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Tenet Reports Fourth Quarter and FY 2023 Results; Provides 2024 Financial Outlook

  • Net income from continuing operations available to common shareholders in fourth quarter 2023 was $244 million, or $2.30 per diluted share
  • Adjusted diluted earnings per share from continuing operations1 was $2.68 in fourth quarter 2023
  • Consolidated Adjusted EBITDA1 in fourth quarter 2023 of $1.012 billion increased 12.8% over fourth quarter 2022
  • Fourth quarter 2023 Ambulatory Care Adjusted EBITDA of $464 million increased 14.0% over fourth quarter 2022
  • Same-facility system-wide ambulatory surgical cases increased 3.9% versus fourth quarter 2022; Same-hospital admissions increased 1.0% versus fourth quarter 2022, with non-Covid admissions up 2.6%
  • FY 2024 Adjusted EBITDA Outlook is expected to be in the range of $3.285 billion to $3.485 billion and reflects the closing of the South Carolina hospital sale as of January 31, 2024 and assumes the closing of the California hospital sale on March 31, 2024

Tenet Healthcare Corporation (Tenet) (NYSE: THC) today announced its results for the quarter and year ended December 31, 2023.

"Our businesses performed exceptionally well in 2023, driven by strong same facility revenue growth and disciplined operating management," said Saum Sutaria, M.D., Chairman and Chief Executive Officer of Tenet. "We carry momentum into 2024 and are focused on continuing to expand access to care and investing in cutting edge technology for our patients and physician partners, while strategically reducing our debt and growing our ambulatory care and hospital businesses."

Tenet’s results for fourth quarter 2023 versus fourth quarter 2022 are as follows:

 

Three Months Ended

December 31,

Twelve Months Ended

December 31,

($ in millions, except per share results)

2023

2022

2023

2022

Net operating revenues

$5,379

$4,990

$20,548

$19,174

Net income available to Tenet common shareholders from continuing operations

$244

$102

$611

$410

Net income available to Tenet common shareholders from continuing operations per diluted share

$2.30

$0.92

$5.71

$3.78

Adjusted EBITDA1 excluding grant income

$1,010

$857

$3,525

$3,275

Adjusted EBITDA1

$1,012

$897

$3,541

$3,469

Adjusted diluted earnings per share from continuing operations1

$2.68

$1.96

$6.98

$6.80

  • Net income from continuing operations available to the Company’s common shareholders in the fourth quarter 2023 was $244 million, or $2.30 per diluted share, versus $102 million, or $0.92 per diluted share, in fourth quarter 2022.
  • Fourth quarter 2023 included COVID-related stimulus grant income of $2 million pre-tax ($2 million after-tax, or $0.02 per diluted share) versus $40 million pre-tax ($30 million after-tax, or $0.28 per diluted share) in fourth quarter 2022.
  • The Company recognized additional income tax expense for the three and twelve months ended December 31, 2023 of approximately $15 million, or $0.14 per diluted share, and $73 million, or $0.70 per diluted share, respectively, as a result of interest expense limitations. During 2022, the Company recognized additional income tax expense for the three and twelve months ended December 31, 2022 of approximately $7 million, or $0.07 per diluted share, and $123 million, or $1.11 per diluted share, respectively, as a result of interest expense limitations.
  • Adjusted EBITDA1 excluding grant income in fourth quarter 2023 was $1.010 billion compared to $857 million in fourth quarter 2022, reflecting strong volume growth in our Ambulatory Care and Hospital Operations segments, favorable payer mix, as well as improved contract labor costs. Additionally, in the fourth quarter of 2023, the Company recognized a $52 million aggregate favorable pre-tax impact associated with Medicaid supplemental revenue program adjustments in California and Texas.

Balance Sheet and Cash Flows

  • Cash flows provided by operating activities for the year ended December 31, 2023 were $2.374 billion versus $1.083 billion for the year ended December 31, 2022 (or $2.091 billion excluding $880 million of repayments associated with Medicare advances and $128 million of payroll tax deferrals from FY 2020).
  • The Company produced free cash flow1 of $1.623 billion for the year ended December 31, 2023 versus $321 million for the year ended December 31, 2022 (or $1.329 billion excluding repayments of Medicare advances and deferred payroll tax payments).
  • In the three months ended December 31, 2023, the Company repurchased 1,626,208 shares of common stock for $110 million. In the year ended December 31, 2023, the Company repurchased 3,112,191 shares of common stock for $200 million.
  • The Company’s ratio of net debt to Adjusted EBITDA1 was 3.89x at December 31, 2023 compared to 4.10x at December 31, 2022.

Recent Transactions

  • On February 1, 2024, the Company announced the completion of the sale of three hospitals and related operations in South Carolina to Novant Health for approximately $2.4 billion (approximately $1.75 billion after-tax).
  • On February 1, 2024, the Company announced it had signed a definitive agreement to sell four hospitals and related operations in Orange County and Los Angeles County, California to UCI Health for approximately $975 million (approximately $800 million after-tax). The transaction is expected to be completed in the spring of 2024, subject to customary regulatory approvals, clearances, and closing conditions.
  • The Company estimates that as a result of the pre-tax book gains from these two transactions, the Company's income tax expense would be favorably impacted in 2024 by approximately $190 million due to a reduction in interest expense limitations.

Ambulatory Care (Ambulatory) Segment

Tenet’s Ambulatory business segment is comprised of the operations of United Surgical Partners International (USPI). As of December 31, 2023, USPI had interests in 461 ambulatory surgery centers (322 consolidated) and 24 surgical hospitals (eight consolidated) in 35 states. For all periods prior to June 30, 2022, the Company owned 95% of the voting stock of USPI and now owns 100%.

 

Three Months Ended

December 31,

Twelve Months Ended

December 31,

Ambulatory segment results ($ in millions)

2023

2022

2023

2022

Revenues

 

 

 

 

Net operating revenues

$1,077

$933

$3,865

$3,248

Same-facility system-wide net patient service revenues2

$1,965

$1,794

$7,007

$6,416

Volume Changes versus the Prior-Year Period

 

 

 

 

Same-facility system-wide surgical cases2

3.9 %

0.7 %

5.6 %

2.0 %

Same-facility system-wide surgical cases on same-business day basis2

3.9 %

0.7 %

6.0 %

1.6 %

Adjusted EBITDA, Margins and NCI

 

 

 

 

Adjusted EBITDA excluding grant income

$464

$407

$1,543

$1,323

Adjusted EBITDA

$464

$407

$1,544

$1,327

Adjusted EBITDA margin excluding grant income

43.1%

43.6%

39.9%

40.7%

Adjusted EBITDA margin

43.1%

43.6%

39.9%

40.9%

Adjusted EBITDA less NCI excluding grant income

$280

$262

$958

$856

Adjusted EBITDA less NCI

$280

$262

$958

$858

  • Fourth quarter 2023 net operating revenues increased 15.4% compared to fourth quarter 2022 driven by strong same-facility net surgical case growth, acquisitions and opening of de novo facilities, service line growth and improved pricing yield.
  • Surgical business same-facility system-wide net patient service revenues increased 9.5% in fourth quarter 2023 compared to fourth quarter 2022, with cases up 3.9% and net revenue per case up 5.4%. The Company believes this strong volume growth is due in part to patient care deferred as a result of the pandemic.
  • Fourth quarter 2023 Adjusted EBITDA increased 14.0% relative to fourth quarter 2022, due to strong same-facility system-wide surgical case growth, contributions from acquisitions and de novo facilities, and improved pricing yield.

Hospital Operations and Services (Hospital) Segment

Tenet’s Hospital business segment is primarily comprised of acute care and specialty hospitals, imaging centers, ancillary outpatient facilities, micro-hospitals and physician practices. It also provides comprehensive end-to-end and focused point services, including hospital and physician revenue cycle management, patient communications and engagement support and value-based care solutions. We have combined Conifer with the former Hospital Segment and all prior periods have been revised for this change.

 

Three Months Ended

December 31,

Twelve Months Ended

December 31,

Hospital segment results ($ in millions)

2023

2022

2023

2022

Revenues

 

 

 

 

Net operating revenues

$4,302

$4,057

$16,683

$15,926

Grant income

$2

$40

$15

$190

Same-hospital net patient service revenues3

$3,748

$3,516

$14,458

$13,818

Same-Hospital Volume Changes versus the Prior-Year Period

 

 

 

 

Admissions

1.0%

0.5%

2.2%

(4.5)%

Adjusted admissions4

0.1%

2.9%

2.5%

(1.2)%

Outpatient visits (including outpatient ER visits)

(2.2)%

(2.8)%

(1.3)%

(4.8)%

Emergency Room visits (inpatient and outpatient)

(3.3)%

7.7%

0.1%

4.8%

Hospital surgeries

0.8%

(2.5)%

0.6%

(3.7)%

Adjusted EBITDA

 

 

 

 

Adjusted EBITDA excluding grant income

$546

$450

$1,982

$1,952

Adjusted EBITDA

$548

$490

$1,997

$2,142

Adjusted EBITDA margin excluding grant income

12.7%

11.1%

11.9%

12.3%

Adjusted EBITDA margin

12.7%

12.1%

12.0%

13.4%

  • Fourth quarter 2023 net operating revenues increased 6.0% from fourth quarter 2022 primarily due to increased adjusted admissions, favorable payer mix, and improved pricing yield.
  • Same-hospital net patient service revenue per adjusted admission increased 6.5% year-over-year for fourth quarter 2023 primarily due to improved pricing yield and our focus on growing higher acuity services. Fourth quarter non-COVID inpatient admissions increased 2.6% over fourth quarter 2022.
  • Adjusted EBITDA excluding grant income in fourth quarter 2023 was $546 million compared to $450 million in fourth quarter 2022, reflecting strong non-COVID adjusted admissions growth, favorable payer mix and improved contract labor costs, partially offset by higher other operating expenses. Additionally, in the fourth quarter of 2023, the Company recognized a $52 million aggregate favorable pre-tax impact associated with Medicaid supplemental revenue program adjustments in California and Texas.

2024 Outlook1

Tenet’s Outlook for full year 2024 (consolidated and by segment) and first quarter 2024 follows. This outlook reflects the completion of the sale of our Coastal South Carolina hospitals on January 31, 2024 and assumes that the sale of our four California hospitals will be completed on March 31, 2024.

CONSOLIDATED ($ in millions, except per share amounts)

FY 2024 Outlook

First Quarter

2024 Outlook

Net operating revenues

$19,900 to $20,300

$5,000 to $5,200

Net income from continuing operations available to Tenet common stockholders

$2,172 to $2,417

$1,742 to $1,872

Adjusted EBITDA

$3,285 to $3,485

$800 to $850

Adjusted EBITDA margin

16.5% to 17.2%

16.0% to 16.3%

Diluted income per common share from continuing operations

$20.69 to $23.02

$16.59 to $17.83

Adjusted net income from continuing operations

$605 to $725

$130 to $170

Adjusted diluted earnings per share from continuing operations

$5.76 to $6.90

$1.24 to $1.62

Equity in earnings of unconsolidated affiliates

$220 to $230

$40 to $50

Depreciation and amortization

$840 to $870

$210 to $220

Interest expense

$825 to $835

$220 to $230

Income tax expense5

$840 to $885

$590 to $620

Net income available to NCI

$735 to $785

$160 to $170

Weighted average diluted common shares

~105 million

~105 million

NCI cash distributions

$650 to $700

 

Net cash provided by operating activities6

$1,650 to $2,000

 

Adjusted net cash provided by operating activities6

$1,725 to $2,025

 

Capital expenditures

$775 to $875

 

Free cash flow – continuing operations6

$875 to $1,125

 

Adjusted free cash flow – continuing operations6

$950 to $1,150

 

Ambulatory Segment ($ in millions)

FY 2024 Outlook

Net operating revenues

$4,075 to $4,225

Adjusted EBITDA

$1,615 to $1,685

Total NCI (Facility level)

$625 to $655

Adjusted EBITDA less total NCI

$990 to $1,030

Changes versus prior year7:

 

Surgical cases volumes

Up 1.0% to 3.0%

Net revenues per surgical case

Up 2.0% to 3.0%

Hospital Segment ($ in millions)

FY 2024 Outlook

Net operating revenues

$15,825 to $16,075

Adjusted EBITDA

$1,670 to $1,800

NCI

$110 to $130

Changes versus prior year7:

 

Inpatient admissions

Up 1.0% to 3.0%

Adjusted admissions

Up 1.0% to 3.0%

Management’s Webcast Discussion of Results

Tenet management will discuss the Company’s fourth quarter 2023 results in a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 8, 2024. Investors can access the webcast through the Company’s website at www.tenethealth.com/investors.

The slide presentation associated with the webcast referenced above, a copy of this earnings press release, and a related supplemental financial disclosures document will be available on the Company’s Investor Relations website on February 8, 2024.

Cautionary Statement

This release contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address the Company’s expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “assume,” “believe,” “budget,” “estimate,” “forecast,” “intend,” “plan,” “predict,” “project,” “seek,” “see,” “target,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause the Company’s actual results to be materially different than those expressed in the Company’s 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, 2022 and other filings with the Securities and Exchange Commission.

Footnotes

  1. Tables and discussions throughout this earnings release include certain financial measures, including those related to our first quarter and full year 2024 Outlook, that are not in accordance with accounting principles generally accepted in the United States of America (GAAP). Reconciliations of GAAP measures to the Adjusted (non-GAAP) measures used are detailed in Tables #1-6 included at the end of this earnings release. Management’s reasoning for the use of these non-GAAP measures and descriptions of the various non-GAAP measures are included in the Non-GAAP Financial Measures section of this earnings release.
  2. Same-facility system-wide revenues and statistical information include the results of the facilities in which the Ambulatory segment has an investment that 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.
  3. For 2023, same-hospital revenues and statistical data include those for hospitals and hospital-affiliated outpatient centers operated by the Company’s Hospital segment continuously from January 1, 2022 through December 31, 2023. Amounts associated with physician practices are excluded.
  4. Adjusted admissions represent actual patient admissions adjusted to include outpatient services provided by facilities in our Hospital segment by multiplying actual patient admissions by the sum of gross inpatient revenues and outpatient revenues, then dividing that result by gross inpatient revenues.
  5. Income tax expense is calculated by multiplying 24% (the federal corporate tax rate of 21% plus an estimate of state taxes) by the sum of: pretax income less GAAP facility level NCI expense plus permanent differences, and non-deductible interest expense.
  6. For 2024, Outlook for net cash provided by operating activities, Adjusted net cash provided by operating activities, Free cash flow - continuing operations and Adjusted free cash flow - continuing operations include an estimated $635 million of income tax payments associated with the gains on sale of the three hospitals and related operations in South Carolina and the four hospitals and related operations in California.
  7. Change versus prior year is presented on a same-facility system-wide basis for USPI Ambulatory surgical cases and on a same-hospital basis for hospital statistics.

About Tenet Healthcare

Tenet Healthcare Corporation (NYSE: THC) is a diversified healthcare services company headquartered in Dallas. Our care delivery network includes United Surgical Partners International, the largest ambulatory platform in the country, which operates or has ownership interests in more than 480 ambulatory surgery centers and surgical hospitals. We also operate 58 acute care and specialty hospitals, approximately 160 other outpatient facilities, a network of leading employed physicians and a global business center in Manila, Philippines. Our Conifer Health Solutions subsidiary provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. Across the Tenet enterprise, we are united by our mission to deliver quality, compassionate care in the communities we serve. For more information, please visit www.tenethealth.com.

Non-GAAP Financial Measures

The Company believes the non-GAAP measures described below 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 use similar non-GAAP financial measures in their presentations and earnings releases. 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.

  • Adjusted EBITDA is defined by the Company as net income available (loss attributable) to Tenet common shareholders before (1) the cumulative effect of changes in accounting principles, (2) net loss attributable (income available) to noncontrolling interests, (3) income (loss) from discontinued operations, net of tax, (4) income tax benefit (expense), (5) gain (loss) from early extinguishment of debt, (6) other non-operating income (expense), net, (7) interest expense, (8) litigation and investigation benefit (costs), 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 and closed businesses (i.e., health plan businesses). Litigation and investigation costs excluded do not include ordinary course of business malpractice and other litigation and related expenses.
  • Adjusted diluted earnings (loss) per share from continuing operations is defined by the Company as Adjusted net income available (loss attributable) from continuing operations to Tenet common shareholders, divided by the weighted average diluted shares outstanding in the reporting period.
  • Adjusted net income available (loss attributable) from continuing operations to Tenet common shareholders is defined by the Company as net income available (loss attributable) to Tenet common shareholders before (1) income (loss) from discontinued operations, net of tax, (2) gain (loss) from early extinguishment of debt, (3) litigation and investigation benefit (costs), net of insurance recoveries, (4) net gains (losses) on sales, consolidation and deconsolidation of facilities, (5) impairment and restructuring charges and acquisition-related costs, (6) income (loss) from divested and closed businesses (i.e., health plan businesses) and (7) the associated impact of these items on taxes and noncontrolling interests. Litigation and investigation costs excluded do not include ordinary course of business malpractice and other litigation and related expenses.
  • Free Cash Flow is defined by the Company as (1) net cash provided by (used in) operating activities, less (2) purchases of property and equipment for continuing operations.
  • Adjusted Free Cash Flow 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 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 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.

The Company uses, and believes investors use, Free Cash Flow and Adjusted Free Cash Flow as supplemental non-GAAP measures to analyze cash flows generated from the Company’s operations. The Company believes these measures are useful to investors in evaluating its ability to fund distributions paid to noncontrolling interests or for 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 the Company’s financial statements, they do not provide a complete measure of the Company’s 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, or (ii) distributions paid to noncontrolling interests. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company’s financial performance.

See corresponding reconciliations of the non-GAAP financial measures referred to above to the most comparable GAAP financial measures in Tables #1 - 6 below.

Tenet Healthcare Corporation

Financial Statements and Reconciliations

Fourth Quarter Earnings Release

Table of Contents

Description

Page

Consolidated Statements of Operations

12

Consolidated Balance Sheets

14

Consolidated Statements of Cash Flows

15

Segment Reporting

16

Table #1 – Reconciliations of Net Income to Adjusted Net Income

17

Table #2 – Reconciliations of Net Income to Adjusted EBITDA

18

Table #3 – Reconciliations of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow

19

Table #4 – Reconciliations of Outlook Net Income to Outlook Adjusted Net Income

20

Table #5 – Reconciliations of Outlook Net Income to Outlook Adjusted EBITDA

21

Table #6 – Reconciliations of Outlook Net Cash Provided by Operating Activities to Outlook Free Cash Flow and Outlook Adjusted Free Cash Flow

22

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

(Dollars in millions, except per share amounts)

 

Three Months Ended December 31,

 

2023

 

%

 

2022

 

%

 

Change

Net operating revenues

 

$

5,379

 

 

100.0

%

 

$

4,990

 

 

100.0

%

 

7.8

%

Grant income

 

 

2

 

 

%

 

 

40

 

 

0.8

%

 

(95.0

)%

Equity in earnings of unconsolidated affiliates

 

 

73

 

 

1.4

%

 

 

65

 

 

1.3

%

 

12.3

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

2,315

 

 

43.0

%

 

 

2,306

 

 

46.2

%

 

0.4

%

Supplies

 

 

931

 

 

17.3

%

 

 

860

 

 

17.2

%

 

8.3

%

Other operating expenses, net

 

 

1,196

 

 

22.2

%

 

 

1,032

 

 

20.7

%

 

15.9

%

Depreciation and amortization

 

 

216

 

 

4.0

%

 

 

213

 

 

4.3

%

 

 

Impairment and restructuring charges, and acquisition-related costs

 

 

53

 

 

1.0

%

 

 

129

 

 

2.6

%

 

 

Litigation and investigation costs

 

 

19

 

 

0.4

%

 

 

20

 

 

0.4

%

 

 

Net gains on sales, consolidation and deconsolidation of facilities

 

 

(11

)

 

(0.2

)%

 

 

(1

)

 

%

 

 

Operating income

 

 

735

 

 

13.7

%

 

 

536

 

 

10.7

%

 

 

Interest expense

 

 

(227

)

 

 

 

 

(219

)

 

 

 

 

Other non-operating income, net

 

 

11

 

 

 

 

 

4

 

 

 

 

 

Income from continuing operations, before income taxes

 

 

519

 

 

 

 

 

321

 

 

 

 

 

Income tax expense

 

 

(63

)

 

 

 

 

(47

)

 

 

 

 

Net income

 

 

456

 

 

 

 

 

274

 

 

 

 

 

Less: Net income available to noncontrolling interests

 

 

212

 

 

 

 

 

172

 

 

 

 

 

Net income available to Tenet Healthcare Corporation common shareholders

 

$

244

 

 

 

 

$

102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share available to Tenet Healthcare Corporation common shareholders:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.42

 

 

 

 

$

0.98

 

 

 

 

 

Diluted

 

$

2.30

 

 

 

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares and dilutive securities outstanding

(in thousands):

 

 

 

 

 

 

 

 

 

 

Basic

 

 

100,956

 

 

 

 

 

104,519

 

 

 

 

 

Diluted

 

 

104,167

 

 

 

 

 

106,368

 

 

 

 

 

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

(Dollars in millions, except per share amounts)

 

Twelve Months Ended December 31,

 

2023

 

%

 

2022

 

%

 

Change

Net operating revenues

 

$

20,548

 

 

100.0

%

 

$

19,174

 

 

100.0

%

 

7.2

%

Grant income

 

 

16

 

 

0.1

%

 

 

194

 

 

1.0

%

 

(91.8

)%

Equity in earnings of unconsolidated affiliates

 

 

228

 

 

1.1

%

 

 

216

 

 

1.1

%

 

5.6

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

9,146

 

 

44.5

%

 

 

8,844

 

 

46.1

%

 

3.4

%

Supplies

 

 

3,590

 

 

17.5

%

 

 

3,273

 

 

17.0

%

 

9.7

%

Other operating expenses, net

 

 

4,515

 

 

22.0

%

 

 

3,998

 

 

20.8

%

 

12.9

%

Depreciation and amortization

 

 

870

 

 

4.2

%

 

 

841

 

 

4.4

%

 

 

Impairment and restructuring charges, and acquisition-related costs

 

 

137

 

 

0.7

%

 

 

226

 

 

1.2

%

 

 

Litigation and investigation costs

 

 

47

 

 

0.2

%

 

 

70

 

 

0.4

%

 

 

Net gains on sales, consolidation and deconsolidation of facilities

 

 

(23

)

 

(0.1

)%

 

 

(1

)

 

%

 

 

Operating income

 

 

2,510

 

 

12.2

%

 

 

2,333

 

 

12.2

%

 

 

Interest expense

 

 

(901

)

 

 

 

 

(890

)

 

 

 

 

Other non-operating income, net

 

 

19

 

 

 

 

 

10

 

 

 

 

 

Loss from early extinguishment of debt

 

 

(11

)

 

 

 

 

(109

)

 

 

 

 

Income from continuing operations, before income taxes

 

 

1,617

 

 

 

 

 

1,344

 

 

 

 

 

Income tax expense

 

 

(306

)

 

 

 

 

(344

)

 

 

 

 

Income from continuing operations, before discontinued operations

 

 

1,311

 

 

 

 

 

1,000

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations

 

 

 

 

 

 

 

1

 

 

 

 

 

Net income

 

 

1,311

 

 

 

 

 

1,001

 

 

 

 

 

Less: Net income available to noncontrolling interests

 

 

700

 

 

 

 

 

590

 

 

 

 

 

Net income available to Tenet Healthcare Corporation common shareholders

 

$

611

 

 

 

 

$

411

 

 

 

 

 

Amounts available to Tenet Healthcare Corporation common shareholders:

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of tax

 

$

611

 

 

 

 

$

410

 

 

 

 

 

Income from discontinued operations, net of tax

 

 

 

 

 

 

 

1

 

 

 

 

 

Net income available to Tenet Healthcare Corporation common shareholders

 

$

611

 

 

 

 

$

411

 

 

 

 

 

Earnings per share available to Tenet Healthcare Corporation common shareholders:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

6.01

 

 

 

 

$

3.83

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

 

$

6.01

 

 

 

 

$

3.84

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

5.71

 

 

 

 

$

3.78

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

 

$

5.71

 

 

 

 

$

3.79

 

 

 

 

 

Weighted average shares and dilutive securities outstanding

(in thousands):

 

 

 

 

 

 

 

 

 

 

Basic

 

 

101,639

 

 

 

 

 

106,929

 

 

 

 

 

Diluted

 

 

104,800

 

 

 

 

 

110,516

 

 

 

 

 

TENET HEALTHCARE CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in millions)

 

December 31,

 

December 31,

 

2023

 

2022

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,228

 

 

$

858

 

Accounts receivable

 

 

2,914

 

 

 

2,943

 

Inventories of supplies, at cost

 

 

411

 

 

 

405

 

Assets held for sale

 

 

775

 

 

 

 

Other current assets

 

 

1,839

 

 

 

1,775

 

Total current assets

 

 

7,167

 

 

 

5,981

 

Investments and other assets

 

 

3,157

 

 

 

3,147

 

Deferred income taxes

 

 

77

 

 

 

19

 

Property and equipment, at cost, less accumulated depreciation and amortization

 

 

6,236

 

 

 

6,462

 

Goodwill

 

 

10,307

 

 

 

10,123

 

Other intangible assets, at cost, less accumulated amortization

 

 

1,368

 

 

 

1,424

 

Total assets

 

$

28,312

 

 

$

27,156

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of long-term debt

 

$

120

 

 

$

145

 

Accounts payable

 

 

1,408

 

 

 

1,504

 

Accrued compensation and benefits

 

 

930

 

 

 

778

 

Professional and general liability reserves

 

 

254

 

 

 

255

 

Accrued interest payable

 

 

200

 

 

 

213

 

Liabilities held for sale

 

 

69

 

 

 

 

Other current liabilities

 

 

1,779

 

 

 

1,581

 

Total current liabilities

 

 

4,760

 

 

 

4,476

 

Long-term debt, net of current portion

 

 

14,882

 

 

 

14,934

 

Professional and general liability reserves

 

 

792

 

 

 

790

 

Defined benefit plan obligations

 

 

335

 

 

 

331

 

Deferred income taxes

 

 

326

 

 

 

217

 

Other long-term liabilities

 

 

1,709

 

 

 

1,800

 

Total liabilities

 

 

22,804

 

 

 

22,548

 

Commitments and contingencies

 

 

 

 

Redeemable noncontrolling interests in equity of consolidated subsidiaries

 

 

2,391

 

 

 

2,149

 

Equity:

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

4,834

 

 

 

4,778

 

Accumulated other comprehensive loss

 

 

(181

)

 

 

(181

)

Accumulated deficit

 

 

(192

)

 

 

(803

)

Common stock in treasury, at cost

 

 

(2,861

)

 

 

(2,660

)

Total shareholders’ equity

 

 

1,608

 

 

 

1,142

 

Noncontrolling interests

 

 

1,509

 

 

 

1,317

 

Total equity

 

 

3,117

 

 

 

2,459

 

Total liabilities and equity

 

$

28,312

 

 

$

27,156

 

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

(Dollars in millions)

 

Year Ended

 

December 31,

 

2023

 

2022

Net income

 

$

1,311

 

 

$

1,001

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

870

 

 

 

841

 

Deferred income tax expense

 

 

52

 

 

 

209

 

Stock-based compensation expense

 

 

66

 

 

 

56

 

Impairment and restructuring charges, and acquisition-related costs

 

 

137

 

 

 

226

 

Litigation and investigation costs

 

 

47

 

 

 

70

 

Net gains on sales, consolidation and deconsolidation of facilities

 

 

(23

)

 

 

(1

)

Loss from early extinguishment of debt

 

 

11

 

 

 

109

 

Equity in earnings of unconsolidated affiliates, net of distributions received

 

 

(13

)

 

 

2

 

Amortization of debt discount and debt issuance costs

 

 

32

 

 

 

33

 

Pre-tax income from discontinued operations

 

 

 

 

 

(1

)

Net gains from the sale of investments and long-lived assets

 

 

(29

)

 

 

(117

)

Other items, net

 

 

(4

)

 

 

13

 

Changes in cash from operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(29

)

 

 

(140

)

Inventories and other current assets

 

 

(139

)

 

 

(64

)

Income taxes

 

 

10

 

 

 

(26

)

Accounts payable, accrued expenses, contract liabilities and other current liabilities

 

 

215

 

 

 

(898

)

Other long-term liabilities

 

 

14

 

 

 

(15

)

Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements

 

 

(154

)

 

 

(214

)

Net cash used in operating activities from discontinued operations, excluding income taxes

 

 

 

 

 

(1

)

Net cash provided by operating activities

 

 

2,374

 

 

 

1,083

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

 

(751

)

 

 

(762

)

Purchases of businesses or joint venture interests, net of cash acquired

 

 

(224

)

 

 

(234

)

Proceeds from sales of facilities and other assets

 

 

71

 

 

 

210

 

Proceeds from sales of marketable securities and long-term investments

 

 

50

 

 

 

76

 

Purchases of marketable securities and equity investments

 

 

(104

)

 

 

(92

)

Other items, net

 

 

(11

)

 

 

(6

)

Net cash used in investing activities

 

 

(969

)

 

 

(808

)

Cash flows from financing activities:

 

 

 

 

Repayments of borrowings

 

 

(1,542

)

 

 

(2,851

)

Proceeds from borrowings

 

 

1,370

 

 

 

2,023

 

Repurchases of common stock

 

 

(200

)

 

 

(250

)

Debt issuance costs

 

 

(16

)

 

 

(24

)

Distributions paid to noncontrolling interests

 

 

(594

)

 

 

(560

)

Proceeds from the sale of noncontrolling interests

 

 

43

 

 

 

27

 

Purchases of noncontrolling interests

 

 

(167

)

 

 

(100

)

Other items, net

 

 

71

 

 

 

(46

)

Net cash used in financing activities

 

 

(1,035

)

 

 

(1,781

)

Net increase (decrease) in cash and cash equivalents

 

 

370

 

 

 

(1,506

)

Cash and cash equivalents at beginning of period

 

 

858

 

 

 

2,364

 

Cash and cash equivalents at end of period

 

$

1,228

 

 

$

858

 

Supplemental disclosures:

 

 

 

 

Interest paid, net of capitalized interest

 

$

(882

)

 

$

(848

)

Income tax payments, net

 

$

(243

)

 

$

(161

)

TENET HEALTHCARE CORPORATION

SEGMENT REPORTING

(Unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

(Dollars in millions)

 

2023

 

2022

 

2023

 

2022

Net operating revenues:

 

 

 

 

 

 

 

 

Ambulatory Care

 

$

1,077

 

 

$

933

 

 

$

3,865

 

 

$

3,248

 

Hospital Operations and Services

 

 

4,302

 

 

 

4,057

 

 

 

16,683

 

 

 

15,926

 

Total

 

$

5,379

 

 

$

4,990

 

 

$

20,548

 

 

$

19,174

 

 

 

 

 

 

 

 

 

 

Equity in earnings of unconsolidated affiliates:

 

 

 

 

 

 

 

 

Ambulatory Care

 

$

69

 

 

$

63

 

 

$

218

 

 

$

206

 

Hospital Operations and Services

 

 

4

 

 

 

2

 

 

 

10

 

 

 

10

 

Total

 

$

73

 

 

$

65

 

 

$

228

 

 

$

216

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (including grant income):

 

 

 

 

 

 

 

 

Ambulatory Care

 

$

464

 

 

$

407

 

 

$

1,544

 

 

$

1,327

 

Hospital Operations and Services

 

 

548

 

 

 

490

 

 

 

1,997

 

 

 

2,142

 

Total

 

$

1,012

 

 

$

897

 

 

$

3,541

 

 

$

3,469

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margins (including grant income):

 

 

 

 

 

 

 

 

Ambulatory Care

 

 

43.1

%

 

 

43.6

%

 

 

39.9

%

 

 

40.9

%

Hospital Operations and Services

 

 

12.7

%

 

 

12.1

%

 

 

12.0

%

 

 

13.4

%

Total

 

 

18.8

%

 

 

18.0

%

 

 

17.2

%

 

 

18.1

%

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margins (excluding grant income):

 

 

 

 

 

 

 

 

Ambulatory Care

 

 

43.1

%

 

 

43.6

%

 

 

39.9

%

 

 

40.7

%

Hospital Operations and Services

 

 

12.7

%

 

 

11.1

%

 

 

11.9

%

 

 

12.3

%

Total

 

 

18.8

%

 

 

17.2

%

 

 

17.2

%

 

 

17.1

%

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

Ambulatory Care

 

$

22

 

 

$

17

 

 

$

80

 

 

$

75

 

Hospital Operations and Services

 

 

186

 

 

 

273

 

 

 

671

 

 

 

687

 

Total

 

$

208

 

 

$

290

 

 

$

751

 

 

$

762

 

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #1 – Reconciliations of Net Income Available to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders

(Unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

(Dollars in millions, except per share amounts)

 

2023

 

2022

 

2023

 

2022

Net income available to Tenet Healthcare Corporation common shareholders

 

$

244

 

 

$

102

 

 

$

611

 

 

$

411

 

Less:

 

 

 

 

 

 

 

 

Net income from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

1

 

Net income from continuing operations

 

 

244

 

 

 

102

 

 

 

611

 

 

 

410

 

Impairment and restructuring charges, and acquisition-related costs

 

 

(53

)

 

 

(129

)

 

 

(137

)

 

 

(226

)

Litigation and investigation costs

 

 

(19

)

 

 

(20

)

 

 

(47

)

 

 

(70

)

Net gains on sales, consolidation and deconsolidation of facilities

 

 

11

 

 

 

1

 

 

 

23

 

 

 

1

 

Loss from early extinguishment of debt

 

 

 

 

 

 

 

 

(11

)

 

 

(109

)

Tax and noncontrolling interests impact of above items

 

 

22

 

 

 

37

 

 

 

39

 

 

 

70

 

Adjusted net income available from continuing operations to common shareholders

 

$

283

 

 

$

213

 

 

$

744

 

 

$

744

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$

2.30

 

 

$

0.92

 

 

$

5.71

 

 

$

3.78

 

Less:

 

 

 

 

 

 

 

 

Impairment and restructuring charges, and acquisition-related costs

 

 

(0.51

)

 

 

(1.21

)

 

 

(1.31

)

 

 

(2.04

)

Litigation and investigation costs

 

 

(0.18

)

 

 

(0.19

)

 

 

(0.45

)

 

 

(0.63

)

Net gains on sales, consolidation and deconsolidation of facilities

 

 

0.10

 

 

 

0.01

 

 

 

0.22

 

 

 

0.01

 

Loss from early extinguishment of debt

 

 

 

 

 

 

 

 

(0.10

)

 

 

(0.99

)

Tax and noncontrolling interests impact of above items

 

 

0.21

 

 

 

0.35

 

 

 

0.37

 

 

 

0.63

 

Adjusted diluted earnings per share from continuing operations

 

$

2.68

 

 

$

1.96

 

 

$

6.98

 

 

$

6.80

 

 

 

 

 

 

 

 

 

 

Weighted average basic shares outstanding (in thousands)

 

 

100,956

 

 

 

104,519

 

 

 

101,639

 

 

 

106,929

 

Weighted average dilutive shares outstanding (in thousands)

 

 

104,167

 

 

 

106,368

 

 

 

104,800

 

 

 

110,516

 

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #2 – Reconciliations of Net Income Available to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA

(Unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

(Dollars in millions)

 

2023

 

2022

 

2023

 

2022

Net income available to Tenet Healthcare Corporation common shareholders

 

$

244

 

 

$

102

 

 

$

611

 

 

$

411

 

Less:

 

 

 

 

 

 

 

 

Net income available to noncontrolling interests

 

 

(212

)

 

 

(172

)

 

 

(700

)

 

 

(590

)

Income from discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

1

 

Income from continuing operations

 

 

456

 

 

 

274

 

 

 

1,311

 

 

 

1,000

 

Income tax expense

 

 

(63

)

 

 

(47

)

 

 

(306

)

 

 

(344

)

Loss from early extinguishment of debt

 

 

 

 

 

 

 

 

(11

)

 

 

(109

)

Other non-operating income, net

 

 

11

 

 

 

4

 

 

 

19

 

 

 

10

 

Interest expense

 

 

(227

)

 

 

(219

)

 

 

(901

)

 

 

(890

)

Operating income

 

 

735

 

 

 

536

 

 

 

2,510

 

 

 

2,333

 

Litigation and investigation costs

 

 

(19

)

 

 

(20

)

 

 

(47

)

 

 

(70

)

Net gains on sales, consolidation and deconsolidation of facilities

 

 

11

 

 

 

1

 

 

 

23

 

 

 

1

 

Impairment and restructuring charges, and acquisition-related costs

 

 

(53

)

 

 

(129

)

 

 

(137

)

 

 

(226

)

Depreciation and amortization

 

 

(216

)

 

 

(213

)

 

 

(870

)

 

 

(841

)

Adjusted EBITDA

 

$

1,012

 

 

$

897

 

 

$

3,541

 

 

$

3,469

 

 

 

 

 

 

 

 

 

 

Net operating revenues

 

$

5,379

 

 

$

4,990

 

 

$

20,548

 

 

$

19,174

 

 

 

 

 

 

 

 

 

 

Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues

 

 

4.5

%

 

 

2.0

%

 

 

3.0

%

 

 

2.1

%

 

 

 

 

 

 

 

 

 

Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)

 

 

18.8

%

 

 

18.0

%

 

 

17.2

%

 

 

18.1

%

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #3 – Reconciliations of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow from Continuing Operations

(Unaudited)

 

 

2023

(Dollars in millions)

 

Q4

 

YTD

Net cash provided by operating activities

 

$

824

 

 

$

2,374

 

Purchases of property and equipment

 

 

(208

)

 

 

(751

)

Free cash flow – continuing operations

 

$

616

 

 

$

1,623

 

 

 

 

 

 

Net cash used in investing activities

 

$

(333

)

 

$

(969

)

Net cash used in financing activities

 

$

(317

)

 

$

(1,035

)

 

 

 

 

 

Net cash provided by operating activities

 

$

824

 

 

$

2,374

 

Less:

 

 

 

 

Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements

 

 

(49

)

 

 

(154

)

Adjusted net cash provided by operating activities from continuing operations

 

 

873

 

 

 

2,528

 

Purchases of property and equipment

 

 

(208

)

 

 

(751

)

Adjusted free cash flow – continuing operations

 

$

665

 

 

$

1,777

 

 

 

 

2022

(Dollars in millions)

 

Q4

 

YTD

Net cash provided by operating activities

 

$

421

 

 

$

1,083

 

Purchases of property and equipment

 

 

(290

)

 

 

(762

)

Free cash flow - continuing operations

 

 

131

 

 

 

321

 

Add back:

 

 

 

 

Medicare Advance Repayments

 

 

 

 

 

880

 

Payroll Tax Deferral Payments

 

 

128

 

 

 

128

 

Free cash flow – continuing operations, excluding repayments of Medicare Advances and Deferred Payroll Tax Payments

 

$

259

 

 

$

1,329

 

 

 

 

 

 

Net cash used in investing activities

 

$

(306

)

 

$

(808

)

Net cash used in financing activities

 

$

(465

)

 

$

(1,781

)

 

 

 

 

 

Net cash provided by operating activities

 

$

421

 

 

$

1,083

 

Less:

 

 

 

 

Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements

 

 

(57

)

 

 

(214

)

Net cash used in operating activities from discontinued operations

 

 

 

 

 

(1

)

Adjusted net cash provided by operating activities from continuing operations

 

 

478

 

 

 

1,298

 

Purchases of property and equipment

 

 

(290

)

 

 

(762

)

Adjusted free cash flow – continuing operations

 

 

188

 

 

 

536

 

Add back:

 

 

 

 

Medicare Advance Repayments

 

 

 

 

 

880

 

Payroll Tax Deferral Payments

 

 

128

 

 

 

128

 

Adjusted free cash flow – continuing operations, excluding repayments of Medicare Advances and Deferred Payroll Tax Payments

 

$

316

 

 

$

1,544

 

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #4 – Reconciliations of Outlook Net Income Available to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted Net Income Available from Continuing Operations to Common Shareholders

(Unaudited)

 

 

 

First Quarter 2024

 

FY 2024

(Dollars in millions, except per share amounts)

 

Low

 

High

 

Low

 

High

Net income available to Tenet Healthcare Corporation common shareholders

 

$

1,742

 

 

$

1,872

 

 

$

2,172

 

 

$

2,417

 

Less:

 

 

 

 

 

 

 

 

Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1)

 

 

(20

)

 

 

(10

)

 

 

(75

)

 

 

(25

)

Net gains on sales, consolidation and deconsolidation of facilities

 

 

2,150

 

 

 

2,250

 

 

 

2,150

 

 

 

2,250

 

Loss from early extinguishment of debt(2)

 

 

(8

)

 

 

(8

)

 

 

(8

)

 

 

(8

)

Tax and noncontrolling interests impact of above items

 

 

(510

)

 

 

(530

)

 

 

(500

)

 

 

(525

)

Adjusted net income available from continuing operations to common shareholders

 

$

130

 

 

$

170

 

 

$

605

 

 

$

725

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$

16.59

 

 

$

17.83

 

 

$

20.69

 

 

$

23.02

 

Less:

 

 

 

 

 

 

 

 

Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements

 

 

(0.19

)

 

 

(0.10

)

 

 

(0.71

)

 

 

(0.23

)

Net gains on sales, consolidation and deconsolidation of facilities

 

 

20.48

 

 

 

21.43

 

 

 

20.48

 

 

 

21.43

 

Loss from early extinguishment of debt

 

 

(0.08

)

 

 

(0.08

)

 

 

(0.08

)

 

 

(0.08

)

Tax and noncontrolling interests impact of above items

 

 

(4.86

)

 

 

(5.04

)

 

 

(4.76

)

 

 

(5.00

)

Adjusted diluted earnings per share from continuing operations

 

$

1.24

 

 

$

1.62

 

 

$

5.76

 

 

$

6.90

 

 

 

 

 

 

 

 

 

 

Weighted average basic shares outstanding (in thousands)

 

 

102,000

 

 

 

102,000

 

 

 

102,000

 

 

 

102,000

 

Weighted average dilutive shares outstanding (in thousands)

 

 

105,000

 

 

 

105,000

 

 

 

105,000

 

 

 

105,000

 

 

 

 

 

 

 

 

 

 

(1)

The figures shown represent the Company's estimate for restructuring charges. The Company does not generally forecast impairment charges, acquisition-related costs, and litigation costs and settlements because it 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.

(2)

The Company does not generally forecast losses from the early extinguishment of debt because the Company does not believe that it can forecast this item with sufficient accuracy since it is indeterminable at the time the Company provides its financial Outlook. The figures shown relate to debt expected to be repurchased by the Company with sale proceeds in 2024.

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #5 – Reconciliations of Outlook Net Income Available to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted EBITDA

(Unaudited)

 

 

 

First Quarter 2024

 

FY 2024

(Dollars in millions)

 

Low

 

High

 

Low

 

High

Net income available to Tenet Healthcare Corporation common shareholders

 

$

1,742

 

 

$

1,872

 

 

$

2,172

 

 

$

2,417

 

Less:

 

 

 

 

 

 

 

 

Net income available to noncontrolling interests

 

 

(160

)

 

 

(170

)

 

 

(735

)

 

 

(785

)

Income tax expense

 

 

(590

)

 

 

(620

)

 

 

(840

)

 

 

(885

)

Interest expense

 

 

(230

)

 

 

(220

)

 

 

(835

)

 

 

(825

)

Loss from early extinguishment of debt(2)

 

 

(8

)

 

 

(8

)

 

 

(8

)

 

 

(8

)

Other non-operating income, net

 

 

10

 

 

 

20

 

 

 

70

 

 

 

80

 

Net gains on sales, consolidation and deconsolidation of facilities

 

 

2,150

 

 

 

2,250

 

 

 

2,150

 

 

 

2,250

 

Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1)

 

 

(20

)

 

 

(10

)

 

 

(75

)

 

 

(25

)

Depreciation and amortization

 

 

(210

)

 

 

(220

)

 

 

(840

)

 

 

(870

)

Adjusted EBITDA

 

$

800

 

 

$

850

 

 

$

3,285

 

 

$

3,485

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1,742

 

 

$

1,872

 

 

$

2,172

 

 

$

2,417

 

Net operating revenues

 

$

5,000

 

 

$

5,200

 

 

$

19,900

 

 

$

20,300

 

Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues

 

 

34.8

%

 

 

36.0

%

 

 

10.9

%

 

 

11.9

%

Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)

 

 

16.0

%

 

 

16.3

%

 

 

16.5

%

 

 

17.2

%

 

 

 

 

 

 

 

 

 

(1)

The figures shown represent the Company's estimate for restructuring charges. The Company does not generally forecast impairment charges, acquisition-related costs, and litigation costs and settlements because it 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.

(2)

The Company does not generally forecast losses from the early extinguishment of debt because the Company does not believe that it can forecast this item with sufficient accuracy since it is indeterminable at the time the Company provides its financial Outlook. The figures shown relate to debt expected to be repurchased by the Company with sale proceeds in 2024.

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP disclosures

Table #6 – Reconciliations of Outlook Net Cash Provided by Operating Activities to Outlook Free Cash Flow Continuing Operations and Outlook Adjusted Free Cash Flow Continuing Operations

(Unaudited)

 

(Dollars in millions)

 

FY 2024

 

 

Low

 

High

Net cash provided by operating activities

 

$

1,650

 

 

$

2,000

 

Purchases of property and equipment

 

 

(775

)

 

 

(875

)

Free cash flow – continuing operations

 

$

875

 

 

$

1,125

 

 

 

 

 

 

Net cash provided by operating activities

 

$

1,650

 

 

$

2,000

 

Less:

 

 

 

 

Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1)

 

 

(75

)

 

 

(25

)

Adjusted net cash provided by operating activities – continuing operations

 

 

1,725

 

 

 

2,025

 

Purchases of property and equipment

 

 

(775

)

 

 

(875

)

Adjusted free cash flow – continuing operations(2)

 

$

950

 

 

$

1,150

 

 

 

 

 

 

(1)

The figures shown represent the Company's estimate for restructuring payments. The Company does not generally forecast payments for acquisition-related costs, and litigation costs and settlements because it 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.

(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, and (ii) distributions paid to noncontrolling interests.

 

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