recoveries
|
|
151
|
|
|
148
|
|
||
Net cost reports and settlements payable and valuation allowances
|
|
18
|
|
|
18
|
|
||
|
|
2,746
|
|
|
2,593
|
|
||
Discontinued operations
|
|
(2
|
)
|
|
2
|
|
||
Accounts receivable, net
|
|
$
|
2,744
|
|
|
$
|
2,595
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Estimated costs for:
|
|
|
|
|
|
|
||
Uninsured patients
|
|
$
|
158
|
|
|
$
|
146
|
|
Charity care patients
|
|
34
|
|
|
35
|
|
||
Total
|
|
$
|
192
|
|
|
$
|
181
|
|
Medicaid DSH and other supplemental revenues
|
|
$
|
199
|
|
|
$
|
220
|
|
December 31, 2018
|
|
$
|
169
|
|
March 31, 2019
|
|
166
|
|
|
Increase/(decrease)
|
|
$
|
(3
|
)
|
January 1, 2018
|
|
$
|
171
|
|
March 31, 2018
|
|
158
|
|
|
Increase/(decrease)
|
|
$
|
(13
|
)
|
|
|
|
|
|
|
Contract Liability-
|
|
Contract Liability-
|
||||||||
|
|
|
|
Contract Asset-
|
|
Current
|
|
Long-Term
|
||||||||
|
|
Receivables
|
|
Unbilled Revenue
|
|
Deferred Revenue
|
|
Deferred Revenue
|
||||||||
December 31, 2018
|
|
$
|
42
|
|
|
$
|
11
|
|
|
$
|
61
|
|
|
$
|
20
|
|
March 31, 2019
|
|
90
|
|
|
11
|
|
|
64
|
|
|
20
|
|
||||
Increase/(decrease)
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
January 1, 2018
|
|
$
|
89
|
|
|
$
|
10
|
|
|
$
|
80
|
|
|
$
|
21
|
|
March 31, 2018
|
|
99
|
|
|
10
|
|
|
78
|
|
|
29
|
|
||||
Increase/(decrease)
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
8
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Significant disposals:
|
|
|
|
|
||||
Income (loss) from continuing operations, before income taxes
|
|
|
|
|
||||
Chicago-area (includes a $7 million loss on sale in the 2019 period and $17 million of impairment charges in the 2018 period)
|
|
$
|
(12
|
)
|
|
$
|
(16
|
)
|
Philadelphia (includes a $2 million loss on sale in the 2018 period)
|
|
1
|
|
|
(9
|
)
|
||
MacNeal (includes a $98 million gain on sale in the 2018 period)
|
|
1
|
|
|
101
|
|
||
Aspen
|
|
—
|
|
|
3
|
|
||
Total
|
|
$
|
(10
|
)
|
|
$
|
79
|
|
Component of Lease Balances
|
|
Classification in Condensed Consolidated Balance Sheet
|
|
March 31, 2019
|
||
Assets:
|
|
|
|
|
||
Operating lease assets
|
|
Investments and other assets
|
|
$
|
799
|
|
Finance lease assets
|
|
Property and equipment, at cost, less
accumulated depreciation and amortization |
|
441
|
|
|
Total leased assets
|
|
|
|
$
|
1,240
|
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
||
Operating lease liabilities:
|
|
|
|
|
||
Current
|
|
Other current liabilities
|
|
$
|
146
|
|
Long-term
|
|
Other long-term liabilities
|
|
714
|
|
|
Total operating lease liabilities
|
|
|
|
860
|
|
|
Finance lease liabilities:
|
|
|
|
|
||
Current
|
|
Current portion of long-term debt
|
|
141
|
|
|
Long-term
|
|
Long-term debt, net of current portion
|
|
224
|
|
|
Total finance lease liabilities
|
|
|
|
365
|
|
|
Total lease liabilities
|
|
|
|
$
|
1,225
|
|
|
|
Classification on Condensed Consolidated
|
|
Three Months Ended
|
||
Component of Lease Expense
|
|
Statements of Operations
|
|
March 31, 2019
|
||
Operating lease expense
|
|
Other operating expenses, net
|
|
$
|
50
|
|
Finance lease expense:
|
|
|
|
|
||
Amortization of leased assets
|
|
Depreciation and amortization
|
|
18
|
|
|
Interest on lease liabilities
|
|
Interest expense
|
|
5
|
|
|
Total finance lease expense
|
|
|
|
23
|
|
|
Variable and short term-lease expense
|
|
Other operating expenses, net
|
|
34
|
|
|
Total lease expense
|
|
|
|
$
|
107
|
|
|
|
Three Months Ended
|
||
|
|
March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash outflows from operating leases
|
|
$
|
47
|
|
Operating cash outflows from finance leases
|
|
$
|
5
|
|
Financing cash outflows from finance leases
|
|
$
|
36
|
|
|
|
|
||
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases
|
|
$
|
28
|
|
Finance leases
|
|
$
|
36
|
|
|
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
2019
|
|
$
|
144
|
|
|
$
|
120
|
|
|
$
|
264
|
|
2020
|
|
171
|
|
|
122
|
|
|
293
|
|
|||
2021
|
|
152
|
|
|
64
|
|
|
216
|
|
|||
2022
|
|
132
|
|
|
16
|
|
|
148
|
|
|||
2023
|
|
110
|
|
|
13
|
|
|
123
|
|
|||
Later years
|
|
339
|
|
|
123
|
|
|
462
|
|
|||
Total lease payments
|
|
1,048
|
|
|
458
|
|
|
1,506
|
|
|||
Less: Imputed interest
|
|
188
|
|
|
93
|
|
|
281
|
|
|||
Total lease obligations
|
|
860
|
|
|
365
|
|
|
1,225
|
|
|||
Less: Current obligations
|
|
146
|
|
|
141
|
|
|
287
|
|
|||
Long-term lease obligations
|
|
$
|
714
|
|
|
$
|
224
|
|
|
$
|
938
|
|
|
|
|
Years Ending December 31,
|
|
Later Years
|
||||||||||||||||||||||
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
|||||||||||||||
Capital lease obligations
|
$
|
425
|
|
|
$
|
140
|
|
|
$
|
95
|
|
|
$
|
57
|
|
|
$
|
37
|
|
|
$
|
21
|
|
|
$
|
75
|
|
Long-term non-cancelable operating leases
|
$
|
932
|
|
|
$
|
171
|
|
|
$
|
151
|
|
|
$
|
133
|
|
|
$
|
113
|
|
|
$
|
92
|
|
|
$
|
272
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Senior unsecured notes:
|
|
|
|
|
|
|
||
5.500% due 2019
|
|
$
|
—
|
|
|
$
|
468
|
|
6.750% due 2020
|
|
—
|
|
|
300
|
|
||
8.125% due 2022
|
|
2,800
|
|
|
2,800
|
|
||
6.750% due 2023
|
|
1,872
|
|
|
1,872
|
|
||
7.000% due 2025
|
|
478
|
|
|
478
|
|
||
6.875% due 2031
|
|
362
|
|
|
362
|
|
||
Senior secured first lien notes:
|
|
|
|
|
|
|
||
4.750% due 2020
|
|
500
|
|
|
500
|
|
||
6.000% due 2020
|
|
1,800
|
|
|
1,800
|
|
||
4.500% due 2021
|
|
850
|
|
|
850
|
|
||
4.375% due 2021
|
|
1,050
|
|
|
1,050
|
|
||
4.625% due 2024
|
|
1,870
|
|
|
1,870
|
|
||
Senior secured second lien notes:
|
|
|
|
|
||||
7.500% due 2022
|
|
—
|
|
|
750
|
|
||
5.125% due 2025
|
|
1,410
|
|
|
1,410
|
|
||
6.250% due 2027
|
|
1,500
|
|
|
—
|
|
||
Credit facility due 2020
|
|
190
|
|
|
—
|
|
||
Finance leases and mortgage notes
|
|
473
|
|
|
500
|
|
||
Unamortized issue costs and note discounts
|
|
(183
|
)
|
|
(184
|
)
|
||
Total long-term debt
|
|
14,972
|
|
|
14,826
|
|
||
Less current portion
|
|
158
|
|
|
182
|
|
||
Long-term debt, net of current portion
|
|
$
|
14,814
|
|
|
$
|
14,644
|
|
|
|
Options
|
|
Weighted Average
Exercise Price Per Share |
|
Aggregate
Intrinsic Value |
|
Weighted Average
Remaining Life |
|||||
|
|
|
|
|
|
(In Millions)
|
|
|
|||||
Outstanding at December 31, 2018
|
|
2,262,743
|
|
|
$
|
19.12
|
|
|
|
|
|
||
Granted
|
|
230,713
|
|
|
28.28
|
|
|
|
|
|
|||
Exercised
|
|
(76,159
|
)
|
|
4.56
|
|
|
|
|
|
|||
Forfeited/Expired
|
|
(120,871
|
)
|
|
19.25
|
|
|
|
|
|
|||
Outstanding at March 31, 2019
|
|
2,296,426
|
|
|
$
|
20.52
|
|
|
$
|
19
|
|
|
6.6 years
|
Vested and expected to vest at March 31, 2019
|
|
2,296,426
|
|
|
$
|
20.52
|
|
|
$
|
19
|
|
|
6.6 years
|
Exercisable at March 31, 2019
|
|
684,628
|
|
|
$
|
19.03
|
|
|
$
|
7
|
|
|
3.3 years
|
|
|
March 29, 2019
|
|
February 27, 2019
|
|
February 28, 2018
|
Expected volatility
|
|
48%
|
|
48%
|
|
46%
|
Expected dividend yield
|
|
0%
|
|
0%
|
|
0%
|
Expected life
|
|
6.2 years
|
|
6.2 years
|
|
6.2 years
|
Expected forfeiture rate
|
|
0%
|
|
0%
|
|
0%
|
Risk-free interest rate
|
|
2.26%
|
|
2.53%
|
|
2.72%
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Number of
Options |
|
Weighted Average
Remaining Contractual Life |
|
Weighted Average
Exercise Price |
|
Number of
Options |
|
Weighted Average
Exercise Price |
||||||
$4.57 to $19.759
|
|
1,246,675
|
|
|
6.0 years
|
|
18.15
|
|
|
413,960
|
|
|
16.46
|
|
||
$19.76 to $35.430
|
|
1,049,751
|
|
|
7.4 years
|
|
23.33
|
|
|
270,668
|
|
|
22.94
|
|
||
|
|
2,296,426
|
|
|
6.6 years
|
|
$
|
20.52
|
|
|
684,628
|
|
|
$
|
19.03
|
|
|
|
Restricted Stock Units
|
|
Weighted Average Grant
Date Fair Value Per Unit |
|||
Unvested at December 31, 2018
|
|
1,884,130
|
|
|
$
|
32.25
|
|
Granted
|
|
1,128,005
|
|
|
26.49
|
|
|
Vested
|
|
(477,293
|
)
|
|
23.94
|
|
|
Forfeited
|
|
(298,680
|
)
|
|
25.02
|
|
|
Unvested at March 31, 2019
|
|
2,236,162
|
|
|
$
|
32.09
|
|
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Loss |
|
Accumulated
Deficit |
|
Treasury
Stock |
|
Noncontrolling
Interests |
|
Total Equity
|
|||||||||||||||||
|
|
Shares
Outstanding |
|
Issued Par
Amount |
|
|
|
|
|
|
|||||||||||||||||||||
Balances at December 31, 2018
|
|
102,537
|
|
|
$
|
7
|
|
|
$
|
4,747
|
|
|
$
|
(223
|
)
|
|
$
|
(2,236
|
)
|
|
$
|
(2,414
|
)
|
|
$
|
806
|
|
|
$
|
687
|
|
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
37
|
|
|
18
|
|
|||||||
Distributions paid to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
(37
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Accretion of redeemable noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||||
Purchases (sales) of businesses and noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||||
Cumulative effect of accounting change
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Stock-based compensation expense, tax benefit and issuance of common stock
|
|
543
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||||
Balances at March 31, 2019
|
|
103,080
|
|
|
$
|
7
|
|
|
$
|
4,748
|
|
|
$
|
(221
|
)
|
|
$
|
(2,254
|
)
|
|
$
|
(2,414
|
)
|
|
$
|
808
|
|
|
$
|
674
|
|
Balances at December 31, 2017
|
|
100,972
|
|
|
$
|
7
|
|
|
$
|
4,859
|
|
|
$
|
(204
|
)
|
|
$
|
(2,390
|
)
|
|
$
|
(2,419
|
)
|
|
$
|
686
|
|
|
$
|
539
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99
|
|
|
—
|
|
|
31
|
|
|
130
|
|
|||||||
Distributions paid to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||||
Accretion of redeemable noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|||||||
Purchases (sales) of businesses and noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(6
|
)
|
|||||||
Cumulative effect of accounting change
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation expense, tax benefit and issuance of common stock
|
|
1,017
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
16
|
|
|||||||
Balances at March 31, 2018
|
|
101,989
|
|
|
$
|
7
|
|
|
$
|
4,833
|
|
|
$
|
(239
|
)
|
|
$
|
(2,248
|
)
|
|
$
|
(2,418
|
)
|
|
$
|
681
|
|
|
$
|
616
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Hospital Operations and other:
|
|
|
|
|
|
|
||
Net patient service revenues from hospitals and related outpatient facilities
|
|
|
|
|
||||
Medicare
|
|
$
|
758
|
|
|
$
|
782
|
|
Medicaid
|
|
314
|
|
|
321
|
|
||
Managed care
|
|
2,354
|
|
|
2,368
|
|
||
Uninsured
|
|
1
|
|
|
37
|
|
||
Indemnity and other
|
|
155
|
|
|
135
|
|
||
Total
|
|
3,582
|
|
|
3,643
|
|
||
Physician practices revenues
|
|
270
|
|
|
280
|
|
||
Health plans
|
|
—
|
|
|
6
|
|
||
Revenue from other sources
|
|
10
|
|
|
18
|
|
||
Hospital Operations and other total prior to inter-segment eliminations
|
|
3,862
|
|
|
3,947
|
|
||
Ambulatory Care
|
|
480
|
|
|
498
|
|
||
Conifer
|
|
349
|
|
|
404
|
|
||
Inter-segment eliminations
|
|
(146
|
)
|
|
(150
|
)
|
||
Net operating revenues
|
|
$
|
4,545
|
|
|
$
|
4,699
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net patient service revenues
|
|
$
|
451
|
|
|
$
|
469
|
|
Management fees
|
|
23
|
|
|
23
|
|
||
Revenue from other sources
|
|
6
|
|
|
6
|
|
||
Net operating revenues
|
|
$
|
480
|
|
|
$
|
498
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Revenue cycle services – Tenet
|
|
$
|
142
|
|
|
$
|
144
|
|
Revenue cycle services – other customers
|
|
180
|
|
|
232
|
|
||
Other services – Tenet
|
|
4
|
|
|
6
|
|
||
Other services – other customers
|
|
23
|
|
|
22
|
|
||
Net operating revenues
|
|
$
|
349
|
|
|
$
|
404
|
|
|
|
|
|
Nine Months
Ending |
|
Years Ending
|
|
Later Years
|
||||||||||||||||||||
|
|
|
|
December 31,
|
|
|||||||||||||||||||||||
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
|||||||||||||||
Performance obligations
|
|
$
|
7,748
|
|
|
$
|
448
|
|
|
$
|
597
|
|
|
$
|
595
|
|
|
$
|
595
|
|
|
$
|
595
|
|
|
$
|
4,918
|
|
|
|
Balances at
Beginning
of Period
|
|
Litigation and
Investigation
Costs
|
|
Cash
Payments
|
|
Balances at
End of
Period
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2019
|
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
(8
|
)
|
|
$
|
13
|
|
Three Months Ended March 31, 2018
|
|
$
|
12
|
|
|
$
|
6
|
|
|
$
|
(7
|
)
|
|
$
|
11
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Balances at beginning of period
|
|
$
|
1,420
|
|
|
$
|
1,866
|
|
Net income
|
|
47
|
|
|
61
|
|
||
Distributions paid to noncontrolling interests
|
|
(37
|
)
|
|
(30
|
)
|
||
Accretion of redeemable noncontrolling interests
|
|
5
|
|
|
37
|
|
||
Purchases and sales of businesses and noncontrolling interests, net
|
|
4
|
|
|
8
|
|
||
Balances at end of period
|
|
$
|
1,439
|
|
|
$
|
1,942
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Hospital Operations and other
|
|
$
|
420
|
|
|
$
|
431
|
|
Ambulatory Care
|
|
723
|
|
|
713
|
|
||
Conifer
|
|
296
|
|
|
276
|
|
||
Redeemable noncontrolling interests
|
|
$
|
1,439
|
|
|
$
|
1,420
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Hospital Operations and other
|
|
$
|
(6
|
)
|
|
$
|
6
|
|
Ambulatory Care
|
|
33
|
|
|
35
|
|
||
Conifer
|
|
20
|
|
|
20
|
|
||
Net income available to redeemable noncontrolling interests
|
|
$
|
47
|
|
|
$
|
61
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Tax expense at statutory federal rate of 21%
|
|
$
|
16
|
|
|
$
|
55
|
|
State income taxes, net of federal income tax benefit
|
|
3
|
|
|
10
|
|
||
Tax attributable to noncontrolling interests
|
|
(17
|
)
|
|
(18
|
)
|
||
Nondeductible goodwill
|
|
—
|
|
|
5
|
|
||
Nontaxable gains
|
|
(1
|
)
|
|
—
|
|
||
Stock-based compensation
|
|
(1
|
)
|
|
4
|
|
||
Change in valuation allowance-interest expense limitation
|
|
24
|
|
|
12
|
|
||
Other items
|
|
(7
|
)
|
|
2
|
|
||
Income tax expense
|
|
$
|
17
|
|
|
$
|
70
|
|
|
|
Net Income Available (Loss Attributable)
to Common Shareholders (Numerator) |
|
Weighted
Average Shares (Denominator) |
|
Per-Share
Amount |
|||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
||
Net loss attributable to Tenet Healthcare Corporation common shareholders
for basic loss per share |
|
$
|
(27
|
)
|
|
102,788
|
|
|
$
|
(0.26
|
)
|
Effect of dilutive stock options, restricted stock units and deferred compensation units
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share
|
|
$
|
(27
|
)
|
|
102,788
|
|
|
$
|
(0.26
|
)
|
|
|
|
|
|
|
|
|||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
||
Net income available to Tenet Healthcare Corporation common shareholders
for basic earnings per share |
|
$
|
98
|
|
|
101,392
|
|
|
$
|
0.97
|
|
Effect of dilutive stock options, restricted stock units and deferred compensation units
|
|
—
|
|
|
1,264
|
|
|
(0.02
|
)
|
||
Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share
|
|
$
|
98
|
|
|
102,656
|
|
|
$
|
0.95
|
|
|
|
December 31, 2018
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Long-lived assets held for sale
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
Long-lived assets held and used
|
|
130
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Current assets
|
|
$
|
2
|
|
|
$
|
2
|
|
Property and equipment
|
|
5
|
|
|
3
|
|
||
Other intangible assets
|
|
1
|
|
|
1
|
|
||
Goodwill
|
|
3
|
|
|
20
|
|
||
Other long-term assets, including previously held equity method investments
|
|
(1
|
)
|
|
1
|
|
||
Current liabilities
|
|
—
|
|
|
(1
|
)
|
||
Long-term liabilities
|
|
(1
|
)
|
|
(1
|
)
|
||
Redeemable noncontrolling interests in equity of consolidated subsidiaries
|
|
(1
|
)
|
|
(9
|
)
|
||
Noncontrolling interests
|
|
(1
|
)
|
|
—
|
|
||
Cash paid, net of cash acquired
|
|
(2
|
)
|
|
(16
|
)
|
||
Gains on consolidations
|
|
$
|
5
|
|
|
$
|
—
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets:
|
|
|
|
|
|
|
||
Hospital Operations and other
|
|
$
|
16,070
|
|
|
$
|
15,684
|
|
Ambulatory Care
|
|
6,014
|
|
|
5,711
|
|
||
Conifer
|
|
1,074
|
|
|
1,014
|
|
||
Total
|
|
$
|
23,158
|
|
|
$
|
22,409
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Capital expenditures:
|
|
|
|
|
|
|
||
Hospital Operations and other
|
|
$
|
170
|
|
|
$
|
120
|
|
Ambulatory Care
|
|
20
|
|
|
15
|
|
||
Conifer
|
|
2
|
|
|
8
|
|
||
Total
|
|
$
|
192
|
|
|
$
|
143
|
|
|
|
|
|
|
||||
Net operating revenues:
|
|
|
|
|
|
|
||
Hospital Operations and other total prior to inter-segment eliminations(1)
|
|
$
|
3,862
|
|
|
$
|
3,947
|
|
Ambulatory Care
|
|
480
|
|
|
498
|
|
||
Conifer
|
|
|
|
|
|
|
||
Tenet
|
|
146
|
|
|
150
|
|
||
Other customers
|
|
203
|
|
|
254
|
|
||
Total Conifer revenues
|
|
349
|
|
|
404
|
|
||
Inter-segment eliminations
|
|
(146
|
)
|
|
(150
|
)
|
||
Total
|
|
$
|
4,545
|
|
|
$
|
4,699
|
|
|
|
|
|
|
||||
Equity in earnings of unconsolidated affiliates:
|
|
|
|
|
|
|
||
Hospital Operations and other
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
Ambulatory Care
|
|
31
|
|
|
27
|
|
||
Total
|
|
$
|
34
|
|
|
$
|
25
|
|
|
|
|
|
|
||||
Adjusted EBITDA(2):
|
|
|
|
|
|
|
||
Hospital Operations and other(2)
|
|
$
|
337
|
|
|
$
|
402
|
|
Ambulatory Care
|
|
177
|
|
|
165
|
|
||
Conifer
|
|
99
|
|
|
98
|
|
||
Total
|
|
$
|
613
|
|
|
$
|
665
|
|
|
|
|
|
|
||||
Depreciation and amortization:
|
|
|
|
|
|
|
||
Hospital Operations and other
|
|
$
|
179
|
|
|
$
|
175
|
|
Ambulatory Care
|
|
18
|
|
|
17
|
|
||
Conifer
|
|
11
|
|
|
12
|
|
||
Total
|
|
$
|
208
|
|
|
$
|
204
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Adjusted EBITDA(2)
|
|
$
|
613
|
|
|
$
|
665
|
|
Loss from divested and closed businesses
(i.e., the Company’s health plan businesses) |
|
(1
|
)
|
|
(1
|
)
|
||
Depreciation and amortization
|
|
(208
|
)
|
|
(204
|
)
|
||
Impairment and restructuring charges, and acquisition-related costs
|
|
(19
|
)
|
|
(47
|
)
|
||
Litigation and investigation costs
|
|
(13
|
)
|
|
(6
|
)
|
||
Interest expense
|
|
(251
|
)
|
|
(255
|
)
|
||
Loss from early extinguishment of debt
|
|
(47
|
)
|
|
(1
|
)
|
||
Other non-operating income (expense), net
|
|
1
|
|
|
(1
|
)
|
||
Net gains (losses) on sales, consolidation and deconsolidation of facilities
|
|
(1
|
)
|
|
110
|
|
||
Income from continuing operations, before income taxes
|
|
$
|
74
|
|
|
$
|
260
|
|
|
(1)
|
Hospital Operations and other revenues includes health plan revenues of less than $1 million for the three months ended March 31, 2019 and $6 million for the three months ended March 31, 2018, respectively.
|
(2)
|
Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of $(1) million for both the three months ended March 31, 2019 and 2018.
|
•
|
Management Overview
|
•
|
Forward-Looking Statements
|
•
|
Sources of Revenue for Our Hospital Operations and Other Segment
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Critical Accounting Estimates
|
|
|
Continuing Operations
Three Months Ended March 31, |
|
|||||||
Selected Operating Statistics
|
|
2019
|
|
2018
|
|
Increase
(Decrease) |
|
|||
Hospital Operations and other – hospitals and related outpatient facilities
|
|
|
|
|
|
|
|
|||
Number of hospitals (at end of period)
|
|
65
|
|
|
69
|
|
|
(4
|
)
|
(1)
|
Total admissions
|
|
174,726
|
|
|
182,306
|
|
|
(4.2
|
)%
|
|
Adjusted patient admissions(2)
|
|
308,133
|
|
|
320,868
|
|
|
(4.0
|
)%
|
|
Paying admissions (excludes charity and uninsured)
|
|
164,793
|
|
|
172,490
|
|
|
(4.5
|
)%
|
|
Charity and uninsured admissions
|
|
9,933
|
|
|
9,816
|
|
|
1.2
|
%
|
|
Emergency department visits
|
|
657,449
|
|
|
697,001
|
|
|
(5.7
|
)%
|
|
Total surgeries
|
|
103,013
|
|
|
110,231
|
|
|
(6.5
|
)%
|
|
Patient days — total
|
|
822,079
|
|
|
858,648
|
|
|
(4.3
|
)%
|
|
Adjusted patient days(2)
|
|
1,420,170
|
|
|
1,486,139
|
|
|
(4.4
|
)%
|
|
Average length of stay (days)
|
|
4.70
|
|
|
4.71
|
|
|
(0.2
|
)%
|
|
Average licensed beds
|
|
17,455
|
|
|
18,685
|
|
|
(6.6
|
)%
|
|
Utilization of licensed beds(3)
|
|
52.3
|
%
|
|
51.1
|
%
|
|
1.2
|
%
|
(1)
|
Total visits
|
|
1,714,392
|
|
|
1,842,539
|
|
|
(7.0
|
)%
|
|
Paying visits (excludes charity and uninsured)
|
|
1,603,712
|
|
|
1,725,976
|
|
|
(7.1
|
)%
|
|
Charity and uninsured visits
|
|
110,680
|
|
|
116,563
|
|
|
(5.0
|
)%
|
|
Ambulatory Care
|
|
|
|
|
|
|
|
|||
Total consolidated facilities (at end of period)
|
|
226
|
|
|
230
|
|
|
(4
|
)
|
(1)
|
Total cases
|
|
496,988
|
|
|
495,301
|
|
|
0.3
|
%
|
|
|
|
|
(1)
|
The change is the difference between the 2019 and 2018 amounts shown.
|
|
(2)
|
Adjusted patient admissions/days represents actual patient admissions/days adjusted to include outpatient services provided by facilities in our Hospital Operations and other segment by multiplying actual patient admissions/days by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues.
|
|
(3)
|
Utilization of licensed beds represents patient days divided by number of days in the period divided by average licensed beds.
|
|
|
Continuing Operations
Three Months Ended March 31, |
|||||||||
Revenues
|
|
2019
|
|
2018
|
|
Increase
(Decrease) |
|||||
Net operating revenues
|
|
|
|
|
|
|
|||||
Hospital Operations and other prior to inter-segment eliminations
|
|
$
|
3,862
|
|
|
$
|
3,947
|
|
|
(2.2
|
)%
|
Ambulatory Care
|
|
480
|
|
|
498
|
|
|
(3.6
|
)%
|
||
Conifer
|
|
349
|
|
|
404
|
|
|
(13.6
|
)%
|
||
Inter-segment eliminations
|
|
(146
|
)
|
|
(150
|
)
|
|
(2.7
|
)%
|
||
Total
|
|
$
|
4,545
|
|
|
$
|
4,699
|
|
|
(3.3
|
)%
|
|
|
Continuing Operations
Three Months Ended March 31, |
|||||||||
Selected Operating Expenses
|
|
2019
|
|
2018
|
|
Increase
(Decrease) |
|||||
Hospital Operations and other
|
|
|
|
|
|
|
|||||
Salaries, wages and benefits
|
|
$
|
1,815
|
|
|
$
|
1,840
|
|
|
(1.4
|
)%
|
Supplies
|
|
641
|
|
|
666
|
|
|
(3.8
|
)%
|
||
Other operating expenses
|
|
928
|
|
|
889
|
|
|
4.4
|
%
|
||
Total
|
|
$
|
3,384
|
|
|
$
|
3,395
|
|
|
(0.3
|
)%
|
Ambulatory Care
|
|
|
|
|
|
|
|
|
|
||
Salaries, wages and benefits
|
|
$
|
153
|
|
|
$
|
162
|
|
|
(5.6
|
)%
|
Supplies
|
|
99
|
|
|
106
|
|
|
(6.6
|
)%
|
||
Other operating expenses
|
|
82
|
|
|
92
|
|
|
(10.9
|
)%
|
||
Total
|
|
$
|
334
|
|
|
$
|
360
|
|
|
(7.2
|
)%
|
Conifer
|
|
|
|
|
|
|
|
|
|
||
Salaries, wages and benefits
|
|
$
|
185
|
|
|
$
|
225
|
|
|
(17.8
|
)%
|
Supplies
|
|
1
|
|
|
2
|
|
|
(50.0
|
)%
|
||
Other operating expenses
|
|
64
|
|
|
79
|
|
|
(19.0
|
)%
|
||
Total
|
|
$
|
250
|
|
|
$
|
306
|
|
|
(18.3
|
)%
|
Total
|
|
|
|
|
|
|
|
|
|
||
Salaries, wages and benefits
|
|
$
|
2,153
|
|
|
$
|
2,227
|
|
|
(3.3
|
)%
|
Supplies
|
|
741
|
|
|
774
|
|
|
(4.3
|
)%
|
||
Other operating expenses
|
|
1,074
|
|
|
1,060
|
|
|
1.3
|
%
|
||
Total
|
|
$
|
3,968
|
|
|
$
|
4,061
|
|
|
(2.3
|
)%
|
Rent/lease expense(1)
|
|
|
|
|
|
|
|
|
|
||
Hospital Operations and other
|
|
$
|
59
|
|
|
$
|
59
|
|
|
—
|
%
|
Ambulatory Care
|
|
20
|
|
|
20
|
|
|
—
|
%
|
||
Conifer
|
|
3
|
|
|
4
|
|
|
(25.0
|
)%
|
||
Total
|
|
$
|
82
|
|
|
$
|
83
|
|
|
(1.2
|
)%
|
|
|
|
(1)
|
Included in other operating expenses.
|
|
|
Continuing Operations
Three Months Ended March 31, |
|||||||||
Selected Operating Expenses per Adjusted Patient Admission
|
|
2019
|
|
2018
|
|
Increase
(Decrease) |
|||||
Hospital Operations and other
|
|
|
|
|
|
|
|||||
Salaries, wages and benefits per adjusted patient admission(1)
|
|
$
|
5,888
|
|
|
$
|
5,727
|
|
|
2.8
|
%
|
Supplies per adjusted patient admission(1)
|
|
2,078
|
|
|
2,079
|
|
|
—
|
%
|
||
Other operating expenses per adjusted patient admission(1)
|
|
3,013
|
|
|
2,755
|
|
|
9.4
|
%
|
||
Total per adjusted patient admission
|
|
$
|
10,979
|
|
|
$
|
10,561
|
|
|
4.0
|
%
|
|
|
|
(1)
|
Calculation excludes the expenses from our health plan businesses. Adjusted patient admissions represents actual patient admissions adjusted to include outpatient services provided by facilities in our Hospital Operations and other segment by multiplying actual patient admissions by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues.
|
•
|
Net cash provided by operating activities before interest, taxes, discontinued operations and restructuring charges, acquisition-related costs, and litigation costs and settlements of $193 million;
|
•
|
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements of $32 million;
|
•
|
Capital expenditures of $192 million;
|
•
|
Proceeds from the sales of facilities and other assets in continuing operations of $41 million;
|
•
|
Interest payments of $158 million;
|
•
|
$1.5 billion of proceeds from the issuance of $1.5 billion aggregate principal amount of 6.250% senior secured second lien notes due 2027;
|
•
|
$310 million of payments to purchase $300 million aggregate principal amount of our outstanding 6.750% senior notes due 2020;
|
•
|
$778 million of payments to purchase $750 million aggregate principal amount of our outstanding 7.500% senior secured second lien notes due 2022;
|
•
|
$468 million to repay $468 million aggregate principal amount of our outstanding 5.500% senior unsecured notes due 2019 upon maturity; and
|
•
|
$74 million of distributions paid to noncontrolling interests.
|
•
|
Decreased net cash of $25 million related to the California provider fee program due to the timing of payments from the state; and
|
•
|
The timing of other working capital items.
|
|
|
Three Months Ended
March 31, |
|||||||
Net Patient Service Revenues Less Implicit Price Concessions from:
|
|
2019
|
|
2018
|
|
Increase
(Decrease)(1) |
|||
Medicare
|
|
21.2
|
%
|
|
21.5
|
%
|
|
(0.3
|
)%
|
Medicaid
|
|
8.8
|
%
|
|
8.8
|
%
|
|
—
|
%
|
Managed care(2)
|
|
65.7
|
%
|
|
65.0
|
%
|
|
0.7
|
%
|
Uninsured
|
|
—
|
%
|
|
1.0
|
%
|
|
(1.0
|
)%
|
Indemnity and other
|
|
4.3
|
%
|
|
3.7
|
%
|
|
0.6
|
%
|
|
|
|
(1)
|
The change is the difference between the 2019 and 2018 percentages shown.
|
|
(2)
|
Includes Medicare and Medicaid managed care programs.
|
|
|
Three Months Ended
March 31, |
|||||||
Admissions from:
|
|
2019
|
|
2018
|
|
Increase
(Decrease)(1) |
|||
Medicare
|
|
26.1
|
%
|
|
26.9
|
%
|
|
(0.8
|
)%
|
Medicaid
|
|
6.0
|
%
|
|
6.2
|
%
|
|
(0.2
|
)%
|
Managed care(2)
|
|
59.7
|
%
|
|
59.1
|
%
|
|
0.6
|
%
|
Charity and uninsured
|
|
5.7
|
%
|
|
5.4
|
%
|
|
0.3
|
%
|
Indemnity and other
|
|
2.5
|
%
|
|
2.4
|
%
|
|
0.1
|
%
|
|
|
|
(1)
|
The change is the difference between the 2019 and 2018 percentages shown.
|
|
(2)
|
Includes Medicare and Medicaid managed care programs.
|
|
|
Three Months Ended
March 31, |
||||||
Revenue Descriptions
|
|
2019
|
|
2018
|
||||
Medicare severity-adjusted diagnosis-related group — operating
|
|
$
|
404
|
|
|
$
|
424
|
|
Medicare severity-adjusted diagnosis-related group — capital
|
|
36
|
|
|
38
|
|
||
Outliers
|
|
23
|
|
|
27
|
|
||
Outpatient
|
|
190
|
|
|
194
|
|
||
Disproportionate share
|
|
59
|
|
|
58
|
|
||
Other(1)
|
|
46
|
|
|
41
|
|
||
Total Medicare net patient service revenues
|
|
$
|
758
|
|
|
$
|
782
|
|
|
|
|
(1)
|
The other revenue category includes Medicare Direct Graduate Medical Education and Indirect Medical Education (“IME”) revenues, IME revenues earned by our children’s hospitals (one of which we divested in 2018) under the Children’s Hospitals Graduate Medical Education Payment Program administered by the Health Resources and Services Administration of HHS, inpatient psychiatric units, inpatient rehabilitation units, other revenue adjustments, and adjustments to the estimates for current and prior-year cost reports and related valuation allowances.
|
|
|
Three Months Ended March 31,
|
||||||
Hospital Location
|
|
2019
|
|
2018
|
||||
Alabama
|
|
$
|
24
|
|
|
$
|
23
|
|
Arizona
|
|
34
|
|
|
43
|
|
||
California
|
|
226
|
|
|
219
|
|
||
Florida
|
|
52
|
|
|
61
|
|
||
Georgia
|
|
—
|
|
|
(1
|
)
|
||
Illinois
|
|
5
|
|
|
31
|
|
||
Massachusetts
|
|
22
|
|
|
24
|
|
||
Michigan
|
|
187
|
|
|
183
|
|
||
Pennsylvania
|
|
—
|
|
|
9
|
|
||
South Carolina
|
|
14
|
|
|
13
|
|
||
Tennessee
|
|
8
|
|
|
10
|
|
||
Texas
|
|
108
|
|
|
84
|
|
||
|
|
$
|
680
|
|
|
$
|
699
|
|
•
|
A market basket increase of 3.2% for Medicare severity-adjusted diagnosis-related group (“MS-DRG”) operating payments for hospitals reporting specified quality measure data and that are meaningful users of electronic health record (“EHR”) technology (hospitals that do not report specified quality measure data and/or are not meaningful users of EHR technology will receive a reduced market basket increase); CMS is also proposing certain adjustments to the 3.2% market basket increase that result in a net operating payment update of 3.2% (before budget neutrality adjustments), including:
|
•
|
A multifactor productivity reduction required by the ACA of 0.5%; and
|
•
|
A 0.5% increase required under the Medicare Access and CHIP Reauthorization Act of 2015;
|
•
|
Updates to the three factors used to determine the amount and distribution of Medicare uncompensated care disproportionate share (“UC-DSH”) payments; in addition to adjusting the UC-DSH amounts, CMS is proposing to base the distribution of the UC-DSH amounts on uncompensated care costs reported by hospitals in the 2015 cost reports, which reflects changes to the calculation of a hospital’s share of the UC-DSH amounts by: (1) removing low income days; and (2) using a single year of uncompensated care cost in lieu of the three-year averaging methodology used in recent years;
|
•
|
A 0.96% net increase in the capital federal MS-DRG rate;
|
•
|
An increase in the cost outlier threshold from $25,769 to $26,994; and
|
•
|
Changes in the calculation of the wage index to address disparities between hospitals in high and low wage index areas that include:
|
•
|
Increasing the wage index for hospitals with a wage index below the 25th percentile, and decreasing the wage index for hospitals with a wage index above the 75th percentile; and
|
•
|
A refinement to the calculation of the “rural floor” wage index.
|
•
|
An estimated net increase of 1.35% for the OPPS rates based on an estimated market basket increase of 2.9% reduced by market basket index and multifactor productivity reductions required by the ACA of 0.75% and 0.8%, respectively;
|
•
|
A transition over a two year period to the MPFS rates for the payment of clinic/office visits provided at off-campus, hospital-based departments that are currently paid under the OPPS (this payment reduction will not be made in a budget-neutral manner and will result in a reduction of approximately 0.6% to total CY 2019 OPPS payments);
|
•
|
A 2.1% increase to the ASC payment rates; and
|
•
|
A revision to the definition of “surgery” in the ASC payment system to account for certain “surgery-like” procedures, and the addition of 12 cardiac catheterization procedures and five related procedures to the ASC covered procedures list.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Estimated costs for:
|
|
|
|
|
|
|
||
Uninsured patients
|
|
$
|
158
|
|
|
$
|
146
|
|
Charity care patients
|
|
34
|
|
|
35
|
|
||
Total
|
|
$
|
192
|
|
|
$
|
181
|
|
Medicaid DSH and other supplemental revenues
|
|
$
|
199
|
|
|
$
|
220
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net operating revenues:
|
|
|
|
|
|
|
||
Hospital Operations and other
|
|
$
|
3,862
|
|
|
$
|
3,947
|
|
Ambulatory Care
|
|
480
|
|
|
498
|
|
||
Conifer
|
|
349
|
|
|
404
|
|
||
Inter-segment eliminations
|
|
(146
|
)
|
|
(150
|
)
|
||
Net operating revenues
|
|
4,545
|
|
|
4,699
|
|
||
Equity in earnings of unconsolidated affiliates
|
|
34
|
|
|
25
|
|
||
Operating expenses:
|
|
|
|
|
|
|
||
Salaries, wages and benefits
|
|
2,153
|
|
|
2,227
|
|
||
Supplies
|
|
741
|
|
|
774
|
|
||
Other operating expenses, net
|
|
1,074
|
|
|
1,060
|
|
||
Electronic health record incentives
|
|
(1
|
)
|
|
(1
|
)
|
||
Depreciation and amortization
|
|
208
|
|
|
204
|
|
||
Impairment and restructuring charges, and acquisition-related costs
|
|
19
|
|
|
47
|
|
||
Litigation and investigation costs
|
|
13
|
|
|
6
|
|
||
Net losses (gains) on sales, consolidation and deconsolidation of facilities
|
|
1
|
|
|
(110
|
)
|
||
Operating income
|
|
$
|
371
|
|
|
$
|
517
|
|
|
|
Three Months Ended
March 31, |
||||
|
|
2019
|
|
2018
|
||
Net operating revenues
|
|
100.0
|
%
|
|
100.0
|
%
|
Equity in earnings of unconsolidated affiliates
|
|
0.7
|
%
|
|
0.5
|
%
|
Operating expenses:
|
|
|
|
|
|
|
Salaries, wages and benefits
|
|
47.3
|
%
|
|
47.3
|
%
|
Supplies
|
|
16.3
|
%
|
|
16.5
|
%
|
Other operating expenses, net
|
|
23.6
|
%
|
|
22.6
|
%
|
Electronic health record incentives
|
|
—
|
%
|
|
—
|
%
|
Depreciation and amortization
|
|
4.6
|
%
|
|
4.3
|
%
|
Impairment and restructuring charges, and acquisition-related costs
|
|
0.4
|
%
|
|
1.0
|
%
|
Litigation and investigation costs
|
|
0.3
|
%
|
|
0.1
|
%
|
Net losses (gains) on sales, consolidation and deconsolidation of facilities
|
|
—
|
%
|
|
(2.3
|
)%
|
Operating income
|
|
8.2
|
%
|
|
11.0
|
%
|
|
|
Three Months Ended
March 31, |
|||||||||
Selected Operating Expenses
|
|
2019
|
|
2018
|
|
Increase
(Decrease)
|
|||||
Hospital Operations and other — Same-Hospital
|
|
|
|
|
|
|
|||||
Salaries, wages and benefits
|
|
$
|
1,799
|
|
|
$
|
1,747
|
|
|
3.0
|
%
|
Supplies
|
|
637
|
|
|
631
|
|
|
1.0
|
%
|
||
Other operating expenses
|
|
918
|
|
|
807
|
|
|
13.8
|
%
|
||
Total
|
|
$
|
3,354
|
|
|
$
|
3,185
|
|
|
5.3
|
%
|
Ambulatory Care
|
|
|
|
|
|
|
|
|
|
||
Salaries, wages and benefits
|
|
$
|
153
|
|
|
$
|
162
|
|
|
(5.6
|
)%
|
Supplies
|
|
99
|
|
|
106
|
|
|
(6.6
|
)%
|
||
Other operating expenses
|
|
82
|
|
|
92
|
|
|
(10.9
|
)%
|
||
Total
|
|
$
|
334
|
|
|
$
|
360
|
|
|
(7.2
|
)%
|
Conifer
|
|
|
|
|
|
|
|
|
|
||
Salaries, wages and benefits
|
|
$
|
185
|
|
|
$
|
225
|
|
|
(17.8
|
)%
|
Supplies
|
|
1
|
|
|
2
|
|
|
(50.0
|
)%
|
||
Other operating expenses
|
|
64
|
|
|
79
|
|
|
(19.0
|
)%
|
||
Total
|
|
$
|
250
|
|
|
$
|
306
|
|
|
(18.3
|
)%
|
Total
|
|
|
|
|
|
|
|||||
Salaries, wages and benefits
|
|
$
|
2,137
|
|
|
$
|
2,134
|
|
|
0.1
|
%
|
Supplies
|
|
737
|
|
|
739
|
|
|
(0.3
|
)%
|
||
Other operating expenses
|
|
1,064
|
|
|
978
|
|
|
8.8
|
%
|
||
Total
|
|
$
|
3,938
|
|
|
$
|
3,851
|
|
|
2.3
|
%
|
Rent/lease expense(1)
|
|
|
|
|
|
|
|
|
|
||
Hospital Operations and other
|
|
$
|
59
|
|
|
$
|
56
|
|
|
5.4
|
%
|
Ambulatory Care
|
|
20
|
|
|
20
|
|
|
—
|
%
|
||
Conifer
|
|
3
|
|
|
4
|
|
|
(25.0
|
)%
|
||
Total
|
|
$
|
82
|
|
|
$
|
80
|
|
|
2.5
|
%
|
|
|
|
(1)
|
Included in other operating expenses.
|
•
|
Hospital Operations and other, which is comprised of our acute care and specialty hospitals, ancillary outpatient facilities, urgent care centers, microhospitals and physician practices.
|
•
|
Ambulatory Care, which is comprised of USPI’s ambulatory surgery centers, urgent care centers, imaging centers and surgical hospitals (and also included nine facilities in the United Kingdom until we divested Aspen effective August 17, 2018).
|
•
|
Conifer, which provides healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities.
|
|
|
Same-Hospital
Continuing Operations
|
||||||||
|
|
Three Months Ended
March 31, |
||||||||
Admissions, Patient Days and Surgeries
|
|
2019
|
|
2018
|
|
Increase
(Decrease) |
||||
Number of hospitals (at end of period)
|
|
65
|
|
|
65
|
|
|
—
|
|
(1)
|
Total admissions
|
|
173,470
|
|
|
173,684
|
|
|
(0.1
|
)%
|
|
Adjusted patient admissions(2)
|
|
305,871
|
|
|
304,145
|
|
|
0.6
|
%
|
|
Paying admissions (excludes charity and uninsured)
|
|
163,632
|
|
|
164,239
|
|
|
(0.4
|
)%
|
|
Charity and uninsured admissions
|
|
9,838
|
|
|
9,445
|
|
|
4.2
|
%
|
|
Admissions through emergency department
|
|
125,228
|
|
|
119,957
|
|
|
4.4
|
%
|
|
Paying admissions as a percentage of total admissions
|
|
94.3
|
%
|
|
94.6
|
%
|
|
(0.3
|
)%
|
(1)
|
Charity and uninsured admissions as a percentage of total admissions
|
|
5.7
|
%
|
|
5.4
|
%
|
|
0.3
|
%
|
(1)
|
Emergency department admissions as a percentage of total admissions
|
|
72.2
|
%
|
|
69.1
|
%
|
|
3.1
|
%
|
(1)
|
Surgeries — inpatient
|
|
44,553
|
|
|
45,052
|
|
|
(1.1
|
)%
|
|
Surgeries — outpatient
|
|
57,896
|
|
|
59,720
|
|
|
(3.1
|
)%
|
|
Total surgeries
|
|
102,449
|
|
|
104,772
|
|
|
(2.2
|
)%
|
|
Patient days — total
|
|
815,329
|
|
|
817,000
|
|
|
(0.2
|
)%
|
|
Adjusted patient days(2)
|
|
1,408,053
|
|
|
1,405,568
|
|
|
0.2
|
%
|
|
Average length of stay (days)
|
|
4.70
|
|
|
4.70
|
|
|
—
|
%
|
|
Licensed beds (at end of period)
|
|
17,221
|
|
|
17,246
|
|
|
(0.1
|
)%
|
|
Average licensed beds
|
|
17,221
|
|
|
17,246
|
|
|
(0.1
|
)%
|
|
Utilization of licensed beds(3)
|
|
52.6
|
%
|
|
52.6
|
%
|
|
—
|
%
|
(1)
|
|
|
|
(1)
|
The change is the difference between 2019 and 2018 amounts shown.
|
|
(2)
|
Adjusted patient admissions/days represents actual patient admissions/days adjusted to include outpatient services provided by facilities in our Hospital Operations and other segment by multiplying actual patient admissions/days by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues.
|
|
(3)
|
Utilization of licensed beds represents patient days divided by number of days in the period divided by average licensed beds.
|
|
|
Same-Hospital
Continuing Operations |
||||||||
|
|
Three Months Ended
March 31, |
||||||||
Outpatient Visits
|
|
2019
|
|
2018
|
|
Increase
(Decrease) |
||||
Total visits
|
|
1,696,094
|
|
|
1,730,018
|
|
|
(2.0
|
)%
|
|
Paying visits (excludes charity and uninsured)
|
|
1,586,627
|
|
|
1,619,950
|
|
|
(2.1
|
)%
|
|
Charity and uninsured visits
|
|
109,467
|
|
|
110,068
|
|
|
(0.5
|
)%
|
|
Emergency department visits
|
|
651,852
|
|
|
663,722
|
|
|
(1.8
|
)%
|
|
Surgery visits
|
|
57,896
|
|
|
59,720
|
|
|
(3.1
|
)%
|
|
Paying visits as a percentage of total visits
|
|
93.5
|
%
|
|
93.6
|
%
|
|
(0.1
|
)%
|
(1)
|
Charity and uninsured visits as a percentage of total visits
|
|
6.5
|
%
|
|
6.4
|
%
|
|
0.1
|
%
|
(1)
|
|
|
|
(1)
|
The change is the difference between 2019 and 2018 amounts shown.
|
|
|
Same-Hospital
Continuing Operations |
|||||||||
|
|
Three Months Ended
March 31, |
|||||||||
Revenues
|
|
2019
|
|
2018
|
|
Increase
(Decrease) |
|||||
Total segment net operating revenues(1)
|
|
$
|
3,691
|
|
|
$
|
3,602
|
|
|
2.5
|
%
|
Selected revenue data – hospitals and related outpatient facilities
|
|
|
|
|
|
|
|||||
Net patient service revenues(1)(2)
|
|
$
|
3,559
|
|
|
$
|
3,494
|
|
|
1.9
|
%
|
Net patient service revenue per adjusted patient admission(1)(2)
|
|
$
|
11,636
|
|
|
$
|
11,488
|
|
|
1.3
|
%
|
Net patient service revenue per adjusted patient day(1)(2)
|
|
$
|
2,528
|
|
|
$
|
2,486
|
|
|
1.7
|
%
|
|
|
|
(1)
|
Revenues are net of implicit price concessions.
|
|
(2)
|
Adjusted patient admissions/days represents actual patient admissions/days adjusted to include outpatient services provided by facilities in our Hospital Operations and other segment by multiplying actual patient admissions/days by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues.
|
|
|
Same-Hospital
Continuing Operations |
||||||||
|
|
Three Months Ended
March 31, |
||||||||
Total Segment Selected Operating Expenses
|
|
2019
|
|
2018
|
|
Increase
(Decrease) |
||||
Salaries, wages and benefits as a percentage of net operating revenues
|
|
48.7
|
%
|
|
48.5
|
%
|
|
0.2
|
%
|
(1)
|
Supplies as a percentage of net operating revenues
|
|
17.3
|
%
|
|
17.5
|
%
|
|
(0.2
|
)%
|
(1)
|
Other operating expenses as a percentage of net operating revenues
|
|
24.9
|
%
|
|
22.4
|
%
|
|
2.5
|
%
|
(1)
|
|
|
|
(1)
|
The change is the difference between 2019 and 2018 amounts shown.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Medicare
|
|
$
|
252
|
|
|
$
|
229
|
|
Medicaid
|
|
76
|
|
|
74
|
|
||
Net cost report settlements receivable and valuation allowances
|
|
18
|
|
|
18
|
|
||
Managed care
|
|
1,584
|
|
|
1,467
|
|
||
Self-pay uninsured
|
|
47
|
|
|
47
|
|
||
Self-pay balance after insurance
|
|
103
|
|
|
94
|
|
||
Estimated future recoveries
|
|
151
|
|
|
148
|
|
||
Other payers
|
|
332
|
|
|
325
|
|
||
Total Hospital Operations and other
|
|
2,563
|
|
|
2,402
|
|
||
Ambulatory Care
|
|
183
|
|
|
191
|
|
||
Total discontinued operations
|
|
(2
|
)
|
|
2
|
|
||
|
|
$
|
2,744
|
|
|
$
|
2,595
|
|
|
|
March 31, 2019
|
|||||||||||||
|
|
Medicare
|
|
Medicaid
|
|
Managed
Care |
|
Indemnity,
Self-Pay and Other |
|
Total
|
|||||
0-60 days
|
|
89
|
%
|
|
60
|
%
|
|
59
|
%
|
|
30
|
%
|
|
57
|
%
|
61-120 days
|
|
5
|
%
|
|
17
|
%
|
|
16
|
%
|
|
19
|
%
|
|
15
|
%
|
121-180 days
|
|
3
|
%
|
|
10
|
%
|
|
8
|
%
|
|
11
|
%
|
|
8
|
%
|
Over 180 days
|
|
3
|
%
|
|
13
|
%
|
|
17
|
%
|
|
40
|
%
|
|
20
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
December 31, 2018
|
|||||||||||||
|
|
Medicare
|
|
Medicaid
|
|
Managed
Care |
|
Indemnity,
Self-Pay and Other |
|
Total
|
|||||
0-60 days
|
|
89
|
%
|
|
51
|
%
|
|
60
|
%
|
|
29
|
%
|
|
56
|
%
|
61-120 days
|
|
6
|
%
|
|
24
|
%
|
|
14
|
%
|
|
18
|
%
|
|
15
|
%
|
121-180 days
|
|
2
|
%
|
|
10
|
%
|
|
8
|
%
|
|
11
|
%
|
|
8
|
%
|
Over 180 days
|
|
3
|
%
|
|
15
|
%
|
|
18
|
%
|
|
42
|
%
|
|
21
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
0-60 days
|
|
$
|
73
|
|
|
$
|
72
|
|
61-120 days
|
|
6
|
|
|
16
|
|
||
121-180 days
|
|
1
|
|
|
3
|
|
||
Over 180 days
|
|
5
|
|
|
5
|
|
||
Total
|
|
$
|
85
|
|
|
$
|
96
|
|
•
|
increased malpractice expense of $42 million; and
|
•
|
increased medical fees of $32 million.
|
•
|
management services revenues, computed as a percentage of each facility’s net revenues (often net of implicit price concessions); and
|
•
|
our share of each facility’s net income (loss), which is computed by multiplying the facility’s net income (loss) times the percentage of each facility’s equity interests owned by USPI.
|
•
|
equity in earnings of unconsolidated affiliates—our share of the net income (loss) of each facility, which is based on the facility’s net income (loss) and the percentage of the facility’s outstanding equity interests owned by USPI; and
|
•
|
management and administrative services revenues, which is included in our net operating revenues—income we earn in exchange for managing the day-to-day operations of each facility, usually quantified as a percentage of each facility’s net revenues less implicit price concessions.
|
|
|
Three Months Ended
March 31, |
|||||||||
Ambulatory Care Results of Operations
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
Net operating revenues
|
|
$
|
480
|
|
|
$
|
498
|
|
|
(3.6
|
)%
|
Equity in earnings of unconsolidated affiliates
|
|
$
|
31
|
|
|
$
|
27
|
|
|
14.8
|
%
|
Salaries, wages and benefits
|
|
$
|
153
|
|
|
$
|
162
|
|
|
(5.6
|
)%
|
Supplies
|
|
$
|
99
|
|
|
$
|
106
|
|
|
(6.6
|
)%
|
Other operating expenses, net
|
|
$
|
82
|
|
|
$
|
92
|
|
|
(10.9
|
)%
|
Ambulatory Care Facility Growth
|
|
Three Months Ended
March 31, 2019 |
Net revenues
|
|
4.2%
|
Cases
|
|
0.9%
|
Net revenue per case
|
|
3.3%
|
Ambulatory Care Facilities
|
|
Three Months Ended
March 31, 2019 |
|
Facilities:
|
|
|
|
With a healthcare system partner
|
|
205
|
|
Without a healthcare system partner
|
|
129
|
|
Total facilities operated
|
|
334
|
|
Change from December 31, 2018
|
|
|
|
Acquisitions
|
|
—
|
|
De novo
|
|
—
|
|
Dispositions/Mergers
|
|
(3
|
)
|
Total decrease in number of facilities operated
|
|
(3
|
)
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Tax expense at statutory federal rate of 21%
|
|
$
|
16
|
|
|
$
|
55
|
|
State income taxes, net of federal income tax benefit
|
|
3
|
|
|
10
|
|
||
Tax attributable to noncontrolling interests
|
|
(17
|
)
|
|
(18
|
)
|
||
Nondeductible goodwill
|
|
—
|
|
|
5
|
|
||
Nontaxable gains
|
|
(1
|
)
|
|
—
|
|
||
Stock-based compensation
|
|
(1
|
)
|
|
4
|
|
||
Change in valuation allowance-interest expense limitation
|
|
24
|
|
|
12
|
|
||
Other items
|
|
(7
|
)
|
|
2
|
|
||
Income tax expense
|
|
$
|
17
|
|
|
$
|
70
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
|||||||
|
|
2019
|
|
2018
|
||||
Net income available (loss attributable) to Tenet Healthcare Corporation
common shareholders
|
|
$
|
(19
|
)
|
|
$
|
99
|
|
Less: Net income available to noncontrolling interests
|
|
(84
|
)
|
|
(92
|
)
|
||
Income from discontinued operations, net of tax
|
|
8
|
|
|
1
|
|
||
Income from continuing operations
|
|
57
|
|
|
190
|
|
||
Income tax expense
|
|
(17
|
)
|
|
(70
|
)
|
||
Loss from early extinguishment of debt
|
|
(47
|
)
|
|
(1
|
)
|
||
Other non-operating income (expense), net
|
|
1
|
|
|
(1
|
)
|
||
Interest expense
|
|
(251
|
)
|
|
(255
|
)
|
||
Operating income
|
|
371
|
|
|
517
|
|
||
Litigation and investigation costs
|
|
(13
|
)
|
|
(6
|
)
|
||
Net gains (losses) on sales, consolidation and deconsolidation of facilities
|
|
(1
|
)
|
|
110
|
|
||
Impairment and restructuring charges, and acquisition-related costs
|
|
(19
|
)
|
|
(47
|
)
|
||
Depreciation and amortization
|
|
(208
|
)
|
|
(204
|
)
|
||
Loss from divested and closed businesses (i.e., the Company’s health plan businesses)
|
|
(1
|
)
|
|
(1
|
)
|
||
Adjusted EBITDA
|
|
$
|
613
|
|
|
$
|
665
|
|
|
|
|
|
|
||||
Net operating revenues
|
|
$
|
4,545
|
|
|
$
|
4,699
|
|
Less: Net operating revenues from health plans
|
|
—
|
|
|
6
|
|
||
Adjusted net operating revenues
|
|
$
|
4,545
|
|
|
$
|
4,693
|
|
|
|
|
|
|
||||
Net income available (loss attributable) to Tenet Healthcare Corporation
common shareholders as a % of net operating revenues
|
|
(0.4
|
)%
|
|
2.1
|
%
|
||
|
|
|
|
|
||||
Adjusted EBITDA as % of adjusted net operating revenues
(Adjusted EBITDA margin)
|
|
13.5
|
%
|
|
14.2
|
%
|
•
|
Decreased net cash of $25 million related to the California provider fee program due to the timing of payments from the state; and
|
•
|
The timing of other working capital items.
|
|
|
Maturity Date, Years Ending December 31,
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
|
|
(Dollars in Millions)
|
||||||||||||||||||||||||||||||
Fixed rate long-term debt
|
|
$
|
158
|
|
|
$
|
2,428
|
|
|
$
|
1,973
|
|
|
$
|
2,824
|
|
|
$
|
1,897
|
|
|
$
|
5,685
|
|
|
$
|
14,965
|
|
|
$
|
15,411
|
|
Average effective interest rates
|
|
5.8
|
%
|
|
6.1
|
%
|
|
4.7
|
%
|
|
8.6
|
%
|
|
7.3
|
%
|
|
5.8
|
%
|
|
6.4
|
%
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Variable rate long-term debt
|
|
$
|
—
|
|
|
$
|
190
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
190
|
|
|
$
|
190
|
|
Average effective interest rates
|
|
—
|
|
|
3.7
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.7
|
%
|
|
|
|
|
|
|
(10)
|
|
Material Contracts
|
|
|
|
(a)
|
|
|
|
|
|
|
|
(b)
|
|
|
|
|
|
(31)
|
|
Rule 13a-14(a)/15d-14(a) Certifications
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
|
|
|
(b)
|
|
|
|
|
|
(32)
|
|
||
|
|
|
|
(101 SCH)
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
(101 CAL)
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
(101 DEF)
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
(101 LAB)
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
(101 PRE)
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
(101 INS)
|
|
XBRL Taxonomy Extension Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
||
* Management contract or compensatory plan or arrangement.
|
|
|
TENET HEALTHCARE CORPORATION
(Registrant)
|
|
|
|
Date: April 29, 2019
|
By:
|
/s/ R. SCOTT RAMSEY
|
|
|
R. Scott Ramsey
|
|
|
Vice President and Controller
|
|
|
(Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Tenet Healthcare Corporation (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
|
|
Date: April 29, 2019
|
/s/ RONALD A. RITTENMEYER
|
|
Ronald A. Rittenmeyer
|
|
Executive Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Tenet Healthcare Corporation (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: April 29, 2019
|
/s/ DANIEL J. CANCELMI
|
|
Daniel J. Cancelmi
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Date: April 29, 2019
|
/s/ RONALD A. RITTENMEYER
|
|
Ronald A. Rittenmeyer
|
|
Executive Chairman and Chief Executive Officer
|
|
|
|
|
Date: April 29, 2019
|
/s/ DANIEL J. CANCELMI
|
|
Daniel J. Cancelmi
|
|
Executive Vice President and Chief Financial Officer
|