TENET HEALTHCARE CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - TENET HEALTHCARE CORP	thc-201712318xkearningsrel.htm

Exhibit 99.1

Tenet Reports Results for the Fourth Quarter Ended

December 31, 2017


l	Hospital segment same-hospital admissions increased 0.2%, adjusted admissions increased 1.3%, and revenue per adjusted admission increased 4.8%, resulting in same-hospital net patient revenue growth of 6.1%.


l	Ambulatory Care same-facility system-wide cases increased 4.6% and revenue per case increased 2.2%, resulting in revenue growth of 6.9%.


l	Conifer’s revenues decreased 2.0% with revenue from third parties flat year-over-year.

As a result of the Tax Cuts and Jobs Act, Tenet recorded a $252 million non-cash partial write-down of the Company’s deferred tax assets and a $22 million increase in noncontrolling interest expense, which lowered net income by $274 million in the fourth quarter. In addition, the Company recorded a $99 million after-tax charge, primarily related to the write-down of assets held for sale in Chicago and employee severance. As a result, Tenet reported a net loss from continuing operations attributable to Tenet shareholders of $230 million or $2.28 per diluted share in the fourth quarter. After adjusting for these items, which totaled $373 million or $3.68 per share, Tenet reported Adjusted diluted earnings per share from continuing operations of $1.40.


l	Adjusted EBITDA was $840 million in the fourth quarter, consisting of $538 million in the Hospital segment, $223 million in the Ambulatory segment and $79 million in the Conifer segment.


l	Net cash provided by operating activities in 2017 was $1.200 billion, a $642 million increase when compared to $558 million in 2016. Free Cash Flow was $493 million in 2017, an $810 million increase when compared to an outflow of $317 million in 2016. Adjusted Free Cash Flow was $623 million in 2017, a $243 million increase when compared to $380 million in 2016.


l	2018 Outlook has been increased to reflect net income from continuing operations attributable to Tenet common shareholders of $95 million to $105 million, Adjusted EBITDA of $2.500 billion to $2.600 billion, diluted earnings per share from continuing operations of $0.92 to $1.02 and Adjusted diluted earnings per share from continuing operations of $0.73 to $1.07.

DALLAS - February 26, 2018 - Tenet Healthcare Corporation (NYSE: THC) reported a net loss from continuing operations attributable to Tenet shareholders of $230 million in the fourth quarter of 2017 due to the items mentioned above, compared to a $79 million net loss from continuing operations in the fourth quarter of 2016. Adjusted EBITDA was $840 million in the fourth quarter of 2017 compared to $650 million in the fourth quarter of 2016.

“Our results for the fourth quarter were strong in each of our business segments,” said Ronald A. Rittenmeyer, executive chairman and CEO. “Volume growth returned in our hospital and Ambulatory segments, cost controls were tight, and our financial results at USPI and Conifer were very strong. Our cost control program is off to a great start and, when combined with improved financial performance in the fourth quarter, we are raising our Outlook for Adjusted EBITDA and Adjusted EPS for 2018.”

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment was $4.184 billion, up 3.4 percent from $4.046 billion in the fourth quarter of 2016; in order to improve comparability, these revenue figures exclude revenue generated by the Company’s health plans in both periods since the Company is exiting this business.

On a same-hospital basis, patient revenue was $4.126 billion, up 6.1 percent from $3.889 billion in the fourth quarter of 2016, with adjusted admissions up 1.3 percent and revenue per adjusted admission up 4.8 percent. The growth in revenue per adjusted admission was due to a $202 million increase in revenue from the California Provider Fee Program since the 2017 program was not approved until December 2017.

Adjusted EBITDA in Tenet’s hospital segment was $538 million, representing an increase of $143 million or 36.2 percent as compared to $395 million in the fourth quarter of 2016. The $143 million increase in Adjusted EBITDA in the hospital segment was primarily driven by: (i) $202 million increase in California Provider Fee revenue, with $267 million of revenue being under the program in the fourth quarter of 2017 compared to $65 million in the fourth quarter of 2016; (ii) $17 million unfavorable comparison due to the sale of the Company’s hospitals and related assets in Houston, effective August 1, 2017; (iii) $17 million of previously disclosed executive severance in the fourth quarter of 2017; and, (iv) an $8 million decline in electronic health record incentives.

Tenet’s health plan business was breakeven in the fourth quarter of 2017 versus a loss of $29 million on the EBITDA line in the fourth quarter of 2016. The revenue and expenses associated with the Company’s health plan operations are included in Tenet’s consolidated statements of operations; however, the results are excluded from Adjusted EBITDA in both periods.

Selected operating expenses in the segment, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 2.2 percent on a per adjusted admission basis in the fourth quarter of 2017.

Exchanges

Tenet’s same-hospital exchange admissions were 4,857 in the fourth quarter of 2017, up 0.2 percent from the fourth quarter of 2016. Same-hospital exchange outpatient visits were 51,451 in the fourth quarter of 2017, up 15.2 percent from the fourth quarter of 2016.

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Uncompensated Care

Tenet’s provision for doubtful accounts was $325 million in the fourth quarter of 2017, representing a ratio of 6.1 percent of revenues before bad debt, as compared to $354 million in the fourth quarter of 2016, or 6.9 percent of revenues before bad debt (excluding health plan revenues from both periods). The decrease in the bad debt ratio was primarily attributable to a $15 million decrease in same-hospital self-pay revenues, revenue growth in our Ambulatory segment, the sale of our Houston hospitals in 2017, and a full year of the California Provider Fee revenue being recorded in the fourth quarter of 2017.

Tenet’s uncompensated care costs, defined as the sum of the provision for doubtful accounts, charity care write-offs and uninsured discounts, were $1.361 billion and $1.332 billion in the fourth quarters of 2017 and 2016, respectively, including $1.036 billion and $978 million, respectively, of charity care write-offs and uninsured discounts that were offered through Tenet’s Compact with Uninsured Patients. Uncompensated care in the fourth quarter of 2017 represented 21.5 percent of revenue before bad debts, uninsured discounts and charity care write-offs, flat versus the fourth quarter of 2016. Nearly all of Tenet’s uncompensated care is associated with the Hospital Operations and other segment.

Uninsured plus charity admissions increased by 317 admissions, or 3.3 percent on a same-hospital basis in the fourth quarter of 2017 compared to the fourth quarter of 2016. Uninsured plus charity outpatient visits increased by 6,237 visits, or 5.6 percent, on a same-hospital basis.

Ambulatory Care Segment

During the fourth quarter of 2017, the Ambulatory segment produced net operating revenues of $545 million, representing an increase of 14.0 percent as compared to $478 million in the fourth quarter of 2016. In addition, the Ambulatory segment generated Adjusted EBITDA of $223 million, up 21.9 percent from $183 million in the fourth quarter of 2016 and Adjusted EBITDA less facility-level noncontrolling interest was $145 million, up 26.1 percent from $115 million in the fourth quarter of 2016.

The results of many of the facilities in which the Ambulatory segment has an investment are not consolidated by Tenet. To help analyze the segment’s results of operations, management uses system-wide measures, which include revenues and cases of both consolidated and unconsolidated facilities. On a same-facility system-wide basis, revenue in the Ambulatory segment increased 6.9 percent, with cases increasing 4.6 percent and revenue per case increasing 2.2 percent. The number of surgical days was the same in both periods and did not impact the year-over-year growth rates this quarter.

Conifer Segment

During the fourth quarter of 2017, Conifer’s revenue decreased 2.0 percent to $394 million, down from $402 million in the fourth quarter of 2016. Revenue from third party customers was flat at $239 million. Conifer generated $79 million of Adjusted EBITDA in the fourth quarter of 2017, up 9.7 percent from $72 million in the fourth quarter of 2016.

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Net Income and Earnings Per Share

Tenet reported a net loss from continuing operations attributable to Tenet shareholders of $230 million, or a loss of $2.28 per diluted share, in the fourth quarter of 2017 compared to a net loss of $79 million, or a loss of $0.79 per diluted share, in the fourth quarter of 2016.

As shown on Table #2, the net loss from continuing operations attributable to Tenet shareholders of approximately $230 million included: (i) a $252 million non-cash partial write-down of the Company’s deferred tax assets due to the reduction in the corporate federal income tax rate from 35 percent to 21 percent; (ii) a $138 million pre-tax impairment and restructuring charge consisting of $73 million from the write-down of assets held for sale in the Chicago-area to their estimated fair value, $42 million of restructuring charges primarily related to employee severance associated with the Company’s cost reduction initiatives, and $23 million of other impairment and restructuring charges; and, (iii) $9 million of other items. These items collectively lowered pre-tax income by approximately $147 million and lowered after-tax income by approximately $350 million. In addition, there was a noncontrolling interest impact of $23 million substantially due to a non-cash reduction in the deferred tax liabilities of the Company’s Ambulatory segment. Collectively, these items lowered diluted earnings per share by approximately $3.68.

After adjusting for the items listed on Table #2, Tenet recorded Adjusted net income from continuing operations attributable to Tenet shareholders of $143 million, or $1.40 per diluted share, during the fourth quarter of 2017, as compared to Adjusted net income from continuing operations attributable to Tenet shareholders of $23 million, or $0.23 per diluted share, in the fourth quarter of 2016.

A reconciliation of GAAP net income (loss) attributable to Tenet shareholders to Adjusted net income (loss) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations attributable to Tenet shareholders is contained in Table #2 at the end of this release.

Cash Flow and Liquidity

Cash and cash equivalents were $611 million at December 31, 2017 compared to $429 million at September 30, 2017. The Company had no outstanding borrowings on its $1 billion credit line as of December 31, 2017. Accounts receivable days outstanding from continuing operations were 55.2 at December 31, 2017 compared to 55.6 at September 30, 2017 and 56.5 at December 31, 2016. The calculation of accounts receivable days outstanding from continuing operations: (i) includes the accounts receivable of the Company’s two hospitals in Philadelphia, the Company’s four hospitals in the Chicago-area, Des Peres Hospital in St. Louis, and the Aspen facilities in the United Kingdom, which have been classified in assets held for sale on the Condensed Consolidated Balance Sheet at December 31, 2017; (ii) excludes revenue from our former hospitals and related assets in Houston, which were divested on August 1, 2017, from the 2016 and 2017 periods; (iii) excludes health plan revenues from the 2016 and 2017 periods; and (iv) excludes California Provider Fee revenues from both 2016 and 2017.

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Net cash provided by operating activities in 2017 was $1.200 billion, representing a $642 million increase compared to $558 million in 2016. After subtracting $707 million and $875 million of capital expenditures in 2017 and 2016, respectively, Free Cash Flow was $493 million in 2017, an $810 million improvement compared to an outflow of $317 million in 2016. Adjusted Free Cash Flow was $623 million in 2017, representing a $243 million increase from $380 million in 2016.

Net cash provided by investing activities was $21 million in 2017 compared to $430 million of net cash used in investing activities in 2016. The 2017 period included $827 million of proceeds from the sales of facilities and other assets, primarily from the sale of the Company’s Houston-area hospitals effective August 1, 2017 for net pre-tax proceeds of approximately $750 million; the 2016 period included $573 million of proceeds from the sale of the Company’s hospitals and related outpatient facilities in Georgia.

Net cash used in financing activities was $1.326 billion in 2017 compared to $232 million of net cash provided by financing activities in 2016. The 2017 period included: (i) $729 million related to purchases of noncontrolling interests, primarily the Company’s purchase of an additional 23.7 percent of USPI, which increased Tenet’s ownership interest in the USPI joint venture to 80.0 percent; (ii) the refinancing activities that were completed in the second and third quarters of 2017; and (iii) the redemption of $250 million aggregate principal amount of Tenet’s 8.0 percent senior unsecured notes due 2020 on September 11, 2017.

Reconciliations of net cash provided by operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.

Outlook

The Company’s revised Outlook for 2018 includes:


l	Revenue of $17.9 billion to $18.3 billion,


l	Net income from continuing operations attributable to Tenet common shareholders of $95 million to $105 million,


l	Adjusted EBITDA of $2.500 billion to $2.600 billion,


l	Net cash provided by operating activities of $1.245 billion to $1.450 billion,


l	Adjusted Free Cash Flow of $675 million to $875 million,


l	Diluted earnings per share from continuing operations attributable to Tenet shareholders ranging from $0.92 to $1.02, and


l	Adjusted diluted earnings per share from continuing operations attributable to Tenet shareholders of $0.73 to $1.07.

The Company raised the midpoint of its previous 2018 Adjusted EBITDA Outlook range $25 million to reflect: (i) higher expectations for Conifer; (ii) additional Medicaid DSH reimbursement since Medicaid DSH reimbursement cuts have been delayed in both federal fiscal years 2018 and 2019; (iii) greater than previously expected revenue from the California Provider Fee program in 2018; and (iv) a net reduction in estimated EBITDA from to-be-divested facilities in 2018.

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The Outlook for 2018 assumes equity in earnings of unconsolidated affiliates of $160 million to $170 million, net income attributable to noncontrolling interests of $415 million to $435 million and an average diluted share count of 103 million.

The Company’s Outlook for the first quarter of 2018 includes:


l	Revenue of $4.45 billion to $4.65 billion,


l	Net income from continuing operations attributable to Tenet shareholders of $50 million to $70 million,


l	Adjusted EBITDA of $580 million to $630 million,


l	Earnings per diluted share from continuing operations attributable to Tenet shareholders of $0.49 to $0.69, and


l	Adjusted earnings per diluted share from continuing operations attributable to Tenet shareholders ranging from a loss of $0.10 to earnings of $0.05.

The Outlook for the first quarter assumes equity in earnings of unconsolidated affiliates of approximately $30 million to $35 million, net income attributable to noncontrolling interests of $90 million to $100 million, and an average diluted share count of 102 million.

Additional details on Tenet’s Outlook for both the first quarter and calendar year 2018 are available in Tables #4 and #5 at the end of this press release and in an accompanying slide presentation that is accessible through the Company’s website at www.tenethealth.com/investors.

Management’s Webcast Discussion of Fourth Quarter Results

Tenet management will discuss the Company’s fourth quarter 2017 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 27, 2018. Investors can access the webcast through the Company’s website at www.tenethealth.com/investors. A set of slides, which will be referred to on the conference call, is available on the Quarterly Results section of the Company’s website.

Additional information regarding Tenet’s quarterly results of operations is contained in its Form 10‑K report for the twelve months ended December 31, 2017, which will be filed with the Securities and Exchange Commission and posted on the Company’s website before the webcast.

This press release includes certain non-GAAP measures, such as Adjusted EBITDA, Adjusted net income (loss) from continuing operations attributable to Tenet shareholders, Adjusted diluted earnings (loss) per share from continuing operations attributable to Tenet shareholders, Free Cash Flow and Adjusted Free Cash Flow. Reconciliations of these measures to the most comparable GAAP measure are contained in the tables at the end of this release.

Tenet Healthcare Corporation is a diversified healthcare services company with 120,000 employees united around a common mission: to help people live happier, healthier lives. Through its subsidiaries, partnerships and joint ventures, including United Surgical Partners International, the

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Company operates general acute care and specialty hospitals, ambulatory surgery centers, urgent care centers and other outpatient facilities in the United States and the United Kingdom. Tenet’s Conifer Health Solutions subsidiary provides technology-enabled performance improvement and health management solutions to hospitals, health systems, integrated delivery networks, physician groups, self-insured organizations and health plans. For more information, please visit www.tenethealth.com.

The terms "THC", "Tenet Healthcare Corporation", "the Company", "we", "us" or "our" refer to Tenet Healthcare Corporation or one or more of its subsidiaries or affiliates as applicable.

###



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

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,” “estimate,” “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, 2017, and subsequent Form 10-Q filings and other filings with the Securities and Exchange Commission.

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 December 31,
	2017			%		2016			%		Change
Net operating revenues:
Net operating revenues before provision for doubtful accounts	$	5,303				$	5,214				1.7	%
Less: Provision for doubtful accounts	325					354					(8.2	)%
Net operating revenues	4,978			100.0	%	4,860			100.0	%	2.4	%
Equity in earnings of unconsolidated affiliates	49			1.0	%	46			0.9	%	6.5	%
Operating expenses:
Salaries, wages and benefits	2,284			45.9	%	2,316			47.7	%	(1.4	)%
Supplies	800			16.0	%	773			15.9	%	3.5	%
Other operating expenses, net	1,104			22.2	%	1,205			24.7	%	(8.4	)%
Electronic health record incentives	(1		)	—	%	(9		)	(0.2	)%	(88.9	)%
Depreciation and amortization	208			4.2	%	218			4.5	%
Impairment and restructuring charges, and acquisition-related costs	138			2.8	%	121			2.5	%
Litigation and investigation costs	11			0.2	%	2			—	%
Gains on sales, consolidation and deconsolidation of facilities	(2		)	—	%	0			—	%
Operating income	485			9.7	%	280			5.8	%
Interest expense	(253		)			(249		)
Other non-operating expense, net	(8		)			(2		)
Loss from early extinguishment of debt	—					—
Income from continuing operations, before income taxes	224					29
Income tax expense	(324		)			(6		)
Income (loss) from continuing operations, before discontinued operations	(100		)			23
Discontinued operations:
Income (loss) from operations	1					(1		)
Income tax benefit	—					1
Income (loss) from discontinued operations	1					—
Net income (loss)	(99		)			23
Less: Net income attributable to noncontrolling interests	130					102
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(229	)			$	(79	)
Amounts attributable to Tenet Healthcare Corporation common shareholders
Loss from continuing operations, net of tax	$	(230	)			$	(79	)
Income (loss) from discontinued operations, net of tax	1					—
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(229	)			$	(79	)
Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	(2.28	)			$	(0.79	)
Discontinued operations	0.01					0.00
	$	(2.27	)			$	(0.79	)
Diluted
Continuing operations	$	(2.28	)			$	(0.79	)
Discontinued operations	0.01					0.00
	$	(2.27	)			$	(0.79	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	100,945					99,651
Diluted*	100,945					99,651

*Had we generated income from continuing operations in the three months ended December 31, 2017 and 2016 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 908 thousand and 1,277 thousand shares, respectively.

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TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




(Dollars in millions except per share amounts)	Years Ended December 31,
	2017			%		2016			%		Change
Net operating revenues:
Net operating revenues before provision for doubtful accounts	$	20,613				$	21,070				(2.2	)%
Less: Provision for doubtful accounts	1,434					1,449					(1.0	)%
Net operating revenues	19,179			100.0	%	19,621			100.0	%	(2.3	)%
Equity in earnings of unconsolidated affiliates	144			0.8	%	131			0.7	%	9.9	%
Operating expenses:
Salaries, wages and benefits	9,274			48.4	%	9,328			47.5	%	(0.6	)%
Supplies	3,085			16.1	%	3,124			15.9	%	(1.2	)%
Other operating expenses, net	4,570			23.8	%	4,891			25.0	%	(6.6	)%
Electronic health record incentives	(9		)	0.0	%	(32		)	(0.2	)%	(71.9	)%
Depreciation and amortization	870			4.5	%	850			4.3	%
Impairment and restructuring charges, and acquisition related costs	541			2.8	%	202			1.1	%
Litigation and investigation costs	23			0.1	%	293			1.5	%
Gains on sales, consolidation and deconsolidation of facilities	(144		)	(0.7	)%	(151		)	(0.8	)%
Operating income	1,113			5.8	%	1,247			6.4	%
Interest expense	(1,028		)			(979		)
Other non-operating expense, net	(22		)			(20		)
Loss from early extinguishment of debt	(164		)			—
Income (loss) from continuing operations, before income taxes	(101		)			248
Income tax expense	(219		)			(67		)
Income (loss) from continuing operations, before discontinued operations	(320		)			181
Discontinued operations:
Loss from operations	—					(6		)
Income tax benefit	—					1
Loss from discontinued operations	—					(5		)
Net income (loss)	(320		)			176
Less: Net income attributable to noncontrolling interests	384					368
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(704	)			$	(192	)
Amounts attributable to Tenet Healthcare Corporation common shareholders
Loss from continuing operations, net of tax	$	(704	)			$	(187	)
Loss from discontinued operations, net of tax	—					(5		)
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(704	)			$	(192	)
Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	(7.00	)			$	(1.88	)
Discontinued operations	—					(0.05		)
	$	(7.00	)			$	(1.93	)
Diluted
Continuing operations	$	(7.00	)			$	(1.88	)
Discontinued operations	—					(0.05		)
	$	(7.00	)			$	(1.93	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	100,592					99,321
Diluted*	100,592					99,321

*Had we generated income from continuing operations in the twelve months ended December 31, 2017 and 2016, the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 788 thousand and 1,421 thousand shares, respectively.

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TENET HEALTHCARE CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)




	December 31,			December 31,
(Dollars in millions)	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	611		$	716
Accounts receivable, less allowance for doubtful accounts	2,616			2,897
Inventories of supplies, at cost	289			326
Income tax receivable	5			4
Assets held for sale	1,017			29
Other current assets	1,035			1,285
Total current assets	5,573			5,257
Investments and other assets	1,543			1,250
Deferred income taxes	455			871
Property and equipment, at cost, less accumulated depreciation and amortization	7,030			8,053
Goodwill	7,018			7,425
Other intangible assets, at cost, less accumulated amortization	1,766			1,845
Total assets	$	23,385		$	24,701

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	146		$	191
Accounts payable	1,175			1,329
Accrued compensation and benefits	848			872
Professional and general liability reserves	200			181
Accrued interest payable	256			210
Liabilities held for sale	480			9
Other current liabilities	1,227			1,242
Total current liabilities	4,332			4,034
Long-term debt, net of current portion	14,791			15,064
Professional and general liability reserves	654			613
Defined benefit plan obligations	536			626
Deferred income taxes	36			279
Other long-term liabilities	631			610
Total liabilities	20,980			21,226
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries	1,866			2,393
Equity:
Shareholders’ equity:
Common stock	7			7
Additional paid-in capital	4,859			4,827
Accumulated other comprehensive loss	(204		)	(258		)
Accumulated deficit	(2,390		)	(1,742		)
Common stock in treasury, at cost	(2,419		)	(2,417		)
Total shareholders’ equity (deficit)	(147		)	417
Noncontrolling interests	686			665
Total equity	539			1,082
Total liabilities and equity	$	23,385		$	24,701

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TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)



	Years Ended
(Dollars in millions)	December 31,
	2017			2016
Net income (loss)	$	(320	)	$	176
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	870			850
Provision for doubtful accounts	1,434			1,449
Deferred income tax expense	200			41
Stock-based compensation expense	59			68
Impairment and restructuring charges, and acquisition-related costs	541			202
Litigation and investigation costs	23			293
Gains on sales, consolidation and deconsolidation of facilities	(144		)	(151		)
Loss from early extinguishment of debt	164			—
Equity in earnings of unconsolidated affiliates, net of distributions received	(18		)	(13		)
Amortization of debt discount and debt issuance costs	44			41
Pre-tax loss from discontinued operations	—			6
Other items, net	(18		)	(1		)
Changes in cash from operating assets and liabilities:
Accounts receivable	(1,448		)	(1,604		)
Inventories and other current assets	(35		)	(83		)
Income taxes	(38		)	(8		)
Accounts payable, accrued expenses and other current liabilities	(10		)	(51		)
Other long-term liabilities	26			40
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements	(125		)	(691		)
Net cash used in operating activities from discontinued operations, excluding income taxes	(5		)	(6		)
Net cash provided by operating activities	1,200			558
Cash flows from investing activities:
Purchases of property and equipment — continuing operations	(707		)	(875		)
Purchases of businesses or joint venture interests, net of cash acquired	(50		)	(117		)
Proceeds from sales of facilities and other assets	827			573
Proceeds from sales of marketable securities, long-term investments and other assets	36			62
Purchases of equity investments	(68		)	(39		)
Other long-term assets	(10		)	(31		)
Other items, net	(7		)	(3		)
Net cash provided by (used in) investing activities	21			(430		)
Cash flows from financing activities:
Repayments of borrowings under credit facility	(970		)	(1,895		)
Proceeds from borrowings under credit facility	970			1,895
Repayments of other borrowings	(4,139		)	(154		)
Proceeds from other borrowings	3,795			760
Debt issuance costs	(62		)	(12		)
Distributions paid to noncontrolling interests	(258		)	(218		)
Proceeds from sale of noncontrolling interests	31			22
Purchases of noncontrolling interests	(729		)	(186		)
Proceeds from exercise of stock options and employee stock purchase plan	7			4
Other items, net	29			16
Net cash provided by (used in) financing activities	(1,326		)	232
Net increase (decrease) in cash and cash equivalents	(105		)	360
Cash and cash equivalents at beginning of period	716			356
Cash and cash equivalents at end of period	$	611		$	716
Supplemental disclosures:
Interest paid, net of capitalized interest	$	(939	)	$	(932	)
Income tax payments, net	$	(56	)	$	(33	)

Page 11

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 December 31,									Years Ended December 31,
	2017			2016			Change			2017			2016			Change

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	72			75			(3	)	*	72			75			(3	)	*
Total admissions	186,185			192,104			(3.1	)%		758,875			792,143			(4.2	)%
Adjusted patient admissions	332,642			338,929			(1.9	)%		1,354,266			1,389,768			(2.6	)%
Paying admissions (excludes charity and uninsured)	176,158			181,617			(3.0	)%		717,498			749,634			(4.3	)%
Charity and uninsured admissions	10,027			10,487			(4.4	)%		41,377			42,509			(2.7	)%
Admissions through emergency department	123,887			120,549			2.8	%		492,660			499,335			(1.3	)%
Paying admissions as a percentage of total admissions	94.6		%	94.5		%	0.1	%	*	94.5		%	94.6		%	(0.1	)%	*
Charity and uninsured admissions as a percentage of total admissions	5.4		%	5.5		%	(0.1	)%	*	5.5		%	5.4		%	0.1	%	*
Emergency department admissions as a percentage of total admissions	66.5		%	62.8		%	3.7	%	*	64.9		%	63.0		%	1.9	%	*
Surgeries — inpatient	50,292			53,071			(5.2	)%		205,114			217,906			(5.9	)%
Surgeries — outpatient	68,604			73,678			(6.9	)%		276,895			298,974			(7.4	)%
Total surgeries	118,896			126,749			(6.2	)%		482,009			516,880			(6.7	)%
Patient days — total	857,728			888,185			(3.4	)%		3,509,056			3,690,335			(4.9	)%
Adjusted patient days	1,505,130			1,543,490			(2.5	)%		6,163,961			6,395,025			(3.6	)%
Average length of stay (days)	4.61			4.62			(0.2	)%		4.62			4.66			(0.9	)%
Licensed beds (at end of period)	19,141			20,354			(6.0	)%		19,141			20,354			(6.0	)%
Average licensed beds	19,320			20,326			(4.9	)%		19,995			20,651			(3.2	)%
Utilization of licensed beds	48.3		%	47.5		%	0.8	%	*	48.1		%	48.8		%	(0.7	)%	*
Outpatient Visits
Total visits	1,901,864			1,950,549			(2.5	)%		7,791,125			8,144,473			(4.3	)%
Paying visits (excludes charity and uninsured)	1,777,790			1,834,844			(3.1	)%		7,277,514			7,577,799			(4.0	)%
Charity and uninsured visits	124,074			115,705			7.2	%		513,611			566,674			(9.4	)%
Emergency department visits	711,268			701,100			1.5	%		2,854,200			2,914,421			(2.1	)%
Paying visits as a percentage of total visits	93.5		%	94.1		%	(0.6	)%	*	93.4		%	93.0		%	0.4	%	*
Charity and uninsured visits as a percentage of total visits	6.5		%	5.9		%	0.6	%	*	6.6		%	7.0		%	(0.4	)%	*
Total emergency department admissions and visits	835,155			821,649			1.6	%		3,346,860			3,413,756			(2.0	)%
Revenues
Net inpatient revenues	$	2,721		$	2,606		4.4	%		$	10,319		$	10,619		(2.8	)%
Net outpatient revenues	$	1,450		$	1,457		(0.5	)%		$	5,869		$	5,848		0.4	%
Total patient revenues	$	4,171		$	4,063		2.7	%		$	16,188		$	16,467		(1.7	)%
Revenues on a Per Admission, Per Patient Day and Per Visit Basis
Net inpatient revenue per admission	$	14,614		$	13,566		7.7	%		$	13,598		$	13,405		1.4	%
Net inpatient revenue per patient day	$	3,172		$	2,934		8.1	%		$	2,941		$	2,878		2.2	%
Net outpatient revenue per visit	$	762		$	747		2.0	%		$	753		$	718		4.9	%
Net patient revenue per adjusted patient admission	$	12,539		$	11,988		4.6	%		$	11,953		$	11,849		0.9	%
Net patient revenue per adjusted patient day	$	2,771		$	2,632		5.3	%		$	2,626		$	2,575		2.0	%
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission⁽²⁾	$	10,492		$	10,264		2.2	%		$	10,384		$	10,176		2.0	%
Net Patient Revenues from:
Medicare	18.9		%	20.4		%	(1.5	)%	*	20.0		%	20.5		%	(0.5	)%	*
Medicaid	11.9		%	8.2		%	3.7	%	*	8.1		%	8.2		%	(0.1	)%	*
Managed care	59.6		%	61.4		%	(1.8	)%	*	61.7		%	61.5		%	0.2	%	*
Indemnity, self-pay and other	9.6		%	10.0		%	(0.4	)%	*	10.2		%	9.8		%	0.4	%	*

(1) Represents the consolidated results of Tenet’s acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.

(2) Excludes operating expenses from Tenet's health plans.

* This change is the difference between the 2017 and 2016 amounts shown.

Page 12

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 December 31,									Years Ended December 31,
	2017			2016			Change			2017			2016			Change

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	72			72			—		*	72			72			—		*
Total admissions	184,877			184,561			0.2	%		738,528			753,673			(2.0	)%
Adjusted patient admissions	324,495			320,445			1.3	%		1,294,913			1,310,962			(1.2	)%
Paying admissions (excludes charity and uninsured)	175,025			175,026			—	%		699,613			715,198			(2.2	)%
Charity and uninsured admissions	9,852			9,535			3.3	%		38,915			38,475			1.1	%
Admissions through emergency department	123,102			116,374			5.8	%		480,180			476,068			0.9	%
Paying admissions as a percentage of total admissions	94.7		%	94.8		%	(0.1	)%	*	94.7		%	94.9		%	(0.2	)%	*
Charity and uninsured admissions as a percentage of total admissions	5.3		%	5.2		%	0.1	%	*	5.3		%	5.1		%	0.2	%	*
Emergency department admissions as a percentage of total admissions	66.6		%	63.1		%	3.5	%	*	65.0		%	63.2		%	1.8	%	*
Surgeries — inpatient	50,070			50,971			(1.8	)%		199,871			207,609			(3.7	)%
Surgeries — outpatient	68,432			71,129			(3.8	)%		271,228			286,761			(5.4	)%
Total surgeries	118,502			122,100			(2.9	)%		471,099			494,370			(4.7	)%
Patient days — total	853,217			857,118			(0.5	)%		3,423,934			3,515,087			(2.6	)%
Adjusted patient days	1,485,209			1,481,787			0.2	%		5,964,002			6,080,456			(1.9	)%
Average length of stay (days)	4.62			4.64			(0.4	)%		4.64			4.66			(0.4	)%
Licensed beds (at end of period)	19,035			19,306			(1.4	)%		19,035			19,306			(1.4	)%
Average licensed beds	19,214			19,278			(0.3	)%		19,277			19,315			(0.2	)%
Utilization of licensed beds	48.3		%	48.3		%	—	%	*	48.7		%	49.9		%	(1.2	)%	*
Outpatient Visits
Total visits	1,865,781			1,869,272			(0.2	)%		7,495,754			7,697,302			(2.6	)%
Paying visits (excludes charity and uninsured)	1,747,285			1,757,013			(0.6	)%		7,028,688			7,200,453			(2.4	)%
Charity and uninsured visits	118,496			112,259			5.6	%		467,066			496,849			(6.0	)%
Emergency department visits	676,705			650,573			4.0	%		2,664,448			2,689,519			(0.9	)%
Paying visits as a percentage of total visits	93.6		%	94.0		%	(0.4	)%	*	93.8		%	93.5		%	0.3	%	*
Charity and uninsured visits as a percentage of total visits	6.4		%	6.0		%	0.4	%	*	6.2		%	6.5		%	(0.3	)%	*
Total emergency department admissions and visits	799,807			766,947			4.3	%		3,144,628			3,165,587			(0.7	)%
Revenues
Net inpatient revenues	$	2,695		$	2,518		7.0	%		$	10,037		$	10,089		(0.5	)%
Net outpatient revenues	$	1,431		$	1,371		4.4	%		$	5,626		$	5,452		3.2	%
Total patient revenues	$	4,126		$	3,889		6.1	%		$	15,663		$	15,541		0.8	%
Revenues on a Per Admission, Per Patient Day and Per Visit Basis
Net inpatient revenue per admission	$	14,577		$	13,643		6.8	%		$	13,591		$	13,386		1.5	%
Net inpatient revenue per patient day	$	3,159		$	2,938		7.5	%		$	2,931		$	2,870		2.1	%
Net outpatient revenue per visit	$	767		$	733		4.6	%		$	751		$	708		6.1	%
Net patient revenue per adjusted patient admission	$	12,715		$	12,136		4.8	%		$	12,096		$	11,855		2.0	%
Net patient revenue per adjusted patient day	$	2,778		$	2,625		5.8	%		$	2,626		$	2,556		2.7	%
Net Patient Revenues from:
Medicare	18.9		%	20.8		%	(1.9	)%	*	20.3		%	21.0		%	(0.7	)%	*
Medicaid	12.1		%	8.2		%	3.9	%	*	8.1		%	8.2		%	(0.1	)%	*
Managed care	59.3		%	61.2		%	(1.9	)%	*	61.6		%	61.6		%	—	%	*
Indemnity, self-pay and other	9.7		%	9.8		%	(0.1	)%	*	10.0		%	9.2		%	0.8	%	*

(1) Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 72 hospitals operated throughout the twelve months ended December 31, 2017 and 2016, and associated outpatient facilities but excludes the results of hospitals that Tenet began operating, as well as hospitals Tenet divested, since January 1, 2016.

* This change is the difference between the 2017 and 2016 amounts shown.

Page 13

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



(Dollars in millions except per share amounts)	Three Months Ended												Year Ended
	3/31/2017			6/30/2017			9/30/2017			12/31/2017			12/31/2017
Net operating revenues:
Net operating revenues before provision for doubtful accounts	$	5,196		$	5,173		$	4,941		$	5,303		$	20,613
Less: Provision for doubtful accounts	383			371			355			325			1,434
Net operating revenues	4,813			4,802			4,586			4,978			19,179
Equity in earnings of unconsolidated affiliates	29			28			38			49			144
Operating expenses:
Salaries, wages and benefits	2,380			2,346			2,264			2,284			9,274
Supplies	765			780			740			800			3,085
Other operating expenses, net	1,187			1,159			1,120			1,104			4,570
Electronic health record incentives	(1		)	(6		)	(1		)	(1		)	(9		)
Depreciation and amortization	221			222			219			208			870
Impairment and restructuring charges, and acquisition-related costs	33			41			329			138			541
Litigation and investigation costs	5			1			6			11			23
Gains on sales, consolidation and deconsolidation of facilities	(15		)	(23		)	(104		)	(2		)	(144		)
Operating income	267			310			51			485			1,113
Interest expense	(258		)	(260		)	(257		)	(253		)	(1,028		)
Other non-operating expense, net	(5		)	(5		)	(4		)	(8		)	(22		)
Loss from early extinguishment of debt	—			(26		)	(138		)	—			(164		)
Income (loss) from continuing operations, before income taxes	4			19			(348		)	224			(101		)
Income tax benefit (expense)	33			12			60			(324		)	(219		)
Income (loss) from continuing operations, before discontinued operations	37			31			(288		)	(100		)	(320		)
Discontinued operations:
Income (loss) from operations	(2		)	2			(1		)	1			—
Income tax benefit (expense)	1			(1		)	—			—			—
Income (loss) from discontinued operations	(1		)	1			(1		)	1			—
Net income (loss)	36			32			(289		)	(99		)	(320		)
Less: Net income attributable to noncontrolling interests	89			87			78			130			384
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(53	)	$	(55	)	$	(367	)	$	(229	)	$	(704	)
Amounts attributable to Tenet Healthcare Corporation common shareholders
Loss from continuing operations, net of tax	$	(52	)	$	(56	)	$	(366	)	$	(230	)	$	(704	)
Income (loss) from discontinued operations, net of tax	(1		)	1			(1		)	1			—
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(53	)	$	(55	)	$	(367	)	$	(229	)	$	(704	)
Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	(0.52	)	$	(0.56	)	$	(3.63	)	$	(2.28	)	$	(7.00	)
Discontinued operations	(0.01		)	0.01			(0.01		)	0.01			—
	$	(0.53	)	$	(0.55	)	$	(3.64	)	$	(2.27	)	$	(7.00	)
Diluted
Continuing operations	$	(0.52	)	$	(0.56	)	$	(3.63	)	$	(2.28	)	$	(7.00	)
Discontinued operations	(0.01		)	0.01			(0.01		)	0.01			—
	$	(0.53	)	$	(0.55	)	$	(3.64	)	$	(2.27	)	$	(7.00	)
Weighted average shares and dilutive securities outstanding in thousands):
Basic	100,000			100,612			100,812			100,945			100,592
Diluted	100,000			100,612			100,812			100,945			100,592

Page 14

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												Year Ended
	3/31/2017			6/30/2017			9/30/2017			12/31/2017			12/31/2017

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	76			76			73			72			72
Total admissions	196,907			190,394			185,389			186,185			758,875
Adjusted patient admissions	347,150			342,439			332,035			332,642			1,354,266
Paying admissions (excludes charity and uninsured)	186,648			179,889			174,803			176,158			717,498
Charity and uninsured admissions	10,259			10,505			10,586			10,027			41,377
Admissions through emergency department	126,473			121,807			120,493			123,887			492,660
Paying admissions as a percentage of total admissions	94.8		%	94.5		%	94.3		%	94.6		%	94.5		%
Charity and uninsured admissions as a percentage of total admissions	5.2		%	5.5		%	5.7		%	5.4		%	5.5		%
Emergency department admissions as a percentage of total admissions	64.2		%	64.0		%	65.0		%	66.5		%	64.9		%
Surgeries — inpatient	51,800			52,083			50,939			50,292			205,114
Surgeries — outpatient	69,604			71,366			67,321			68,604			276,895
Total surgeries	121,404			123,449			118,260			118,896			482,009
Patient days — total	923,339			874,930			853,059			857,728			3,509,056
Adjusted patient days	1,603,698			1,552,302			1,502,831			1,505,130			6,163,961
Average length of stay (days)	4.69			4.60			4.60			4.61			4.62
Licensed beds (at end of period)	20,439			20,435			19,433			19,141			19,141
Average licensed beds	20,440			20,435			19,783			19,320			19,995
Utilization of licensed beds	50.2		%	47.0		%	46.9		%	48.3		%	48.1		%
Outpatient Visits
Total visits	2,039,942			1,981,848			1,867,471			1,901,864			7,791,125
Paying visits (excludes charity and uninsured)	1,908,212			1,849,697			1,741,815			1,777,790			7,277,514
Charity and uninsured visits	131,730			132,151			125,656			124,074			513,611
Emergency department visits	733,051			724,785			685,096			711,268			2,854,200
Paying visits as a percentage of total visits	93.5		%	93.3		%	93.3		%	93.5		%	93.4		%
Charity and uninsured visits as a percentage of total visits	6.5		%	6.7		%	6.7		%	6.5		%	6.6		%
Total emergency department admissions and visits	859,524			846,592			805,589			835,155			3,346,860
Revenues
Net inpatient revenues	$	2,609		$	2,555		$	2,434		$	2,721		$	10,319
Net outpatient revenues	$	1,482		$	1,511		$	1,426		$	1,450		$	5,869
Total patient revenues	$	4,091		$	4,066		$	3,860		$	4,171		$	16,188
Revenues on a Per Admission, Per Patient Day and Per Visit Basis
Net inpatient revenue per admission	$	13,250		$	13,420		$	13,129		$	14,614		$	13,598
Net inpatient revenue per patient day	$	2,826		$	2,920		$	2,853		$	3,172		$	2,941
Net outpatient revenue per visit	$	726		$	762		$	764		$	762		$	753
Net patient revenue per adjusted patient admission	$	11,785		$	11,874		$	11,625		$	12,539		$	11,953
Net patient revenue per adjusted patient day	$	2,551		$	2,619		$	2,568		$	2,771		$	2,626
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission⁽²⁾	$	10,290		$	10,394		$	10,367		$	10,492		$	10,384
Net Patient Revenues from:
Medicare	21.0		%	20.1		%	20.0		%	18.9		%	20.0		%
Medicaid	6.7		%	6.9		%	6.5		%	11.9		%	8.1		%
Managed care	62.3		%	62.5		%	62.5		%	59.6		%	61.7		%
Indemnity, self-pay and other	10.0		%	10.5		%	11.0		%	9.6		%	10.2		%


(1)	Represents the consolidated results of Tenet’s acute care hospitals and related outpatient facilities included in the Hospital Operations and other segment.


(2)	Excludes operating expenses from Tenet's health plans.

Page 15

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
	3/31/2017			6/30/2017			9/30/2017			12/31/2017			12/31/2017

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	72			72			72			72			72
Total admissions	189,071			182,610			181,970			184,877			738,528
Adjusted patient admissions	326,533			323,064			320,821			324,495			1,294,913
Paying admissions (excludes charity and uninsured)	179,763			173,034			171,791			175,025			699,613
Charity and uninsured admissions	9,308			9,576			10,179			9,852			38,915
Admissions through emergency department	121,749			116,968			118,361			123,102			480,180
Paying admissions as a percentage of total admissions	95.1		%	94.8		%	94.4		%	94.7		%	94.7		%
Charity and uninsured admissions as a percentage of total admissions	4.9		%	5.2		%	5.6		%	5.3		%	5.3		%
Emergency department admissions as a percentage of total admissions	64.4		%	64.1		%	65.0		%	66.6		%	65.0		%
Surgeries — inpatient	49,735			49,992			50,074			50,070			199,871
Surgeries — outpatient	67,375			68,939			66,482			68,432			271,228
Total surgeries	117,110			118,931			116,556			118,502			471,099
Patient days — total	889,667			842,835			838,215			853,217			3,423,934
Adjusted patient days	1,527,316			1,485,211			1,466,266			1,485,209			5,964,002
Average length of stay (days)	4.71			4.62			4.61			4.62			4.64
Licensed beds (at end of period)	19,285			19,281			19,327			19,035			19,035
Average licensed beds	19,286			19,281			19,328			19,214			19,277
Utilization of licensed beds	51.3		%	48.0		%	47.1		%	48.3		%	48.7		%
Outpatient Visits
Total visits	1,937,168			1,879,210			1,813,595			1,865,781			7,495,754
Paying visits (excludes charity and uninsured)	1,821,837			1,763,098			1,696,468			1,747,285			7,028,688
Charity and uninsured visits	115,331			116,112			117,127			118,496			467,066
Emergency department visits	674,547			666,865			646,331			676,705			2,664,448
Paying visits as a percentage of total visits	94.0		%	93.8		%	93.5		%	93.6		%	93.8		%
Charity and uninsured visits as a percentage of total visits	6.0		%	6.2		%	6.5		%	6.4		%	6.2		%
Total emergency department admissions and visits	796,296			783,833			764,692			799,807			3,144,628
Revenues
Net inpatient revenues	$	2,505		$	2,446		$	2,391		$	2,695		$	10,037
Net outpatient revenues	$	1,390		$	1,419		$	1,386		$	1,431		$	5,626
Total patient revenues	$	3,895		$	3,865		$	3,777		$	4,126		$	15,663
Revenues on a Per Admission, Per Patient Day and Per Visit Basis
Net inpatient revenue per admission	$	13,249		$	13,395		$	13,140		$	14,577		$	13,591
Net inpatient revenue per patient day	$	2,816		$	2,902		$	2,852		$	3,159		$	2,931
Net outpatient revenue per visit	$	718		$	755		$	764		$	767		$	751
Net patient revenue per adjusted patient admission	$	11,928		$	11,964		$	11,773		$	12,715		$	12,096
Net patient revenue per adjusted patient day	$	2,550		$	2,602		$	2,576		$	2,778		$	2,626
Net Patient Revenues from:
Medicare	21.6		%	20.6		%	20.1		%	18.9		%	20.3		%
Medicaid	6.8		%	6.8		%	6.6		%	12.1		%	8.1		%
Managed care	62.2		%	62.6		%	62.3		%	59.3		%	61.6		%
Indemnity, self-pay and other	9.4		%	10.0		%	11.0		%	9.7		%	10.0		%

Page 16

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
	3/31/2016			6/30/2016			9/30/2016			12/31/2016			12/31/2016

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	72			72			72			72			72
Total admissions	195,679			186,668			186,765			184,561			753,673
Adjusted patient admissions	335,006			327,551			327,960			320,445			1,310,962
Paying admissions (excludes charity and uninsured)	186,706			177,090			176,376			175,026			715,198
Charity and uninsured admissions	8,973			9,578			10,389			9,535			38,475
Admissions through emergency department	125,406			118,054			116,234			116,374			476,068
Paying admissions as a percentage of total admissions	95.4		%	94.9		%	94.4		%	94.8		%	94.9		%
Charity and uninsured admissions as a percentage of total admissions	4.6		%	5.1		%	5.6		%	5.2		%	5.1		%
Emergency department admissions as a percentage of total admissions	64.1		%	63.2		%	62.2		%	63.1		%	63.2		%
Surgeries - inpatient	51,719			52,363			52,556			50,971			207,609
Surgeries - outpatient	72,054			73,372			70,206			71,129			286,761
Total surgeries	123,773			125,735			122,762			122,100			494,370
Patient days - total	929,061			865,808			863,100			857,118			3,515,087
Adjusted patient days	1,579,483			1,510,969			1,508,217			1,481,787			6,080,456
Average length of stay (days)	4.75			4.64			4.62			4.64			4.66
Licensed beds (at end of period)	19,332			19,332			19,292			19,306			19,306
Average licensed beds	19,327			19,332			19,319			19,278			19,315
Utilization of licensed beds	53.4		%	49.2		%	48.6		%	48.3		%	49.9		%
Outpatient Visits
Total visits	1,969,133			1,945,124			1,913,773			1,869,272			7,697,302
Paying visits (excludes charity and uninsured)	1,841,053			1,819,407			1,782,980			1,757,013			7,200,453
Charity and uninsured visits	128,080			125,717			130,793			112,259			496,849
Emergency department visits	702,777			673,544			662,625			650,573			2,689,519
Paying visits as a percentage of total visits	93.5		%	93.5		%	93.2		%	94.0		%	93.5		%
Charity and uninsured visits as a percentage of total visits	6.5		%	6.5		%	6.8		%	6.0		%	6.5		%
Total emergency department admissions and visits	828,183			791,598			778,859			766,947			3,165,587
Revenues
Net inpatient revenues	$	2,568		$	2,470		$	2,533		$	2,518		$	10,089
Net outpatient revenues	$	1,370		$	1,377		$	1,334		$	1,371		$	5,452
Total patient revenues	$	3,938		$	3,847		$	3,867		$	3,889		$	15,541
Revenues on a Per Admission, Per Patient Day and Per Visit Basis
Net inpatient revenue per admission	$	13,124		$	13,232		$	13,562		$	13,643		$	13,386
Net inpatient revenue per patient day	$	2,764		$	2,853		$	2,935		$	2,938		$	2,870
Net outpatient revenue per visit	$	696		$	708		$	697		$	733		$	708
Net patient revenue per adjusted patient admission	$	11,755		$	11,745		$	11,791		$	12,136		$	11,855
Net patient revenue per adjusted patient day	$	2,493		$	2,546		$	2,564		$	2,625		$	2,556
Net Patient Revenues from:
Medicare	20.4		%	22.3		%	20.5		%	20.8		%	21.0		%
Medicaid	8.7		%	7.6		%	8.4		%	8.2		%	8.2		%
Managed care	61.7		%	59.5		%	64.3		%	61.2		%	61.6		%
Indemnity, self-pay and other	9.2		%	10.6		%	6.8		%	9.8		%	9.2		%

Page 17

TENET HEALTHCARE CORPORATION

SEGMENT REPORTING

(Unaudited)



(Dollars in millions)							December 31,			December 31,
							2017			2016
Assets
Hospital Operations and other							$	16,466		$	17,871
Ambulatory Care							5,822			5,722
Conifer							1,097			1,108
Total							$	23,385		$	24,701

	Three Months Ended						Years Ended
	December 31,						December 31,
	2017			2016			2017			2016
Capital expenditures:
Hospital Operations and other	$	184		$	242		$	625		$	799
Ambulatory Care	23			9			60			51
Conifer	8			10			22			25
Total	$	215		$	261		$	707		$	875

Net operating revenues:
Hospital Operations and other total prior to inter-segment eliminations⁽¹⁾	$	4,194		$	4,143		$	16,260		$	16,904
Ambulatory Care	545			478			1,940			1,797
Conifer
Tenet	155			163			618			651
Other clients	239			239			979			920
Total Conifer revenues	394			402			1,597			1,571
Inter-segment eliminations	(155		)	(163		)	(618		)	(651		)
Total	$	4,978		$	4,860		$	19,179		$	19,621

Equity in earnings of unconsolidated affiliates:
Hospital Operations and other	$	—		$	3		$	4		$	9
Ambulatory Care	49			43			140			122
Total	$	49		$	46		$	144		$	131

Adjusted EBITDA:
Hospital Operations and other⁽²⁾	$	538		$	395		$	1,462		$	1,586
Ambulatory Care	223			183			699			615
Conifer	79			72			283			277
Total	$	840		$	650		$	2,444		$	2,478

Depreciation and amortization:
Hospital Operations and other	$	176		$	184		$	736		$	709
Ambulatory Care	18			22			84			91
Conifer	14			12			50			50
Total	$	208		$	218		$	870		$	850


(1)	Hospital Operations and other revenues includes health plan revenues of $10 million and $110 million for the three and twelve months ended December 31, 2017, respectively and $97 million and $482 million for the three and twelve months ended December 31, 2016, respectively.


(2)	Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of less than one million and $(41) million for the three and twelve months ended December 31, 2017, respectively and $(29) million and $(37) million for the three and twelve months ended December 31, 2016, respectively.

Page 18

TENET HEALTHCARE CORPORATION

STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT

(Unaudited)




(Dollars in millions)	Three Months Ended December 31,
	2017						2016

	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	$	556		$	625		$	487		$	582
Less: Provision for doubtful accounts	(11		)	(10		)	(9		)	(12		)
Net operating revenues⁽¹⁾	545			615			478			570
Equity in earnings of unconsolidated affiliates⁽²⁾	49			—			43			—
Operating expenses:
Salaries, wages and benefits	165			131			157			124
Supplies	113			157			99			145
Other operating expenses, net	93			104			83			101
Electronic health record incentives	—			—			(1		)	—
Depreciation and amortization	18			16			22			17
Impairment and restructuring charges, and acquisition-related costs	4			—			17			—
(Gains) losses on sales, consolidation and deconsolidation of facilities	(2		)	—			—			4
Operating income	203			207			144			179
Interest expense	(36		)	(5		)	(35		)	(6		)
Other non-operating income (expense), net	1			(1		)	2			—
Income from continuing operations, before income taxes	168			201			111			173
Income tax benefit (expense)	73			(3		)	(17		)	(3		)
Net income	241			$	198		94			$	170
Less: Net income attributable to noncontrolling interests⁽³⁾	111						81
Net income attributable to Tenet Healthcare Corporation common shareholders	$	130					$	13
Equity in earnings of unconsolidated affiliates				$	49					$	43


(1)	On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 6.9% during the three months ended December 31, 2017, with cases increasing 4.6% and revenue per case increasing 2.2%.

(2)

At December 31, 2017, 106 of the 333 facilities in the Company’s 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 227 facilities and account for these investments as consolidated subsidiaries


(3)	During the three months ended December 31, 2017, the Company recorded $22 million of noncontrolling interests expense on a tax benefit of $109 million, as a result of the reduction in the corporate income tax rate from 35% to 21%.

Page 19

TENET HEALTHCARE CORPORATION

STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT

(Unaudited)




(Dollars in millions)	Years Ended December 31,
	2017						2016

	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	$	1,978		$	2,117		$	1,833		$	2,073
Less: Provision for doubtful accounts	(38		)	(41		)	(36		)	(53		)
Net operating revenues⁽¹⁾	1,940			2,076			1,797			2,020
Equity in earnings of unconsolidated affiliates⁽²⁾	140			—			122			—
Operating expenses:
Salaries, wages and benefits	623			483			594			477
Supplies	398			540			365			520
Other operating expenses, net	360			394			346			404
Electronic health record incentives	—			—			(1		)	—
Depreciation and amortization	84			65			91			68
Impairment and restructuring charges, and acquisition-related costs	74			1			26			1
(Gains) losses on sales, consolidation and deconsolidation of facilities	(9		)	—			(33		)	7
Operating income	550			593			531			543
Interest expense	(145		)	(22		)	(140		)	(24		)
Other non-operating income (expense), net	6			(1		)	2			6
Income from continuing operations, before income taxes	411			570			393			525
Income tax benefit (expense)	15			(9		)	(54		)	(8		)
Net Income	426			$	561		339			$	517
Less: Net income attributable to noncontrolling interests⁽³⁾	304						285
Net income attributable to Tenet Healthcare Corporation common shareholders	$	122					$	54
Equity in earnings of unconsolidated affiliates				$	140					$	122


(1)	On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 4.6% during the twelve months ended December 31, 2017, with cases increasing 0.6% and revenue per case increasing 3.9%.

(2)

(3)

During the twelve months ended December 31, 2017, the Company recorded $22 million of noncontrolling interests expense on a tax benefit of $109 million, as a result of the reduction in the corporate income tax rate from 35% to 21%. During the twelve months ended December 31, 2016, the Company recorded $14 million of noncontrolling interests expense related to a $33 million gain on the consolidation of facilities (the gain is not included in Adjusted EBITDA) and an associated $7 million income tax benefit, net of $26 million of impairment and restructuring charges, and acquisition-related costs not included in Adjusted EBITDA.

Page 20

Non-GAAP Financial Measures

Adjusted EBITDA, a non-GAAP measure, 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, (2) net loss (income) attributable to noncontrolling interests, (3) income (loss) from discontinued operations, (4) income tax benefit (expense), (5) other non-operating income (expense), net, (6) gain (loss) from early extinguishment of debt, (7) interest expense, (8) litigation and investigation (costs) benefit, net of insurance recoveries, (9) net gains (losses) on sales, consolidation and deconsolidation of facilities, (10) impairment and restructuring charges and acquisition-related costs, (11) depreciation and amortization and (12) income (loss) from divested operations and closed businesses (i.e., the Company’s health plan businesses). Litigation and investigation costs do not include ordinary course of business malpractice and other litigation and related expense.

Adjusted net income (loss) from continuing operations attributable to Tenet Healthcare Corporation common shareholders, a non-GAAP measure, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) impairment and restructuring charges, and acquisition-related costs, (2) litigation and investigation costs, (3) gains on sales, consolidation and deconsolidation of facilities, (4) gain (loss) from early extinguishment of debt, (5) income (loss) from divested operations and closed businesses, (6) the associated impact of these five items on taxes and noncontrolling interests, and (7) income (loss) from discontinued operations. Adjusted diluted earnings (loss) per share from continuing operations, a non-GAAP term, is defined by the Company as Adjusted net income (loss) from continuing operations attributable to Tenet Healthcare Corporation common shareholders divided by the weighted average primary or diluted shares outstanding in the reporting period.

Free Cash Flow, a non-GAAP measure, is defined by the Company as (1) net cash provided by (used in) operating activities, less (2) purchases of property and equipment from continuing operations.

Adjusted Free Cash Flow, a non-GAAP measure, is defined by the Company as (1) Adjusted net cash provided by (used in) operating activities from continuing operations, less (2) purchases of property and equipment from continuing operations. Adjusted net cash provided by (used in) operating activities, a non-GAAP measure, is defined by the Company as cash provided by (used in) operating activities prior to (1) payments for restructuring charges, acquisition-related costs and litigation costs and settlements, and (2) net cash provided by (used in) operating activities from discontinued operations.

The Company believes the foregoing non-GAAP measures are useful to investors and analysts because they present additional information on the Company’s financial performance. Investors, analysts, Company management and the Company’s Board of Directors utilize these non-GAAP measures, in addition to GAAP measures, to track the Company’s financial and operating performance and compare the Company’s performance to its peer companies, which utilize similar non-GAAP measures in their presentations. The Human Resources Committee of the Company’s Board of Directors also uses certain of these measures to evaluate management’s performance for the purpose of determining incentive compensation. Additional information regarding the purpose and utility of specific non-GAAP measures used in this release is set forth below.

The Company believes that Adjusted EBITDA is a useful measure, in part, because certain investors and analysts use both historical and projected Adjusted EBITDA, in addition to other GAAP and non-GAAP measures, as factors in determining the estimated fair value of shares of the Company’s common stock. Company management also regularly reviews the Adjusted EBITDA performance for each operating segment. The Company does not use Adjusted EBITDA to measure liquidity, but instead to measure operating performance.

We use, and we believe investors and analysts use, Free Cash Flow and Adjusted Free Cash Flow as supplemental measures to analyze cash flows generated from our operations because we believe it is useful to investors in evaluating our ability to fund distributions paid to noncontrolling interests, acquisitions, purchasing equity interests in joint ventures or repaying debt.

These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Because these measures exclude many items that are included in our financial statements, they do not provide a complete measure of our operating performance. For example, the Company’s definitions of Free Cash Flow and Adjusted Free Cash Flow do not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company’s Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, (ii) distributions paid to noncontrolling interests, or (iii) payments under the Put/Call Agreement for USPI redeemable noncontrolling interest, which are recorded on the Statement of Cash Flows as the purchase of noncontrolling interest. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company’s financial performance.

A reconciliation of Adjusted EBITDA to net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, is set forth in Table #1 below for the three and twelve months ended December 31, 2017 and 2016. A reconciliation of Adjusted net income from continuing operations attributable to Tenet Healthcare Corporation common shareholders to net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, is set forth in Table #2 below for the three and twelve months ended December 31, 2017 and 2016. A reconciliation of Free Cash Flow and Adjusted Free Cash Flow to net cash provided by (used in) operating activities, the most comparable GAAP measure, is set forth in Table #3 below for the three and twelve months ended December 31, 2017 and 2016.

Page 21

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #1 – Reconciliation of Adjusted EBITDA to Net Loss

Attributable to Tenet Healthcare Corporation Common Shareholders

(Unaudited)




(Dollars in millions)	Three Months Ended						Years Ended
	December 31,						December 31,
	2017			2016			2017			2016
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(229	)	$	(79	)	$	(704	)	$	(192	)
Less: Net income attributable to noncontrolling interests	(130		)	(102		)	(384		)	(368		)
Income (loss) from discontinued operations, net of tax	1			—			—			(5		)
Income (loss) from continuing operations	(100		)	23			(320		)	181
Income tax expense	(324		)	(6		)	(219		)	(67		)
Loss from early extinguishment of debt	—			—			(164		)	—
Other non-operating expense, net	(8		)	(2		)	(22		)	(20		)
Interest expense	(253		)	(249		)	(1,028		)	(979		)
Operating income	485			280			1,113			1,247
Litigation and investigation costs	(11		)	(2		)	(23		)	(293		)
Gains on sales, consolidation and deconsolidation of facilities	2			—			144			151
Impairment and restructuring charges, and acquisition-related costs	(138		)	(121		)	(541		)	(202		)
Depreciation and amortization	(208		)	(218		)	(870		)	(850		)
Loss from divested and closed businesses	—			(29		)	(41		)	(37		)
Adjusted EBITDA	$	840		$	650		$	2,444		$	2,478

Net operating revenues	$	4,978		$	4,860		$	19,179		$	19,621
Less: Net operating revenues from health plans	10			97			110			482
Adjusted net operating revenues	$	4,968		$	4,763		$	19,069		$	19,139

Net loss attributable to Tenet Healthcare Corporation common shareholders as a % of net operating revenues	(4.6		)%	(1.6		)%	(3.7		)%	(1.0		)%

Adjusted EBITDA as % of adjusted net operating revenues (Adjusted EBITDA margin)	16.9		%	13.6		%	12.8		%	12.9		%

Page 22

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #2 – Pre-Tax, After-Tax and Earnings (Loss) Per Share Impact of Certain Items

on Continuing Operations

(Unaudited)




	Three Months Ended						Years Ended
(Dollars in millions except per share amounts)	December 31,						December 31,
	2017			2016			2017			2016
Adjustments to calculate Adjusted Diluted EPS
Impairment and restructuring charges, and acquisition-related costs⁽¹⁾	$	(138	)	$	(121	)	$	(541	)	$	(202	)
Litigation and investigation costs	(11		)	(2		)	(23		)	(293		)
Gain on sales, consolidation and deconsolidation of facilities⁽²⁾	2			—			144			151
Loss from early extinguishment of debt⁽³⁾	—			—			(164		)	—
Loss from divested and closed businesses	—			(28		)	(41		)	(39		)
Pre-tax impact	(147		)	(151		)	(625		)	(383		)
Tax impact of above items	49			44			114			81
Tax reform adjustment	(252		)	—			(252		)	—
Total after-tax impact	(350		)	(107		)	(763		)	(302		)
Noncontrolling interests impact⁽⁴⁾	(23		)	5			(23		)	(14		)
Total loss from items above	$	(373	)	$	(102	)	$	(786	)	$	(316	)

Net loss attributable to common shareholders	$	(229	)	$	(79	)	$	(704	)	$	(192	)
Less income (loss) from discontinued operations, net of tax	1			—			—			(5		)
Loss from continuing operations, net of tax	(230		)	(79		)	(704		)	(187		)
Loss from adjustments above	373			102			786			316
Adjusted net income from continuing operations attributable to common shareholders	$	143		$	23		$	82		$	129

Weighted average dilutive shares outstanding (in thousands)	101,853			100,928			101,380			100,742
Diluted loss per share from continuing operations	$	(2.28	)	$	(0.79	)	$	(7.00	)	$	(1.88	)
Adjusted diluted earnings per share from continuing operations	$	1.40		$	0.23		$	0.81		$	1.28


(1)	Impairment and restructuring charges, and acquisition-related costs of $541 million in the year ended December 31, 2017 were primarily related to the write-down of assets held for sale in Chicago, Philadelphia and the United Kingdom to their estimated fair value less the estimated costs to sell.


(2)	Gain on sales, consolidation and deconsolidation of facilities of $144 million in the year ended December 31, 2017 was primarily related to a gain on sale of the Company’s former hospitals, physician practices and related assets in Houston, Texas.


(3)	Loss from early extinguishment of debt of $164 million in the year ended December 31, 2017 was related to the Company’s refinancing transactions and debt redemptions.


(4)	During the three months ended December 31, 2017, the Company recorded $22 million of noncontrolling interests expense on a tax benefit of $109 million, as a result of the reduction in the corporate income tax rate from 35% to 21%.

Page 23

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #3 – Reconciliations of Free Cash Flow and Adjusted Free Cash Flow

(Unaudited)




	Three Months Ended						Years Ended
(Dollars in millions)	December 31,						December 31,
	2017			2016			2017			2016
Net cash provided by (used in) operating activities	$	491		$	(293	)	$	1,200		$	558
Purchases of property and equipment	(215		)	(261		)	(707		)	(875		)
Free cash flow	$	276		$	(554	)	$	493		$	(317	)

Net cash provided by (used in) investing activities	$	(206	)	$	(280	)	$	21		$	(430	)
Net cash provided by (used in) financing activities	$	(103	)	$	640		$	(1,326	)	$	232

Net cash provided by (used in) operating activities	$	491		$	(293	)	$	1,200		$	558
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements	(37		)	(559		)	(125		)	(691		)
Net cash used in operating activities from discontinued operations	(2		)	(7		)	(5		)	(6		)
Adjusted net cash provided by operating activities – continuing operations	530			273			1,330			1,255
Purchases of property and equipment – continuing operations	(215		)	(261		)	(707		)	(875		)
Adjusted free cash flow – continuing operations	$	315		$	12		$	623		$	380

Page 24

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #4 – Reconciliation of Outlook Adjusted EBITDA to Outlook Net Income (Loss) Attributable to Tenet Healthcare Corporation Common Shareholders

(Unaudited)




(Dollars in millions, except per share amounts)	Q1 2018						2018
	Low			High			Low			High
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders	$	45		$	70		$	90		$	105
Less: Net income attributable to noncontrolling interests	(90		)	(100		)	(415		)	(435		)
Loss from discontinued operations, net of tax	(5		)	—			(5		)	—
Income from continuing operations	140			170			510			540
Income tax expense	(75		)	(80		)	(215		)	(220		)
Income from continuing operations, before income taxes	215			250			725			760
Interest expense	(250		)	(260		)	(1,000		)	(1,010		)
Loss on early extinguishment of debt	—			—			(5		)	—
Other non-operating expense, net	(5		)	(5		)	(20		)	(25		)
Operating income	470			515			1,750			1,795
Gains on sales, consolidation and deconsolidation of facilities⁽¹⁾	100			120			100			120
Impairment and restructuring charges, acquisition-related costs and litigation costs and settlements⁽¹⁾	(15		)	(25		)	(50		)	(100		)
Depreciation and amortization	(195		)	(205		)	(790		)	(810		)
Loss from divested and closed businesses	—			(5		)	(10		)	(15		)
Adjusted EBITDA	$	580		$	630		$	2,500		$	2,600
Income from continuing operations	$	50		$	70		$	95		$	105
Income from continuing operations as a % of operating revenues	1.1		%	1.5		%	0.5		%	0.6		%
Net operating revenues	$	4,450		$	4,650		$	17,900		$	18,300
Adjusted EBITDA as % of adjusted net operating revenues (Adjusted EBITDA margin)	13.0		%	13.5		%	14.0		%	14.2		%
Adjusted EBITDA	$	580		$	630		$	2,500		$	2,600
Depreciation and amortization	(195		)	(205		)	(790		)	(810		)
Interest expense	(250		)	(260		)	(1,000		)	(1,010		)
Other non-operating expense, net	(5		)	(5		)	(20		)	(25		)
Adjusted income from continuing operations before income taxes	130			160			690			755
Income tax benefit (expense)	(50		)	(55		)	(200		)	(210		)
Adjusted income from continuing operations	80			105			490			545
Net income attributable to noncontrolling interests	(90		)	(100		)	(415		)	(435		)
Adjusted net income (loss) from continuing operations attributable to common shareholders	$	(10	)	$	5		$	75		$	110
Basic weighted average shares outstanding (in millions)	101			101			102			102
Fully diluted weighted average shares outstanding (in millions)	102			102			103			103
Diluted earnings per share from continuing operations	$	0.49		$	0.69		$	0.92		$	1.02
Adjusted diluted earnings (loss) per share from continuing operations	$	(0.10	)	$	0.05		$	0.73		$	1.07

(1)

The Company has provided an estimate of restructuring charges that it anticipates in 2018. The Company does not forecast impairment charges, acquisition-related costs and litigation costs and settlements, because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items are indeterminable at the time the Company provides its financial Outlook. Gains on sales, consolidation and deconsolidation of facilities includes only an estimate for the MacNeal and Baylor joint venture restructuring transactions, which are currently expected to close in the first quarter of 2018.

Page 25

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #5 – Reconciliation of Outlook Adjusted Free Cash Flow

for the Year Ending December 31, 2018




(Dollars in millions)	2018
	Low			High
Net cash provided by operating activities	$	1,245		$	1,450
Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements⁽¹⁾	(50		)	(100		)
Net cash used in operating activities from discontinued operations	(5		)	—
Adjusted net cash provided by operating activities – continuing operations	1,300			1,550
Purchases of property and equipment – continuing operations	(625		)	(675		)
Adjusted free cash flow – continuing operations⁽²⁾	$	675		$	875

(1)

The Company has provided an estimate of payments that it anticipates in 2018 related to restructuring charges. The Company does not forecast payments related to acquisition-related costs and litigation costs and settlements because the Company does not believe that it can forecast these items with sufficient accuracy since some of these items may be indeterminable at the time the Company provides its financial Outlook.

(2)

The Company's definition of Adjusted Free Cash Flow does not include other important uses of cash including (1) cash used to purchase businesses or joint venture interests, or (2) any items that are classified as Cash Flows From Financing Activities on the Company's Consolidated Statement of Cash Flows, including items such as (i) cash used to repay borrowings, (ii) distributions paid to noncontrolling interests, or (iii) payments under the Put/Call Agreement for USPI redeemable noncontrolling interests, which are recorded on the Statement of Cash Flows as the purchase of noncontrolling interests.

Page 26

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