Exhibit 99.1

 

Tenet Reports Results for the Third Quarter Ended September 30, 2015 and Announces $500 Million Share Repurchase Authorization

 

•

Generated Adjusted EBITDA of $566 million, an increase of 23.3%, and Adjusted diluted EPS of $0.29, both within our Outlook range for the third quarter

 

•

Maintained the midpoint of 2015 Adjusted EBITDA Outlook, narrowed the range of Adjusted EBITDA to $2.25 to $2.30 billion and raised Adjusted free cash flow Outlook to $350 to $500 million

 

•

Hospital segment patient revenue increased 6.5% on a same-hospital basis, with admissions declining 0.6%, outpatient visits increasing 3.0%, adjusted admissions increasing 0.7%, and revenue per adjusted admission increasing 5.8%

 

•

Ambulatory segment revenue increased 10.1% on a pro forma same-facility system-wide basis, with cases increasing 6.3% and revenue per case increasing 3.5%

 

•

Conifer’s EBITDA increased 30% to $61 million

 

•

$500 million share repurchase program to be funded with proceeds from previously announced divestitures

DALLAS – November 2, 2015 – Tenet Healthcare Corporation (NYSE:THC) reported Adjusted EBITDA of $566 million for the third quarter of 2015, an increase of $107 million, or 23.3 percent, compared to $459 million in the third quarter of 2014.

“We delivered revenue and EBITDA consistent with our Outlook for the quarter and generated strong adjusted free cash flow,” said Trevor Fetter, chairman and chief executive officer. “While we experienced pressure on lower acuity inpatient hospital admissions, we continued to drive increases in higher-acuity admissions. Our Conifer Health Solutions and United Surgical Partners subsidiaries performed well and achieved results in line with our expectations.”

Mr. Fetter continued, “In light of the recent market volatility combined with the cash proceeds that we are anticipating from divestitures, our Board has approved a new $500 million share repurchase authorization. We regularly review our priorities for capital and believe that a share repurchase authorization is an appropriate tool to have available to us at this time. We are confident that our strategies to drive growth in all three of our business segments will result in long-term value creation for our shareholders.”

Discussion of Results (Percentage changes in operating metrics compare Q3’15 to Q3’14 on a same-facility basis unless otherwise noted.)

Tenet experienced a 0.6% decline in same-hospital admissions in the quarter and drove a 0.7% increase in adjusted admissions. Paying admissions declined 0.9%. Surgeries performed in our hospital segment increased 0.8 percent, driven by higher acuity cases, and emergency

 

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department visits increased 1.5 percent. On a pro forma same-facility system-wide basis, including the results of USPI and Aspen in both the third quarters of 2015 and 2014, surgical and imaging cases in our Ambulatory Care segment grew by 6.3 percent.

Uninsured plus charity admissions increased by 381 admissions, or 3.7 percent on a same hospital basis, primarily due to increases in Florida and Texas. Medicaid admissions decreased by 644 admissions, or 1.2 percent. Same-hospital charity and uninsured outpatient visits increased by 4,310 visits, or 2.7 percent, and Medicaid outpatient visits increased by 10,526 visits, or 1.9 percent.

In Tenet’s six Medicaid expansion states, the company continues to benefit from declines in uninsured and charity admissions and outpatient visits. In these six states, same-hospital uninsured plus charity admissions declined by 167 admissions, or 9.2 percent, and Medicaid admissions increased by 195 admissions, or 0.6 percent. Uninsured plus charity outpatient visits decreased by 354 visits, or 0.7 percent, and Medicaid outpatient visits grew by 2,890 visits, or 0.8 percent. 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 5,134 in the third quarter of 2015, up 53.4% from the third quarter of 2014. Same-hospital exchange outpatient visits were 44,684 in the third quarter of 2015, up 52.5% from the third quarter of 2014.

Net operating revenues, after the provision for doubtful accounts, grew by $517 million, or 12.4 percent, to $4.692 billion compared to net operating revenues of $4.175 billion in the third quarter of 2014. Revenue growth was driven by a 0.7 percent increase in same-hospital adjusted patient admissions, a 5.8 percent increase in same-hospital net patient revenue per adjusted patient admission, a $36 million increase in revenue at Conifer from non-Tenet customers as well as growth from acquisitions, joint ventures and newly constructed facilities.

Total hospital selected operating expenses, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 3.0 percent per adjusted admission in the quarter.

Tenet recorded $7 million in electronic health records incentives in the third quarter of 2015, a $2 million increase compared to $5 million in the third quarter of 2014. Electronic health record incentive payments are recorded based on the timing of when the company’s hospitals achieve meaningful use criteria.

The company’s bad debt expense ratio was 7.3 percent of revenues before bad debt in the third quarter of 2015 and 5.6 percent in the third quarter of 2014. Including $932 million and $854 million of charity care write-offs and uninsured discounts that were offered through Tenet’s Compact with Uninsured Patients in the third quarters of 2015 and 2014, respectively, Tenet’s uncompensated care was $1.303 billion and $1.103 billion, respectively, in these periods. As a percentage of adjusted revenue, uncompensated care represented 21.7 percent of adjusted revenue in the third quarter of 2015, up from 20.9 percent in the third quarter of 2014.

 

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Conifer generated $61 million of Adjusted EBITDA in the quarter ended September 30, 2015, representing a 29.8 percent increase compared to $47 million in the third quarter of 2014. Including revenue from Tenet, Conifer’s revenue increased by $51 million, or 17.2 percent, to $347 million in the third quarter of 2015 compared to $296 million in the third quarter of 2014.

Tenet generated adjusted net income from continuing operations of $30 million, or $0.29 per diluted share, in the third quarter of 2015. This excludes $58 million, or $0.57 per share, in after-tax items such as impairment charges, restructuring charges, acquisition-related costs, litigation and investigation costs, and the loss from the early extinguishment of debt. The company generated adjusted net income from continuing operations of $36 million, or $0.36 per diluted share, in the third quarter of 2014, excluding the comparable items that totaled $26 million after-tax, or $0.26 per share.

Including the results of both continuing and discontinued operations, Tenet reported a net loss attributable to common shareholders of $29 million after-tax, or $0.29 per share in the third quarter of 2015, compared to net income of $9 million after-tax, or $0.09 per share, in the third quarter of 2014.

Cash and cash equivalents were $450 million at September 30, 2015 compared to $193 million at December 31, 2014. Tenet’s outstanding borrowings on its credit line were $110 million as of September 30, 2015. Accounts receivable days outstanding were 49.5 at September 30, 2015, compared to 50.7 at June 30, 2015 and 49.5 days at December 31, 2014. Adjusted net cash provided by operating activities in the quarter ended September 30, 2015 was $563 million; after subtracting $207 million of capital expenditures, Adjusted free cash flow was $356 million. Year to date, Adjusted free cash flow is $444 million.

Share Repurchase Authorization

Tenet’s Board of Directors has authorized a share repurchase program for up to $500 million of the Company’s outstanding common stock. Repurchases will be made in accordance with applicable securities laws and may be made at management’s discretion from time to time in the open market, through privately negotiated transactions, or otherwise. The repurchase program will expire on December 31, 2016, and may be suspended for periods or discontinued at any time. The timing and amount of repurchase transactions will be based on an evaluation of market conditions, share purchase prices, the timing of divestiture proceeds and other factors. The Company does not anticipate the need to raise additional debt to fund the share repurchase program.

 

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Revised Outlook for 2015

For the full year 2015, Tenet expects to generate net operating revenues of $18.35 billion to $18.55 billion, Adjusted EBITDA of $2.25 billion to $2.30 billion, Adjusted free cash flow of $350 million to $500 million, and Adjusted earnings per share of $1.76 to $2.11. The Outlook includes approximately $90 million of equity in earnings of unconsolidated affiliates and $65 million of electronic health record incentives.

The Outlook amounts include the estimated impact of previously announced acquisitions, divestitures and joint ventures using either the actual completion date of transactions that have already occurred or estimated completion dates.

Management’s Webcast Discussion of Third Quarter Results

Tenet management will discuss the Company’s third quarter 2015 results on a webcast scheduled for 10:00 a.m. ET (9:00 a.m. CT) on November 3, 2015. 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-Q report for the three months ended September 30, 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 (USPI), the company operates 87 general acute care hospitals, 20 short-stay surgical hospitals and over 440 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 (IDN), physician groups, self-insured organizations and health plans. Tenet also operates six 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.

###

 

Corporate Communications Charles Nicolas 469-893-2640 mediarelations@tenethealth.com		Investor Relations Brendan Strong 469-893-6992 investorrelations@tenethealth.com

 

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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, 2014 and other filings with the Securities and Exchange Commission. The information contained in this release is as of the date hereof. The company assumes no obligation to update forward-looking statements contained in this release as a result of new information or future events or developments.

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.

 

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TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

(Dollars in millions except per share amounts)		Three Months Ended September 30,
		2015				%				2014				%				Change
Net operating revenues:
Net operating revenues before provision for doubtful accounts		$	5,063							$	4,424								14.4	%
Less: Provision for doubtful accounts			371								249								49.0	%
Net operating revenues			4,692				100.0	%			4,175				100.0	%			12.4	%
Equity in earnings of unconsolidated affiliates			28				0.6	%			4				0.1	%			600.0	%
Operating expenses:
Salaries, wages and benefits			2,258				48.2	%			2,028				48.5	%			11.3	%
Supplies			752				16.0	%			665				15.9	%			13.1	%
Other operating expenses, net			1,151				24.5	%			1,032				24.7	%			11.5	%
Electronic health record incentives			(7	)			(0.1	)%			(5	)			(0.1	)%			40.0	%
Depreciation and amortization			185				3.9	%			207				5.0	%
Impairment and restructuring charges, and acquisition-related costs			44				0.9	%			37				0.9	%
Litigation and investigation costs			50				1.1	%			4				0.1	%
Operating income			287				6.1	%			211				5.1	%
Interest expense			(248	)							(186	)
Loss from early extinguishment of debt			—								(24	)
Investment earnings			1								—
Net income from continuing operations, before income taxes			40								1
Income tax benefit (expense)			(11	)							18
Net income from continuing operations, before discontinued operations			29								19
Discontinued operations:
Loss from operations			(1	)							(2	)
Income tax benefit			—								1
Net loss from discontinued operations			(1	)							(1	)
Net income			28								18
Less: Net income attributable to noncontrolling interests			57								9
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(29	)						$	9
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Net income (loss) from continuing operations, net of tax		$	(28	)						$	10
Net loss from discontinued operations, net of tax			(1	)							(1	)
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(29	)						$	9
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations		$	(0.28	)						$	0.10
Discontinued operations			(0.01	)							(0.01	)
		$	(0.29	)						$	0.09
Diluted
Continuing operations		$	(0.28	)						$	0.10
Discontinued operations			(0.01	)							(0.01	)
		$	(0.29	)						$	0.09
Weighted average shares and dilutive securities outstanding (in thousands):
Basic			99,537								98,036
Diluted*			99,537								100,926

 

*	Had we generated income from continuing operations in the three months ended September 30, 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 2,500 shares.

 

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TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

(Dollars in millions except per share amounts)		Nine Months Ended September 30,
		2015				%				2014				%				Change
Net operating revenues:
Net operating revenues before provision for doubtful accounts		$	14,694							$	13,087								12.3	%
Less: Provision for doubtful accounts			1,086								949								14.4	%
Net operating revenues			13,608				100.0	%			12,138				100.0	%			12.1	%
Equity in earnings of unconsolidated affiliates			48				0.4	%			9				0.1	%			433.3	%
Operating expenses:
Salaries, wages and benefits			6,568				48.3	%			5,905				48.6	%			11.2	%
Supplies			2,146				15.8	%			1,942				16.0	%			10.5	%
Other operating expenses, net			3,325				24.4	%			3,066				25.4	%			8.4	%
Electronic health record incentives			(46	)			(0.3	)%			(72	)			(0.6	)%			(36.1	)%
Depreciation and amortization			589				4.3	%			609				5.0	%
Impairment and restructuring charges, and acquisition-related costs			266				2.0	%			90				0.7	%
Litigation and investigation costs			67				0.5	%			19				0.2	%
Operating income			741				5.4	%			588				4.8	%
Interest expense			(664	)							(558	)
Loss from early extinguishment of debt			—								(24	)
Net income from continuing operations, before income taxes			77								6
Income tax benefit			—								11
Net income from continuing operations, before discontinued operations			77								17
Discontinued operations:
Loss from operations			(4	)							(17	)
Litigation and investigation costs			3								(18	)
Income tax benefit			—								13
Net loss from discontinued operations			(1	)							(22	)
Net income (loss)			76								(5	)
Less: Net income attributable to noncontrolling interests			119								44
Net loss attributable to Tenet Healthcare Corporation common shareholders		$	(43	)						$	(49	)
Amounts attributable to Tenet Healthcare Corporation common shareholders
Net loss from continuing operations, net of tax		$	(42	)						$	(27	)
Net loss from discontinued operations, net of tax			(1	)							(22	)
Net loss attributable to Tenet Healthcare Corporation common shareholders		$	(43	)						$	(49	)
Net loss per share attributable to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations		$	(0.42	)						$	(0.27	)
Discontinued operations			(0.01	)							(0.23	)
		$	(0.43	)						$	(0.50	)
Diluted
Continuing operations		$	(0.42	)						$	(0.27	)
Discontinued operations			(0.01	)							(0.23	)
		$	(0.43	)						$	(0.50	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic			99,160								97,625
Diluted*			99,160								97,625

 

*

Had we generated income from continuing operations in the nine months ended September 30, 2015 and 2014, the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 2,449 and 2,332 shares, respectively.

 

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TENET HEALTHCARE CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

		September 30,				December 31,
(Dollars in millions)		2015				2014
ASSETS
Current assets:
Cash and cash equivalents		$	450			$	193
Accounts receivable, less allowance for doubtful accounts			2,525				2,404
Inventories of supplies, at cost			275				276
Income tax receivable			33				2
Current portion of deferred income taxes			625				747
Assets held for sale			1,186				2
Other current assets			1,202				1,093
Total current assets			6,296				4,717
Investments and other assets			1,029				384
Deferred income taxes, net of current portion			82				116
Property and equipment, at cost, less accumulated depreciation and amortization			7,330				7,733
Goodwill			6,606				3,913
Other intangible assets, at cost, less accumulated amortization			1,830				1,278
Total assets		$	23,173			$	18,141
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt		$	112			$	112
Accounts payable			1,206				1,179
Accrued compensation and benefits			821				852
Professional and general liability reserves			185				189
Accrued interest payable			307				194
Liabilities held for sale			226				—
Other current liabilities			1,236				1,051
Total current liabilities			4,093				3,577
Long-term debt, net of current portion			14,642				11,695
Professional and general liability reserves			566				492
Defined benefit plan obligations			621				633
Other long-term liabilities			551				558
Total liabilities			20,473				16,955
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries			1,682				401
Equity:
Shareholders’ equity:
Common stock			7				7
Additional paid-in capital			4,798				4,614
Accumulated other comprehensive loss			(173	)			(182	)
Accumulated deficit			(1,453	)			(1,410	)
Common stock in treasury, at cost			(2,377	)			(2,378	)
Total shareholders’ equity			802				651
Noncontrolling interests			216				134
Total equity			1,018				785
Total liabilities and equity		$	23,173			$	18,141

 

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TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

 

		Nine Months Ended
(Dollars in millions)		September 30,
		2015				2014
Net income (loss)		$	76			$	(5	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			589				609
Provision for doubtful accounts			1,086				949
Deferred income tax benefit			(10	)			(22	)
Stock-based compensation expense			50				41
Impairment and restructuring charges, and acquisition-related costs			266				90
Litigation and investigation costs			67				19
Loss from early extinguishment of debt			—				24
Amortization of debt discount and debt issuance costs			32				21
Pre-tax loss from discontinued operations			1				35
Other items, net			(26	)			(16	)
Changes in cash from operating assets and liabilities:
Accounts receivable			(1,124	)			(1,309	)
Inventories and other current assets			(62	)			12
Income taxes			(5	)			(7	)
Accounts payable, accrued expenses and other current liabilities			39				120
Other long-term liabilities			31				38
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements			(157	)			(115	)
Net cash used in operating activities from discontinued operations, excluding income taxes			(18	)			(16	)
Net cash provided by operating activities			835				468
Cash flows from investing activities:
Purchases of property and equipment — continuing operations			(566	)			(734	)
Purchases of businesses or joint venture interests, net of cash acquired			(720	)			(185	)
Proceeds from sales of facilities and other assets			28				4
Proceeds from sales of marketable securities, long-term investments and other assets			18				8
Purchases of equity investments			(18	)			(6	)
Other long-term assets			(6	)			(4	)
Other items, net			(8	)			3
Net cash used in investing activities			(1,272	)			(914	)
Cash flows from financing activities:
Repayments of borrowings under credit facility			(1,880	)			(1,965	)
Proceeds from borrowings under credit facility			1,770				1,560
Repayments of other borrowings			(2,011	)			(655	)
Proceeds from other borrowings			3,208				1,608
Debt issuance costs			(76	)			(26	)
Distributions paid to noncontrolling interests			(65	)			(30	)
Contributions from noncontrolling interests			3				15
Purchase of noncontrolling interests			(254	)			—
Proceeds from exercise of stock options			15				23
Other items, net			(16	)			3
Net cash provided by financing activities			694				533
Net increase in cash and cash equivalents			257				87
Cash and cash equivalents at beginning of period			193				113
Cash and cash equivalents at end of period		$	450			$	200
Supplemental disclosures:
Interest paid, net of capitalized interest		$	(519	)		$	(487	)
Income tax refunds (payments), net		$	(6	)		$	(5	)

 

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TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS⁽¹⁾

(Unaudited)

 

(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)		Three Months Ended September 30,												Nine Months Ended September 30,
		2015				2014(2)				Change				2015(2)				2014(2)				Change
Net inpatient revenues		$	2,603			$	2,463				5.7	%		$	7,916			$	7,297				8.5	%
Net outpatient revenues		$	1,515			$	1,358				11.6	%		$	4,411			$	4,001				10.2	%
Number of acute care hospitals (at end of period)			83				80				3	*			83				80				3	*
Licensed beds (at end of period)			21,527				20,762				3.7	%			21,527				20,762				3.7	%
Average licensed beds			21,122				20,692				2.1	%			20,608				20,439				0.8	%
Utilization of licensed beds			47.8	%			48.4	%			(0.6	)%*			50.4	%			49.4	%			1.0	%*
Patient days - total			927,964				921,228				0.7	%			2,833,716				2,757,485				2.8	%
Adjusted patient days			1,601,405				1,560,784				2.6	%			4,809,374				4,624,395				4.0	%
Net inpatient revenue per patient day		$	2,805			$	2,674				4.9	%		$	2,794			$	2,646				5.6	%
Total admissions			201,870				199,914				1.0	%			612,111				588,828				4.0	%
Adjusted patient admissions			352,328				342,782				2.8	%			1,050,519				998,623				5.2	%
Charity and uninsured admissions			11,322				10,990				3.0	%			32,807				34,447				(4.8	)%
Net inpatient revenue per admission		$	12,894			$	12,320				4.7	%		$	12,932			$	12,392				4.4	%
Average length of stay (days)			4.60				4.61				(0.2	)%			4.63				4.68				(1.1	)%
Total surgeries			129,937				126,427				2.8	%			378,863				367,930				3.0	%
Admissions through emergency department			126,050				123,147				2.4	%			388,164				367,834				5.5	%
Emergency department visits			747,993				719,835				3.9	%			2,232,477				2,086,846				7.0	%
Total emergency department admissions and visits			874,043				842,982				3.7	%			2,620,641				2,454,680				6.8	%
Outpatient visits			2,076,524				1,978,420				5.0	%			6,134,134				5,725,649				7.1	%
Charity and uninsured outpatient visits			172,057				166,709				3.2	%			488,888				495,559				(1.3	)%
Net outpatient revenue per visit		$	730			$	686				6.4	%		$	719			$	699				2.9	%
Net patient revenue per adjusted patient admission		$	11,688			$	11,147				4.9	%		$	11,734			$	11,314				3.7	%
Net patient revenue per adjusted patient day		$	2,571			$	2,448				5.0	%		$	2,563			$	2,443				4.9	%
Net Patient Revenues from:
Medicare			19.8	%			21.6	%			(1.8	)%*			20.8	%			22.3	%			(1.5	)%*
Medicaid			8.8	%			8.9	%			(0.1	)%*			8.9	%			8.9	%			—	%*
Managed care			61.1	%			60.4	%			0.7	%*			60.2	%			58.8	%			1.4	%*
Indemnity, self-pay and other			10.3	%			9.1	%			1.2	%*			10.1	%			10.0	%			0.1	%*

 

(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

 

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TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS⁽¹⁾

(Unaudited)

 

(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)		Three Months Ended September 30,												Nine Months Ended September 30,
		2015				2014(2)				Change				2015(2)				2014(2)				Change
Net inpatient revenues		$	2,472			$	2,337				5.8	%		$	7,533			$	7,031				7.1	%
Net outpatient revenues		$	1,427			$	1,323				7.9	%		$	4,183			$	3,902				7.2	%
Number of acute care hospitals (at end of period)			76				76				—	*			76				76				—	*
Licensed beds (at end of period)			20,020				19,999				0.1	%			20,020				19,999				0.1	%
Average licensed beds			20,052				19,999				0.3	%			20,059				19,949				0.6	%
Utilization of licensed beds			47.4	%			48.1	%			(0.7	)%*			49.3	%			49.1	%			0.2	%*
Patient days - total			874,456				884,748				(1.2	)%			2,697,929				2,673,921				0.9	%
Adjusted patient days			1,503,639				1,501,624				0.1	%			4,574,587				4,493,843				1.8	%
Net inpatient revenue per patient day		$	2,827			$	2,641				7.0	%		$	2,792			$	2,629				6.2	%
Total admissions			191,054				192,283				(0.6	)%			583,838				572,702				1.9	%
Adjusted patient admissions			332,498				330,219				0.7	%			1,001,115				973,107				2.9	%
Charity and uninsured admissions			10,701				10,320				3.7	%			30,939				32,924				(6.0	)%
Net inpatient revenue per admission		$	12,939			$	12,154				6.5	%		$	12,903			$	12,277				5.1	%
Average length of stay (days)			4.58				4.60				(0.4	)%			4.62				4.67				(1.1	)%
Total surgeries			123,765				122,821				0.8	%			364,192				360,024				1.2	%
Admissions through emergency department			119,264				118,287				0.8	%			369,587				357,728				3.3	%
Emergency department visits			702,248				690,765				1.7	%			2,116,106				2,038,721				3.8	%
Total emergency department admissions and visits			821,512				809,052				1.5	%			2,485,693				2,396,449				3.7	%
Outpatient visits			1,963,166				1,905,255				3.0	%			5,856,842				5,585,216				4.9	%
Charity and uninsured outpatient visits			162,441				158,131				2.7	%			465,210				478,639				(2.8	)%
Net outpatient revenue per visit		$	727			$	694				4.8	%		$	714			$	699				2.1	%
Net patient revenue per adjusted patient admission		$	11,726			$	11,084				5.8	%		$	11,703			$	11,235				4.2	%
Net patient revenue per adjusted patient day		$	2,593			$	2,437				6.4	%		$	2,561			$	2,433				5.3	%
Net Patient Revenues from:
Medicare			20.4	%			22.4	%			(2.0	)%*			20.0	%			22.0	%			(2.0	)%*
Medicaid			8.2	%			9.9	%			(1.7	)%*			8.6	%			8.8	%			(0.2	)%*
Managed care			61.6	%			58.5	%			3.1	%*			61.5	%			59.3	%			2.2	%*
Indemnity, self-pay and other			9.8	%			9.2	%			0.6	%*			9.9	%			9.9	%			—	%*

 

(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

 

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TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

(Dollars in millions except per share amounts)		Three Months Ended												Nine Months Ended
		03/31/15				6/30/2015				9/30/2015				9/30/2015
Net operating revenues:
Net operating revenues before provision for doubtful accounts		$	4,787			$	4,844			$	5,063			$	14,694
Less: Provision for doubtful accounts			363				352				371				1,086
Net operating revenues			4,424				4,492				4,692				13,608
Equity in earnings of unconsolidated affiliates			4				16				28				48
Operating expenses:
Salaries, wages and benefits			2,125				2,185				2,258				6,568
Supplies			687				707				752				2,146
Other operating expenses, net			1,093				1,081				1,151				3,325
Electronic health record incentives			(6	)			(33	)			(7	)			(46	)
Depreciation and amortization			207				197				185				589
Impairment and restructuring charges, and acquisition-related costs			29				193				44				266
Litigation and investigation costs			3				14				50				67
Operating income			290				164				287				741
Interest expense			(199	)			(217	)			(248	)			(664	)
Investment earnings (losses)			—				(1	)			1				—
Net income (loss) from continuing operations, before income taxes			91				(54	)			40				77
Income tax benefit (expense)			(16	)			27				(11	)			—
Net income (loss) from continuing operations, before discontinued operations			75				(27	)			29				77
Discontinued operations:
Loss from operations			(1	)			(2	)			(1	)			(4	)
Litigation and investigation costs			3				—				—				3
Income tax benefit (expense)			(1	)			1				—				—
Net income (loss) from discontinued operations			1				(1	)			(1	)			(1	)
Net income (loss)			76				(28	)			28				76
Less: Net income attributable to noncontrolling interests			29				33				57				119
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	47			$	(61	)		$	(29	)		$	(43	)
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Net income (loss) from continuing operations, net of tax		$	46			$	(60	)		$	(28	)		$	(42	)
Net income (loss) from discontinued operations, net of tax			1				(1	)			(1	)			(1	)
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	47			$	(61	)		$	(29	)		$	(43	)
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations		$	0.47			$	(0.60	)		$	(0.28	)		$	(0.42	)
Discontinued operations			0.01				(0.01	)			(0.01	)			(0.01	)
		$	0.48			$	(0.61	)		$	(0.29	)		$	(0.43	)
Diluted
Continuing operations		$	0.46			$	(0.60	)		$	(0.28	)		$	(0.42	)
Discontinued operations			0.01				(0.01	)			(0.01	)			(0.01	)
		$	0.47			$	(0.61	)		$	(0.29	)		$	(0.43	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic			98,699				99,244				99,537				99,160
Diluted			100,872				99,244				99,537				99,160

 

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TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS⁽¹⁾

(Unaudited)

 

(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)		Three Months Ended												Nine Months Ended
		03/31/15(2)				06/30/15				9/30/2015				9/30/2015
Net inpatient revenues		$	2,691			$	2,622			$	2,603			$	7,916
Net outpatient revenues		$	1,412			$	1,484			$	1,515			$	4,411
Number of acute care hospitals (at end of period)			80				80				83				83
Licensed beds (at end of period)			20,826				20,826				21,527				21,527
Average licensed beds			20,823				20,826				21,122				20,608
Utilization of licensed beds			52.1	%			49.1	%			47.8	%			50.4	%
Patient days - total			975,912				929,840				927,964				2,833,716
Adjusted patient days			1,618,402				1,589,567				1,601,405				4,809,374
Net inpatient revenue per patient day		$	2,756			$	2,821			$	2,805			$	2,794
Total admissions			208,333				201,908				201,870				612,111
Adjusted patient admissions			349,069				349,122				352,328				1,050,519
Charity and uninsured admissions			10,950				10,535				11,322				32,807
Net inpatient revenue per admission		$	12,912			$	12,991			$	12,894			$	12,932
Average length of stay (days)			4.68				4.61				4.60				4.63
Total surgeries			121,403				127,523				129,937				378,863
Admissions through emergency department			133,544				128,570				126,050				388,164
Emergency department visits			741,533				742,951				747,993				2,232,477
Total emergency department admissions and visits			875,077				871,521				874,043				2,620,641
Outpatient visits			1,994,573				2,063,037				2,076,524				6,134,134
Charity and uninsured outpatient visits			157,197				159,634				172,057				488,888
Net outpatient revenue per visit		$	708			$	719			$	730			$	719
Net patient revenue per adjusted patient admission		$	11,751			$	11,764			$	11,688			$	11,734
Net patient revenue per adjusted patient day		$	2,535			$	2,584			$	2,571			$	2,563
Net Patient Revenues from:
Medicare			21.9	%			20.7	%			19.8	%			20.8	%
Medicaid			9.4	%			8.5	%			8.8	%			8.9	%
Managed care			58.6	%			60.8	%			61.1	%			60.2	%
Indemnity, self-pay and other			10.2	%			10.0	%			10.3	%			10.1	%

 

(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.

 

Page 13

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TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS⁽¹⁾

(Unaudited)

 

(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)		Three Months Ended												Nine Months Ended
		03/31/15(2)				06/30/15				9/30/2015				9/30/2015
Net inpatient revenues		$	2,568			$	2,493			$	2,472			$	7,533
Net outpatient revenues		$	1,350			$	1,406			$	1,427			$	4,183
Number of acute care hospitals (at end of period)			76				76				76				76
Licensed beds (at end of period)			20,063				20,063				20,020				20,020
Average licensed beds			20,060				20,063				20,052				20,059
Utilization of licensed beds			51.8	%			48.7	%			47.4	%			49.3	%
Patient days - total			934,521				888,952				874,456				2,697,929
Adjusted patient days			1,550,103				1,520,845				1,503,639				4,574,587
Net inpatient revenue per patient day		$	2,748			$	2,804			$	2,827			$	2,792
Total admissions			199,460				193,324				191,054				583,838
Adjusted patient admissions			334,189				334,428				332,498				1,001,115
Charity and uninsured admissions			10,291				9,947				10,701				30,939
Net inpatient revenue per admission		$	12,875			$	12,895			$	12,939			$	12,903
Average length of stay (days)			4.69				4.60				4.58				4.62
Total surgeries			117,412				123,015				123,765				364,192
Admissions through emergency department			127,497				122,826				119,264				369,587
Emergency department visits			706,433				707,425				702,248				2,116,106
Total emergency department admissions and visits			833,930				830,251				821,512				2,485,693
Outpatient visits			1,912,749				1,980,927				1,963,166				5,856,842
Charity and uninsured outpatient visits			150,320				152,449				162,441				465,210
Net outpatient revenue per visit		$	706			$	710			$	727			$	714
Net patient revenue per adjusted patient admission		$	11,724			$	11,659			$	11,726			$	11,703
Net patient revenue per adjusted patient day		$	2,528			$	2,564			$	2,593			$	2,561
Net Patient Revenues from:
Medicare			21.6	%			20.4	%			20.0	%			20.0	%
Medicaid			9.2	%			8.2	%			8.6	%			8.6	%
Managed care			59.2	%			61.6	%			61.5	%			61.5	%
Indemnity, self-pay and other			10.0	%			9.8	%			9.9	%			9.9	%

 

(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.

 

Page 14

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TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING SAME HOSPITALS⁽¹⁾

(Unaudited)

 

(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)		Three Months Ended																Year Ended
		03/31/14				06/30/14				9/30/2014				12/31/2014				12/31/2014
Net inpatient revenues		$	2,367			$	2,327			$	2,337			$	2,591			$	9,622
Net outpatient revenues		$	1,253			$	1,326			$	1,323			$	1,375			$	5,277
Number of acute care hospitals (at end of period)			76				76				76				76				76
Licensed beds (at end of period)			19,899				19,999				19,999				20,051				20,051
Average licensed beds			19,899				19,948				19,999				20,042				19,972
Utilization of licensed beds			50.6	%			48.6	%			48.1	%			48.7	%			49.0	%
Patient days - total			906,671				882,502				884,748				898,342				3,572,263
Adjusted patient days			1,490,202				1,502,017				1,501,624				1,512,593				6,006,436
Net inpatient revenue per patient day		$	2,611			$	2,637			$	2,641			$	2,884			$	2,694
Total admissions			190,389				190,030				192,283				194,160				766,862
Adjusted patient admissions			316,196				326,692				330,219				330,870				1,303,977
Charity and uninsured admissions			12,095				10,509				10,320				10,573				43,497
Net inpatient revenue per admission		$	12,432			$	12,245			$	12,154			$	13,345			$	12,547
Average length of stay (days)			4.76				4.64				4.60				4.63				4.66
Total surgeries			115,911				121,292				122,821				123,855				483,879
Admissions through emergency department			120,165				119,276				118,287				122,089				479,817
Emergency department visits			657,256				690,700				690,765				703,265				2,741,986
Total emergency department admissions and visits			777,421				809,976				809,052				825,354				3,221,803
Outpatient visits			1,789,763				1,890,198				1,905,255				1,917,941				7,503,157
Charity and uninsured outpatient visits			158,501				162,007				158,131				158,485				637,124
Net outpatient revenue per visit		$	700			$	702			$	694			$	717			$	703
Net patient revenue per adjusted patient admission		$	11,449			$	11,182			$	11,084			$	11,987			$	11,426
Net patient revenue per adjusted patient day		$	2,429			$	2,432			$	2,437			$	2,622			$	2,481
Net Patient Revenues from:
Medicare			22.5	%			22.4	%			21.2	%			20.7	%			21.7	%
Medicaid			7.7	%			9.9	%			8.7	%			11.1	%			9.4	%
Managed care			58.3	%			58.3	%			61.1	%			58.3	%			59.0	%
Indemnity, self-pay and other			11.5	%			9.2	%			9.0	%			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

 

Page 15

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TENET HEALTHCARE CORPORATION

SEGMENT REPORTING

(Unaudited)

 

		September 30,				December 31,
		2015				2014
Assets
Hospital Operations and other		$	17,027			$	17,008
Conifer			1,167				929
Ambulatory Care			4,979				204
Total		$	23,173			$	18,141

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2015				2014				2015				2014
Capital expenditures:
Hospital Operations and other		$	194			$	205			$	536			$	711
Conifer			6				4				16				17
Ambulatory Care			7				2				14				6
Total		$	207			$	211			$	566			$	734
Net operating revenues:
Hospital Operations and other		$	4,179			$	3,945			$	12,505			$	11,468
Conifer
Tenet			163				148				488				426
Other customers			184				148				541				440
Total Conifer revenues			347				296				1,029				866
Ambulatory Care			329				82				562				230
Intercompany eliminations			(163	)			(148	)			(488	)			(426	)
Total		$	4,692			$	4,175			$	13,608			$	12,138
Adjusted EBITDA:
Hospital Operations and other		$	383			$	386			$	1,259			$	1,098
Conifer			61				47				204				139
Ambulatory Care			122				26				200				69
Total		$	566			$	459			$	1,663			$	1,306
Depreciation and amortization:
Hospital Operations and other		$	156			$	199			$	525			$	583
Conifer			12				5				36				15
Ambulatory Care			17				3				28				11
Total		$	185			$	207			$	589			$	609
Adjusted EBITDA		$	566			$	459			$	1,663			$	1,306
Depreciation and amortization			(185	)			(207	)			(589	)			(609	)
Impairments and restructuring charges, and acquisition-related costs			(44	)			(37	)			(266	)			(90	)
Litigation and investigation costs			(50	)			(4	)			(67	)			(19	)
Interest expense			(248	)			(186	)			(664	)			(558	)
Loss from early extinguishment of debt			—				(24	)			—				(24	)
Investment Earnings			1				—				—				—
Income from continuing operations before income taxes		$	40			$	1			$	77			$	6

 

Page 16

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TENET HEALTHCARE CORPORATION

STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT

INCLUDING PRO FORMA USPI AND ASPEN FOR ALL PERIODS

(Unaudited)

 

		Three Months Ended September 30
		2015								2014
		Ambulatory Care as Reported Under GAAP				Unconsolidated Affiliates				Ambulatory Care as Reported Under GAAP				Unconsolidated Affiliates
Net operating revenues:
Net operating revenues before provision for doubtful accounts		$	335			$	556			$	291			$	493
Less: Provision for doubtful accounts			(6	)			(14	)			(4	)			(12	)
Net operating revenues(1)			329				542				287				481
Equity in earnings of unconsolidated affiliates(2)			30				—				27				—
Operating expenses:
Salaries, wages and benefits			106				132				93				117
Supplies			64				138				51				119
Other operating expenses, net			67				117				66				102
Depreciation and amortization			17				20				14				19
Impairment and restructuring charges, and acquisition-related costs			2				—				1				—
Operating income			103				135				89				124
Interest expense			(34	)			(7	)			(31	)			(7	)
Other			—				(2	)			—				—
Net income from continuing operations, before income taxes			69				126				58				117
Income tax benefit (expense)			(14	)			(2	)			(12	)			(2	)
Net income			55			$	124				46			$	115
Less: Net income attributable to noncontrolling interests			51								38
Net income attributable to Tenet Healthcare Corporation common shareholders		$	4							$	8
Equity in earnings of unconsolidated affiliates						$	30							$	27

 

(1)	On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 10.1% during the three months ended September 30, 2015, with cases increasing 6.3% and revenue per case increasing 3.5%.

(2)

At September 30, 2015, 157 of the 298 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 141 facilities and account for these investments as consolidated subsidiaries.

 

Page 17

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TENET HEALTHCARE CORPORATION

STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT

INCLUDING PRO FORMA USPI AND ASPEN FOR ALL PERIODS

(Unaudited)

 

		Nine Months Ended September 30,
		2015								2014
		Ambulatory Care as Reported Under GAAP				Unconsolidated Affiliates				Ambulatory Care as Reported Under GAAP				Unconsolidated Affiliates
Net operating revenues:
Net operating revenues before provision for doubtful accounts		$	962			$	1,576			$	843			$	1,380
Less: Provision for doubtful accounts			(16	)			(40	)			(11	)			(34	)
Net operating revenues(1)			946				1,536				832				1,346
Equity in earnings of unconsolidated affiliates(2)			79				—				73				—
Operating expenses:
Salaries, wages and benefits			308				379				271				333
Supplies			174				394				146				336
Other operating expenses, net			212				337				195				291
Depreciation and amortization			46				60				42				56
Impairment and restructuring charges, and acquisition-related costs			2				3				2				(6	)
Operating income			283				363				249				336
Interest expense			(102	)			(21	)			(92	)			(21	)
Other			—				(2	)			—				1
Net income from continuing operations, before income taxes			181				340				157				316
Income tax expense			(36	)			(5	)			(30	)			(6	)
Net Income			145			$	335				127			$	310
Less: Net income attributable to noncontrolling interests			126								101
Net income attributable to Tenet Healthcare Corporation common shareholders		$	19								26
Equity in earnings of unconsolidated affiliates						$	79							$	73

 

(1)	On a pro forma same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 9.2% during the nine months ended September 30, 2015, with cases increasing 7.0% and revenue per case increasing 2.1%.

(2)

At September 30, 2015, 157 of the 298 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 141 facilities and account for these investments as consolidated subsidiaries.

 

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(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) impairment and restructuring charges and acquisition-related costs; and (13) 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 nine months ended September 30, 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 September 30,								Nine Months Ended September 30,
		2015				2014				2015				2014
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(29	)		$	9			$	(43	)		$	(49	)
Less: Net income attributable to noncontrolling interests			(57	)			(9	)			(119	)			(44	)
Net loss from discontinued operations, net of tax			(1	)			(1	)			(1	)			(22	)
Income from continuing operations			29				19				77				17
Income tax benefit (expense)			(11	)			18				—				11
Investment earnings			1				—				—				—
Loss from early extinguishment of debt			—				(24	)			—				(24	)
Interest expense			(248	)			(186	)			(664	)			(558	)
Operating income			287				211				741				588
Litigation and investigation costs			(50	)			(4	)			(67	)			(19	)
Impairment and restructuring charges, and acquisition-related costs			(44	)			(37	)			(266	)			(90	)
Depreciation and amortization			(185	)			(207	)			(589	)			(609	)
Adjusted EBITDA		$	566			$	459			$	1,663			$	1,306
Net operating revenues		$	4,692			$	4,175			$	13,608			$	12,138
Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin)			12.1	%			11.0	%			12.2	%			10.8	%

 

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TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #2 – Reconciliation of Adjusted Free Cash Flow

(Unaudited)

 

(Dollars in millions)		Three Months Ended September 30,								Nine Months Ended September 30,
		2015				2014				2015				2014
Net cash provided by operating activities		$	482			$	221			$	835			$	468
Less:
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements			(71	)			(31	)			(157	)			(115	)
Net cash used in operating activities from discontinued operations			(10	)			(4	)			(18	)			(16	)
Adjusted net cash provided by operating activities – continuing operations			563				256				1,010				599
Purchases of property and equipment – continuing operations			(207	)			(211	)			(566	)			(734	)
Adjusted free cash flow – continuing operations		$	356			$	45			$	444			$	(135	)

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, 2015

(Unaudited)

 

(Dollars in millions)		Q4 2015								2015
		Low				High				Low				High
Net income attributable to Tenet Healthcare Corporation common shareholders		$	15			$	55			$	(28	)		$	12
Less: Net (income) attributable to noncontrolling interests			(61	)			(81	)			(180	)			(200	)
Loss from discontinued operations, net of tax			(4	)			1				(5	)			—
Income from continuing operations			80				135				157				212
Income tax expense			(30	)			(55	)			(30	)			(55	)
Income from continuing operations, before income taxes			110				190				187				267
Interest expense, net			(256	)			(246	)			(920	)			(910	)
Operating income			366				436				1,107				1,177
Impairment and restructuring charges, acquisition-related costs and litigation costs and settlements(a)			—				—				(333	)			(333	)
Depreciation and amortization			(221	)			(201	)			(810	)			(790	)
Adjusted EBITDA		$	587			$	637			$	2,250			$	2,300
Net operating revenues		$	4,742			$	4,942			$	18,350			$	18,550
Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin)			12.4	%			12.9	%			12.3	%			12.4	%

 

(a)	Company does not forecast impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements

 

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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, 2015

(Unaudited)

 

(Dollars in millions)		Q4 2015								2015
		Low				High				Low				High
Adjusted EBITDA		$	587			$	637			$	2,250			$	2,300
Depreciation and amortization			(221	)			(201	)			(810	)			(790	)
Interest expense, net			(256	)			(246	)			(920	)			(910	)
Income (loss) from continuing operations before income taxes			110				190				520				600
Income tax (expense) benefit			(42	)			(67	)			(160	)			(185	)
Normalized income (loss) from continuing operations			68				123				360				415
Net (income) attributable to noncontrolling interests			(61	)			(81	)			(180	)			(200	)
Net income (loss) attributable to common shareholders		$	7			$	42			$	180			$	215
Fully diluted weighted average share outstanding (in millions)			102				102				102				102
Normalized fully diluted earnings per share – continuing operations		$	0.07			$	0.41			$	1.76			$	2.11

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow

for the Year Ending December 31, 2015

 

(Dollars in millions)		2015
		Low				High
Net cash provided by operating activities		$	1,058			$	1,168
Less:
Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(a)			(157	)			(157	)
Net cash used in operating activities from discontinued operations			(35	)			(25	)
Adjusted net cash provided by operating activities – continuing operations		$	1,250			$	1,350
Purchases of property and equipment – continuing operations			(900	)			(850	)
Adjusted free cash flow – continuing operations		$	350			$	500

 

(a)	Company does not forecast impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements

 

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