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Tenet Reports Results for the Third Quarter Ended

Monday, November 2, 2015 10 min read
Key Takeaway: Tenet Reports Results for the Third Quarter Ended September 30, 2015 and Announces $500 Million Share Repurchase Authorization DALLAS November 2, 2015 Tenet Healthcare Corporation (NYSE:THC) reported Adjusted EBITDA of $566 million for the third quarter of 2015, an increase of

Full Press Release Details

Tenet Reports Results for the Third Quarter Ended September 30, 2015 and Announces $500 Million
Share Repurchase Authorization
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.
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
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
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.
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
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
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.
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.
uses its company website to provide important information to investors about the company including the posting of important announcements regarding financial performance and corporate developments.
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(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
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(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
TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
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
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
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 )
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS CONTINUING TOTAL HOSPITALS(1)
(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 %*
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS CONTINUING SAME HOSPITALS(1)
(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 % %*
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(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
TENET HEALTHCARE CORPORATION
SELECTED STATISTICS CONTINUING TOTAL HOSPITALS(1)
(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 %
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Last updated: Nov 2, 2015