Tenet Reports Results for the Second Quarter Ended June 30, 2019

Tenet reported net income from continuing operations attributable to Tenet common shareholders of $15 million or $0.14 per diluted share in the second quarter of 2019 compared to $24 million or $0.23 per diluted share in the second quarter of 2018.
Adjusted diluted earnings per share from continuing operations were $0.56 in the second quarter of 2019, above the midpoint of the Company’s Outlook and compared to $0.49 in the second quarter of 2018.
Adjusted EBITDA for the second quarter of 2019 was $657 million, which was above the midpoint of the Company’s Outlook. Adjusted EBITDA consisted of $347 million in the Hospital Operations and other segment, $207 million in the Ambulatory Care segment and $103 million in the Conifer segment.
Hospital segment same-hospital net patient service revenues grew 5.7 percent in the second quarter of 2019: admissions increased 3.3 percent, adjusted admissions increased 2.2 percent and net revenue per adjusted admission increased 3.4 percent.
Ambulatory Care segment same-facility system-wide surgical revenue grew 5.2 percent in the second quarter of 2019, with surgical cases up 2.6 percent and surgical revenue per case up 2.5 percent. Adjusted EBITDA less facility-level noncontrolling interest increased 9.1 percent.
Conifer’s Adjusted EBITDA grew 13.2 percent and margins increased 540 basis points to 29.0 percent reflecting ongoing improvements in its cost structure. Conifer’s revenues decreased 8.0 percent in the second quarter of 2019 primarily as a result of divestitures by Tenet and other customers.
Updating 2019 Outlook for net income and earnings per share; reiterating previously provided 2019 Outlook for revenue, Adjusted EBITDA, Adjusted EPS and Adjusted Free Cash Flow.

August 05, 2019 04:15 PM Eastern Daylight Time

DALLAS--(BUSINESS WIRE)--Tenet Healthcare Corporation (NYSE: THC) reported net income from continuing operations attributable to Tenet common shareholders of $15 million in the second quarter of 2019 compared to net income of $24 million in the second quarter of 2018. Adjusted EBITDA was $657 million in the second quarter of 2019 above the midpoint of the Company’s Outlook range of $625 million to $675 million.

Ronald A. Rittenmeyer, Executive Chairman and CEO, said, “We delivered another strong quarter which included a very meaningful improvement in volume growth in our hospital portfolio, continued volume and earnings growth at USPI and strong financial results at Conifer. We are continuing to take appropriate actions to improve our cost structure and our focus on improving volume growth is showing results.”

Results for the Quarter Ended June 30, 2019

Tenet reported net income from continuing operations attributable to Tenet common shareholders of $15 million, or $0.14 per diluted share, in the second quarter of 2019 compared to net income of $24 million, or $0.23 per diluted share, in the second quarter of 2018.

After adjusting for the items listed on Table #2, Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $59 million, or $0.56 per diluted share, in the second quarter of 2019, compared to $51 million, or $0.49 per diluted share, in the second quarter of 2018.

Adjusted EBITDA was $657 million in the second quarter of 2019 compared to $634 million in the second quarter of 2018, an increase of 3.6 percent. Results in the second quarter of 2019 included $13 million of additional expense in the Hospital Operations and other segment due to a decline in the treasury rate utilized to discount our actuarial liabilities compared to a $4 million benefit in the second quarter of 2018.

Reconciliations of GAAP net income available (loss attributable) to Tenet common shareholders to Adjusted net income available (loss attributable) from continuing operations, Adjusted diluted earnings (loss) per share from continuing operations and Adjusted EBITDA are contained in Tables #1 and #2 at the end of this release.

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $3.827 billion in the second quarter of 2019, up 2.5 percent from the second quarter of 2018. The increase in revenue was primarily due to revenue growth on a same-hospital basis, partially offset by hospital divestitures.

On a same-hospital basis, net patient service revenues were $3.547 billion in the second quarter of 2019, up 5.7 percent from the second quarter of 2018. Admissions increased 3.3 percent on a same-hospital basis, adjusted admissions increased 2.2 percent and revenue per adjusted admission increased 3.4 percent.

Adjusted EBITDA in Tenet’s hospital segment was $347 million in the second quarter of 2019 compared to $345 million in the second quarter of 2018.

Selected operating expenses in the Hospital Operations and other segment increased 3.5 percent on a per adjusted admission basis in the second quarter of 2019. Selected operating expenses include salaries, wages and benefits, supplies and other operating expenses and exclude the costs of the Company’s health plan businesses. Salaries, wages and benefits increased 3.4 percent per adjusted admission in the second quarter of 2019, supply expense increased 1.2 percent and other operating expenses increased 5.3 percent.

Ambulatory Care Segment

The Ambulatory Care segment produced net operating revenues of $524 million in the second quarter of 2019, a decrease of 1.3 percent compared to $531 million in the second quarter of 2018. The decline in revenue was due to the divestiture of Aspen Healthcare, the Company’s former business in the U.K. that was sold in the third quarter of 2018. Aspen generated $47 million of revenue and $7 million of Adjusted EBITDA and Adjusted EBITDA less facility-level noncontrolling interest in the second quarter of 2018. After normalizing for the divestiture of Aspen, the Ambulatory Care segment generated Adjusted EBITDA of $207 million in the second quarter of 2019, up 8.4 percent from $191 million in the second quarter of 2018 and Adjusted EBITDA less facility-level noncontrolling interest was $132 million, up 9.1 percent from $121 million in the second quarter of 2018.

The results of many of the facilities in which the Ambulatory Care segment has an investment are not consolidated by Tenet (of the 344 facilities at June 30, 2019, the results of 112 were accounted for under the equity method for unconsolidated affiliates). 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 Care segment increased 5.3 percent in the second quarter of 2019, with cases increasing 3.2 percent and revenue per case increasing 2.0 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 5.2 percent in the second quarter of 2019, with cases up 2.6 percent and revenue per case up 2.5 percent.

Conifer Segment

Conifer generated $103 million of Adjusted EBITDA in the second quarter of 2019, up 13.2 percent from $91 million in the second quarter of 2018. Adjusted EBITDA margins increased 540 basis points to 29.0 percent, reflecting ongoing improvements in Conifer’s cost structure as well as $13 million of annual service performance incentive revenues from customers that were recognized in the second quarter of 2019.

During the second quarter of 2019, Conifer’s revenue declined 8.0 percent to $355 million, from $386 million in the second quarter of 2018, primarily due to client attrition following divestitures by Tenet and other customers. Revenue from third-party customers declined 13.6 percent to $209 million in the second quarter of 2019.

Results for the Six Months Ended June 30, 2019

Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $12 million, or $0.12 per diluted share, in the first half of 2019 compared to net income of $122 million, or $1.18 per diluted share, in the first half of 2018. The 2019 period included a $47 million pre-tax loss from the extinguishment of debt or $0.45 per diluted share. The 2018 period included a $118 million pre-tax gain, or $1.15 per diluted share, from the sales, consolidation and deconsolidation of facilities.

After adjusting for the items listed on Table #2, Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $115 million, or $1.10 per diluted share, in the first half of 2019, compared to $110 million, or $1.06 per diluted share, in the first half of 2018.

Adjusted EBITDA was $1.270 billion in the first half of 2019 compared to $1.299 billion in the first half of 2018, a decline of $29 million or 2.2 percent. The decline was primarily attributable to: (i) a $37 million year-over-year increase in expense due to a decline in the treasury rate used to discount the Company’s actuarial liabilities; (ii) $15 million of lower earnings related to a risk-based contracting business in California; and, (iii) the divestiture of Aspen Healthcare, which generated $14 million of Adjusted EBITDA in the first half of 2018.

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $7.689 billion in the first half of 2019, essentially flat with the first half of 2018.

On a same-hospital basis, net patient service revenues were $7.104 billion in the first half of 2019, up 3.7 percent from the first half of 2018. Admissions increased 1.6 percent on a same-hospital basis in the first half of 2019, adjusted admissions increased 1.4 percent and revenue per adjusted admission increased 2.3 percent.

Adjusted EBITDA in Tenet’s hospital segment was $684 million in the first half of 2019 compared to $747 million in the first half of 2018. The $63 million decline was primarily due to: (i) a $37 million year-over-year increase in expense due to a decline in the treasury rate used to discount the Company’s actuarial liabilities; and, (ii) $15 million of lower earnings related to a risk-based contracting business in California.

Selected operating expenses in the Hospital Operations and other segment increased 3.7 percent on a per adjusted admission basis in the first half of 2019. Selected operating expenses include salaries, wages and benefits, supplies and other operating expenses and exclude the costs of the Company’s health plan businesses. Salaries, wages and benefits increased 3.1 percent per adjusted admission in the first half of 2019, supply expense increased 0.6 percent and other operating expenses increased 7.3 percent.

Ambulatory Care Segment

The Ambulatory Care segment produced net operating revenues of $1.004 billion in the first half of 2019, a decrease of 2.4 percent compared to $1.029 billion in the first half of 2018. The decline in revenue was due to the divestiture of Aspen Healthcare, the Company’s former business in the U.K. that was sold in the third quarter of 2018. Aspen generated $96 million of revenue and $14 million of Adjusted EBITDA and Adjusted EBITDA less facility-level noncontrolling interest in the first half of 2018. After normalizing for the divestiture of Aspen, the Ambulatory Care segment generated Adjusted EBITDA of $384 million in the first half of 2019, up 10.0 percent from $349 million in the first half of 2018 and Adjusted EBITDA less facility-level noncontrolling interest was $244 million, up 9.4 percent from $223 million in the first half of 2018.

On a same-facility system-wide basis, revenue in the Ambulatory Care segment increased 4.8 percent in the first half of 2019, with cases increasing 2.1 percent and revenue per case increasing 2.7 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 4.7 percent in the first half of 2019, with cases up 2.7 percent and revenue per case up 2.0 percent.

Conifer Segment

Conifer generated $202 million of Adjusted EBITDA in the first half of 2019, up 6.9 percent from $189 million in the first half of 2018. Adjusted EBITDA margins increased 480 basis points to 28.7 percent, reflecting ongoing improvements in Conifer’s cost structure.

During the first half of 2019, Conifer’s revenue declined 10.9 percent to $704 million, from $790 million in the first half of 2018 primarily due to client attrition following divestitures by Tenet and other customers. Revenue from third-party customers declined 16.9 percent to $412 million in the first half of 2019.

Cash Flow and Liquidity

Cash and cash equivalents were $249 million at June 30, 2019 compared to $252 million at March 31, 2019. The Company had $190 million of outstanding borrowings on its $1 billion credit line as of June 30, 2019. Accounts receivable days outstanding from continuing operations were 58.4 at June 30, 2019 compared to 58.6 at March 31, 2019.

Net cash provided by operating activities was $294 million in the first half of 2019, representing a $167 million decrease compared to $461 million in the first half of 2018. After subtracting $336 million and $268 million of capital expenditures in the first half of 2019 and 2018, respectively, Free Cash Flow was an outflow of $42 million in the first half of 2019, a decrease of $235 million compared to Free Cash Flow of $193 million in the first half of 2018. Adjusted Free Cash Flow was $43 million in the first half of 2019, representing a $216 million decrease from $259 million of Adjusted Free Cash Flow in the first half of 2018.

Net cash used in investing activities was $303 million in the first half of 2019 compared to $225 million of net cash provided by investing activities in the first half of 2018. Results in the first half of 2019 included $66 million of proceeds from the sales of facilities, long-term investments and other assets compared to $624 million in the first half of 2018.

Net cash used in financing activities was $153 million in the first half of 2019 compared to $894 million used in the first half of 2018 when the Company invested $630 million in cash to increase its ownership in USPI from 80% to 95%.

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 Outlook for 2019 includes:

Revenue of $18.0 billion to $18.4 billion,
Net income from continuing operations available to Tenet common shareholders of $16 million to $116 million,
Adjusted EBITDA of $2.650 billion to $2.750 billion,
Net cash provided by operating activities of $1.070 billion to $1.375 billion,
Adjusted Free Cash Flow of $600 million to $800 million,
Diluted earnings per share from continuing operations of $0.15 to $1.09, and
Adjusted diluted earnings per share from continuing operations of $2.08 to $2.59.

The Outlook for 2019 assumes California Provider Fee revenues of approximately $260 million, equity in earnings of unconsolidated affiliates of $180 million to $190 million, depreciation and amortization expense of $820 million to $840 million, interest expense of $985 million to $995 million, net income available to noncontrolling interests of $410 million to $430 million and an average diluted share count of 106 million.

The Company’s Outlook for the third quarter of 2019 includes:

Revenue of $4.300 billion to $4.600 billion,
Net income available (loss attributable) from continuing operations to Tenet common shareholders ranging from a loss of $(16) million to income of $21 million,
Adjusted EBITDA of $600 million to $650 million,
Diluted earnings (loss) per share from continuing operations ranging from a loss of $(0.15) per share to earnings of $0.20 per share, and
Adjusted diluted earnings per share from continuing operations ranging from $0.23 to $0.48.

The Outlook for the third quarter assumes California Provider Fee revenues of approximately $65 million, equity in earnings of unconsolidated affiliates of $40 million to $45 million, depreciation and amortization expense of $200 million to $210 million, interest expense of $240 million to $250 million, net income available to noncontrolling interests of $95 million to $105 million, and an average diluted share count of 106 million.

Additional details on Tenet’s Outlook for both the third quarter and calendar year 2019 are available in Tables #4, #5 and #6 at the end of this press release and in an accompanying slide presentation that will be accessible through the Company’s website at www.tenethealth.com/investors.

Management’s Webcast Discussion of Second Quarter Results

Tenet management will discuss the Company’s second quarter 2019 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on August 6, 2019. 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, will be available on the Company’s website.

Additional information regarding Tenet’s quarterly results of operations is contained in its Form 10-Q report for the period ended June 30, 2019, which will be filed with the Securities and Exchange Commission and posted on the Company’s website.

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

Tenet Healthcare Corporation (NYSE: THC) is a national diversified healthcare services company headquartered in Dallas with 110,000 employees. Through an expansive care network that includes United Surgical Partners International, we operate 65 hospitals and approximately 500 other healthcare facilities, including surgical hospitals, ambulatory surgery centers, urgent care and imaging centers and other outpatient facilities. We also operate Conifer Health Solutions, which provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other customers. At the center of everything we do is a commitment to deliver the right care, in the right place, at the right time, and to continually improve and advance the healthcare delivery system in the markets we serve. For more information, please visit www.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,” “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 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, 2018, and subsequent Form 10-Q filings and other filings with the Securities and Exchange Commission.


TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


(Dollars in millions except per share amounts)	Three Months Ended June 30,
	2019			%		2018			%		Change
Net operating revenues	$	4,560		100.0	%	$	4,506		100.0	%	1.2	%
Equity in earnings of unconsolidated affiliates	42			0.9	%	39			0.9	%	7.7	%
Operating expenses:
Salaries, wages and benefits	2,148			47.1	%	2,135			47.4	%	0.6	%
Supplies	753			16.5	%	748			16.6	%	0.7	%
Other operating expenses, net	1,044			22.9	%	1,027			22.8	%	1.7	%
Electronic health record incentives	—			—	%	—			—	%	—	%
Depreciation and amortization	214			4.7	%	194			4.3	%
Impairment and restructuring charges, and acquisition-related costs	36			0.8	%	30			0.7	%
Litigation and investigation costs	18			0.4	%	13			0.3	%
Net losses (gains) on sales, consolidation and deconsolidation of facilities	1			—	%	(8		)	(0.2	)%
Operating income	388			8.5	%	406			9.0	%
Interest expense	(247		)			(254		)
Other non-operating expense, net	(1		)			(1		)
Loss from early extinguishment of debt	—					(1		)
Income from continuing operations, before income taxes	140					150
Income tax expense	(30		)			(44		)
Income from continuing operations, before discontinued operations	110					106
Discontinued operations:
Income from operations	2					2
Income tax expense	—					—
Income from discontinued operations	2					2
Net income	112					108
Less: Net income available to noncontrolling interests	95					82
Net income available to Tenet Healthcare Corporation common shareholders	$	17				$	26
Amounts available to Tenet Healthcare Corporation common shareholders
Income from continuing operations, net of tax	$	15				$	24
Income from discontinued operations, net of tax	2					2
Net income available to Tenet Healthcare Corporation common shareholders	$	17				$	26
Earnings per share available to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	0.15				$	0.23
Discontinued operations	0.02					0.02
	$	0.17				$	0.25
Diluted
Continuing operations	$	0.14				$	0.23
Discontinued operations	0.02					0.02
	$	0.16				$	0.25
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	103,198					102,147
Diluted*	104,629					104,177


TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


(Dollars in millions except per share amounts)	Six Months Ended June 30,
	2019			%		2018			%		Change
Net operating revenues	$	9,105		100.0	%	$	9,205		100.0	%	(1.1	)%
Equity in earnings of unconsolidated affiliates	76			0.8	%	64			0.7	%	18.8	%
Operating expenses:
Salaries, wages and benefits	4,301			47.3	%	4,362			47.5	%	(1.4	)%
Supplies	1,494			16.4	%	1,522			16.5	%	(1.8	)%
Other operating expenses, net	2,118			23.3	%	2,087			22.7	%	1.5	%
Electronic health record incentives	(1		)	—	%	(1		)	—	%	—	%
Depreciation and amortization	422			4.6	%	398			4.3	%
Impairment and restructuring charges, and acquisition-related costs	55			0.6	%	77			0.8	%
Litigation and investigation costs	31			0.3	%	19			0.2	%
Net losses (gains) on sales, consolidation and deconsolidation of facilities	2			—	%	(118		)	(1.3	)%
Operating income	759			8.3	%	923			10.0	%
Interest expense	(498		)			(509		)
Other non-operating expense, net	—					(2		)
Loss from early extinguishment of debt	(47		)			(2		)
Income from continuing operations, before income taxes	214					410
Income tax expense	(47		)			(114		)
Income from continuing operations, before discontinued operations	167					296
Discontinued operations:
Income from operations	12					3
Income tax expense	(2		)			—
Income from discontinued operations	10					3
Net income	177					299
Less: Net income available to noncontrolling interests	179					174
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(2	)			$	125
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax	$	(12	)			$	122
Income from discontinued operations, net of tax	10					3
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(2	)			$	125
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	(0.12	)			$	1.20
Discontinued operations	0.10					0.03
	$	(0.02	)			$	1.23
Diluted
Continuing operations	$	(0.12	)			$	1.18
Discontinued operations	0.10					0.03
	$	(0.02	)			$	1.21
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	102,993					101,770
Diluted*	102,993					103,416

Had we generated income from continuing operations available to common shareholders in the six months ended June 30, 2019 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,592 thousand shares.


TENET HEALTHCARE CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)


	June 30,			December 31,
(Dollars in millions)	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	249		$	411
Accounts receivable		2,734			2,595
Inventories of supplies, at cost		309			305
Income tax receivable		19			21
Assets held for sale		—			107
Other current assets		1,393			1,197
Total current assets		4,704			4,636
Investments and other assets		2,297			1,456
Deferred income taxes		268			312
Property and equipment, at cost, less accumulated depreciation and amortization		6,995			6,993
Goodwill		7,298			7,281
Other intangible assets, at cost, less accumulated amortization		1,645			1,731
Total assets	$	23,207		$	22,409

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	664		$	182
Accounts payable		1,088			1,207
Accrued compensation and benefits		720			838
Professional and general liability reserves		228			216
Accrued interest payable		233			240
Liabilities held for sale		—			43
Other current liabilities		1,217			1,131
Total current liabilities		4,150			3,857
Long-term debt, net of current portion		14,312			14,644
Professional and general liability reserves		669			666
Defined benefit plan obligations		507			521
Deferred income taxes		36			36
Other long-term liabilities		1,354			578
Total liabilities		21,028			20,302
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries		1,462			1,420
Equity:
Shareholders’ equity:
Common stock		7			7
Additional paid-in capital		4,755			4,747
Accumulated other comprehensive loss		(219	)		(223	)
Accumulated deficit		(2,237	)		(2,236	)
Common stock in treasury, at cost		(2,414	)		(2,414	)
Total shareholders’ deficit		(108	)		(119	)
Noncontrolling interests		825			806
Total equity		717			687
Total liabilities and equity	$	23,207		$	22,409


TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Six Months Ended
(Dollars in millions)	June 30,
	2019			2018
Net income	$	177		$	299
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	422			398
Deferred income tax expense	42			108
Stock-based compensation expense	23			20
Impairment and restructuring charges, and acquisition-related costs	55			77
Litigation and investigation costs	31			19
Net losses (gains) on sales, consolidation and deconsolidation of facilities	2			(118		)
Loss from early extinguishment of debt	47			2
Equity in earnings of unconsolidated affiliates, net of distributions received	(2		)	10
Amortization of debt discount and debt issuance costs	21			22
Pre-tax income from discontinued operations	(12		)	(3		)
Other items, net	(10		)	(1		)
Changes in cash from operating assets and liabilities:
Accounts receivable	(138		)	(13		)
Inventories and other current assets	(64		)	144
Income taxes	(2		)	(18		)
Accounts payable, accrued expenses and other current liabilities	(217		)	(371		)
Other long-term liabilities	4			(48		)
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements	(80		)	(63		)
Net cash used in operating activities from discontinued operations, excluding income taxes	(5		)	(3		)
Net cash provided by operating activities	294			461
Cash flows from investing activities:
Purchases of property and equipment — continuing operations	(336		)	(268		)
Purchases of businesses or joint venture interests, net of cash acquired	(13		)	(89		)
Proceeds from sales of facilities and other assets — continuing operations	40			481
Proceeds from sales of facilities and other assets — discontinued operations	17			—
Proceeds from sales of marketable securities, long-term investments and other assets	9			143
Purchases of equity investments	(9		)	(37		)
Other long-term assets	(4		)	3
Other items, net	(7		)	(8		)
Net cash provided by (used in) investing activities	(303		)	225
Cash flows from financing activities:
Repayments of borrowings under credit facility	(1,095		)	(360		)
Proceeds from borrowings under credit facility	1,285			360
Repayments of other borrowings	(1,668		)	(161		)
Proceeds from other borrowings	1,516			14
Debt issuance costs	(18		)	—
Distributions paid to noncontrolling interests	(144		)	(140		)
Proceeds from sales of noncontrolling interests	9			7
Purchases of noncontrolling interests	(6		)	(642		)
Proceeds from exercise of stock options and employee stock purchase plan	3			14
Other items, net	(35		)	14
Net cash used in financing activities	(153		)	(894		)
Net decrease in cash and cash equivalents	(162		)	(208		)
Cash and cash equivalents at beginning of period	411			611
Cash and cash equivalents at end of period	$	249		$	403
Supplemental disclosures:
Interest paid, net of capitalized interest	$	(484	)	$	(501	)
Income tax payments, net	$	(13	)	$	(21	)


TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS⁽¹⁾ (Unaudited)


(Dollars in millions except per adjusted patient day	Three Months Ended June 30,									Six Months Ended June 30,
and per adjusted patient admission amounts)	2019			2018			Change			2019			2018			Change

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	65			68			(3	)	*	65			68			(3	)	*
Total admissions	169,352			168,453			0.5	%		344,078			350,759			(1.9	)%
Adjusted patient admissions	304,066			306,063			(0.7	)%		612,199			626,931			(2.3	)%
Paying admissions (excludes charity and uninsured)	159,128			158,216			0.6	%		323,921			330,706			(2.1	)%
Charity and uninsured admissions	10,224			10,237			(0.1	)%		20,157			20,053			0.5	%
Admissions through emergency department	121,088			115,036			5.3	%		247,167			240,112			2.9	%
Paying admissions as a percentage of total admissions	94.0		%	93.9		%	0.1	%	*	94.1		%	94.3		%	(0.2	)%	*
Charity and uninsured admissions as a percentage of total admissions	6.0		%	6.1		%	(0.1	)%	*	5.9		%	5.7		%	0.2	%	*
Emergency department admissions as a percentage of total admissions	71.5		%	68.3		%	3.2	%	*	71.8		%	68.5		%	3.3	%	*
Surgeries — inpatient	44,641			46,274			(3.5	)%		89,436			93,497			(4.3	)%
Surgeries — outpatient	60,936			63,805			(4.5	)%		119,154			126,813			(6.0	)%
Total surgeries	105,577			110,079			(4.1	)%		208,590			220,310			(5.3	)%
Patient days — total	787,582			766,519			2.7	%		1,609,661			1,625,167			(1.0	)%
Adjusted patient days	1,387,929			1,373,480			1.1	%		2,808,099			2,859,619			(1.8	)%
Average length of stay (days)	4.65			4.55			2.2	%		4.68			4.63			1.1	%
Licensed beds (at end of period)	17,221			18,314			(6.0	)%		17,221			18,314			(6.0	)%
Average licensed beds	17,221			18,362			(6.2	)%		17,338			18,523			(6.4	)%
Utilization of licensed beds	50.3		%	45.9		%	4.4	%	*	51.3		%	48.5		%	2.8	%	*
Outpatient Visits
Total visits	1,693,805			1,749,847			(3.2	)%		3,408,197			3,592,386			(5.1	)%
Paying visits (excludes charity and uninsured)	1,581,530			1,633,372			(3.2	)%		3,185,242			3,359,348			(5.2	)%
Charity and uninsured visits	112,275			116,475			(3.6	)%		222,955			233,038			(4.3	)%
Emergency department visits	637,107			643,036			(0.9	)%		1,294,556			1,340,037			(3.4	)%
Paying visits as a percentage of total visits	93.4		%	93.3		%	0.1	%	*	93.5		%	93.5		%	—	%	*
Charity and uninsured visits as a percentage of total visits	6.6		%	6.7		%	(0.1	)%	*	6.5		%	6.5		%	—	%	*
Total emergency department admissions and visits	758,195			758,072			—	%		1,541,723			1,580,149			(2.4	)%
Revenues
Net patient service revenues⁽³⁾	$	3,547		$	3,443		3.0	%		$	7,129		$	7,086		0.6	%
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient service revenue⁽³⁾ per adjusted patient admission	$	11,665		$	11,249		3.7	%		$	11,645		$	11,303		3.0	%
Net patient service revenue⁽³⁾ per adjusted patient day	$	2,556		$	2,507		2.0	%		$	2,539		$	2,478		2.5	%
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission⁽²⁾	$	10,988		$	10,619		3.5	%		$	10,983		$	10,590		3.7	%
Net patient service revenues⁽³⁾ from:
Medicare	20.3		%	20.4		%	(0.1	)%	*	20.7		%	20.9		%	(0.2	)%	*
Medicaid	8.9		%	9.1		%	(0.2	)%	*	8.9		%	9.0		%	(0.1	)%	*
Managed care	65.7		%	66.0		%	(0.3	)%	*	65.7		%	65.5		%	0.2	%	*
Uninsured	0.3		%	0.2		%	0.1	%	*	0.2		%	0.6		%	(0.4	)%	*
Indemnity and other	4.8		%	4.3		%	0.5	%	*	4.5		%	4.0		%	0.5	%	*

(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.
(3)	Less implicit price concessions.
*	This change is the difference between the 2019 and 2018 amounts shown.


TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS⁽¹⁾ (Unaudited)


(Dollars in millions except per adjusted patient day	Three Months Ended June 30,								Six Months Ended June 30,
and per adjusted patient admission amounts)	2019			2018			Change		2019			2018			Change

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	65			65			—		65			65			—		*
Total admissions	169,352			163,903			3.3	%	342,822			337,587			1.6	%
Adjusted patient admissions	304,066			297,460			2.2	%	609,937			601,605			1.4	%
Paying admissions (excludes charity and uninsured)	159,129			153,816			3.5	%	322,761			318,055			1.5	%
Charity and uninsured admissions	10,223			10,087			1.3	%	20,061			19,532			2.7	%
Admissions through emergency department	121,088			111,902			8.2	%	246,316			231,859			6.2	%
Paying admissions as a percentage of total admissions	94.0		%	93.8		%	0.2	%	94.1		%	94.2		%	(0.1	)%	*
Charity and uninsured admissions as a percentage of total admissions	6.0		%	6.2		%	(0.2	)%	5.9		%	5.8		%	0.1	%	*
Emergency department admissions as a percentage of total admissions	71.5		%	68.3		%	3.2	%	71.8		%	68.7		%	3.1	%	*
Surgeries — inpatient	44,641			45,191			(1.2	)%	89,194			90,243			(1.2	)%
Surgeries — outpatient	60,936			62,205			(2.0	)%	118,832			121,925			(2.5	)%
Total surgeries	105,577			107,396			(1.7	)%	208,026			212,168			(2.0	)%
Patient days — total	787,582			743,442			5.9	%	1,602,911			1,560,442			2.7	%
Adjusted patient days	1,387,929			1,329,915			4.4	%	2,795,982			2,735,483			2.2	%
Average length of stay (days)	4.65			4.54			2.4	%	4.68			4.62			1.3	%
Licensed beds (at end of period)	17,221			17,246			(0.1	)%	17,221			17,246			(0.1	)%
Average licensed beds	17,221			17,246			(0.1	)%	17,221			17,246			(0.1	)%
Utilization of licensed beds	50.3		%	47.4		%	2.9	%	51.4		%	50.0		%	1.4	%	*
Outpatient Visits
Total visits	1,693,805			1,673,056			1.2	%	3,380,669			3,389,952			(0.3	)%
Paying visits (excludes charity and uninsured)	1,581,555			1,560,950			1.3	%	3,159,190			3,168,144			(0.3	)%
Charity and uninsured visits	112,250			112,106			0.1	%	221,479			221,808			(0.1	)%
Emergency department visits	637,107			622,898			2.3	%	1,288,959			1,286,620			0.2	%
Paying visits as a percentage of total visits	93.4		%	93.3		%	0.1	%	93.4		%	93.5		%	(0.1	)%	*
Charity and uninsured visits as a percentage of total visits	6.6		%	6.7		%	(0.1	)%	6.6		%	6.5		%	0.1	%	*
Total emergency department admissions and visits	758,195			734,800			3.2	%	1,535,275			1,518,479			2.8	%
Revenues
Net patient service revenues⁽²⁾	$	3,547		$	3,357		5.7	%	$	7,104		$	6,850		3.7	%
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient service revenue⁽²⁾ per adjusted patient admission	$	11,665		$	11,286		3.4	%	$	11,647		$	11,386		2.3	%
Net patient service revenue⁽²⁾per adjusted patient day	$	2,556		$	2,524		1.3	%	$	2,541		$	2,504		1.5	%
Net patient service revenues⁽²⁾from:
Medicare	20.3		%	20.1		%	0.2	%	20.6		%	20.5		%	0.1	%	*
Medicaid	8.9		%	8.9		%	—	%	8.9		%	8.8		%	0.1	%	*
Managed care	65.7		%	66.4		%	(0.7	)%	65.8		%	65.8		%	—	%	*
Uninsured	0.3		%	0.2		%	0.1	%	0.2		%	0.8		%	(0.6	)%	*
Indemnity and other	4.8		%	4.4		%	0.4	%	4.5		%	4.1		%	0.4	%	*

(1)	Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the six months ended June 30, 2019 and 2018 and associated outpatient facilities, but excludes the results of hospitals Tenet divested since January 1, 2018.
(2)	Less implicit price concessions.
*	This change is the difference between the 2019 and 2018 amounts shown.


TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


(Dollars in millions except per share amounts)	Three Months Ended						Six Months Ended
	3/31/2019			6/30/2019			6/30/2019
Net operating revenues	$	4,545		$	4,560		$	9,105
Equity in earnings of unconsolidated affiliates	34			42			76
Operating expenses:
Salaries, wages and benefits	2,153			2,148			4,301
Supplies	741			753			1,494
Other operating expenses, net	1,074			1,044			2,118
Electronic health record incentives	(1		)	—			(1		)
Depreciation and amortization	208			214			422
Impairment and restructuring charges, and acquisition-related costs	19			36			55
Litigation and investigation costs	13			18			31
Net losses on sales, consolidation and deconsolidation of facilities	1			1			2
Operating income	371			388			759
Interest expense	(251		)	(247		)	(498		)
Other non-operating income (expense), net	1			(1		)	—
Loss from early extinguishment of debt	(47		)	—			(47		)
Income from continuing operations, before income taxes	74			140			214
Income tax expense	(17		)	(30		)	(47		)
Income from continuing operations, before discontinued operations	57			110			167
Discontinued operations:
Income from operations	10			2			12
Income tax expense	(2		)	—			(2		)
Income from discontinued operations	8			2			10
Net income	65			112			177
Less: Net income available to noncontrolling interests	84			95			179
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(19	)	$	17		$	(2	)
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax	$	(27	)	$	15		$	(12	)
Income from discontinued operations, net of tax	8			2			10
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(19	)	$	17		$	(2	)
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	(0.26	)	$	0.15		$	(0.12	)
Discontinued operations	0.08			0.02			0.10
	$	(0.18	)	$	0.17		$	(0.02	)
Diluted
Continuing operations	$	(0.26	)	$	0.14		$	(0.12	)
Discontinued operations	0.08			0.02			0.10
	$	(0.18	)	$	0.16		$	(0.02	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	102,788			103,198			102,993
Diluted	102,788			104,629			102,993


TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


(Dollars in millions except per share amounts)	Three Months Ended												Year Ended
	3/31/2018			6/30/2018			9/30/2018			12/31/2018			12/31/2018
Net operating revenues	$	4,699		$	4,506		$	4,489		$	4,619		$	18,313
Equity in earnings of unconsolidated affiliates	25			39			33			53			150
Operating expenses:
Salaries, wages and benefits	2,227			2,135			2,116			2,156			8,634
Supplies	774			748			726			756			3,004
Other operating expenses, net	1,060			1,027			1,094			1,078			4,259
Electronic health record incentives	(1		)	—			—			(2		)	(3		)
Depreciation and amortization	204			194			204			200			802
Impairment and restructuring charges, and acquisition-related costs	47			30			46			86			209
Litigation and investigation costs	6			13			9			10			38
Net losses (gains) on sales, consolidation and deconsolidation of facilities	(110		)	(8		)	7			(16		)	(127		)
Operating income	517			406			320			404			1,647
Interest expense	(255		)	(254		)	(249		)	(246		)	(1,004		)
Other non-operating expense, net	(1		)	(1		)	—			(3		)	(5		)
Gain (loss) from early extinguishment of debt	(1		)	(1		)	—			3			1
Income from continuing operations, before income taxes	260			150			71			158			639
Income tax expense	(70		)	(44		)	(6		)	(56		)	(176		)
Income from continuing operations, before discontinued operations	190			106			65			102			463
Discontinued operations:
Income from operations	1			2			—			1			4
Income tax expense	—			—			—			(1		)	(1		)
Income from discontinued operations	1			2			—			—			3
Net income	191			108			65			102			466
Less: Net income available to noncontrolling interests	92			82			74			107			355
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	99		$	26		$	(9	)	$	(5	)	$	111
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax	$	98		$	24		$	(9	)	$	(5	)	$	108
Income from discontinued operations, net of tax	1			2			—			—			3
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	99		$	26		$	(9	)	$	(5	)	$	111
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	0.97		$	0.23		$	(0.09	)	$	(0.05	)	$	1.06
Discontinued operations	0.01			0.02			—			—			0.03
	$	0.98		$	0.25		$	(0.09	)	$	(0.05	)	$	1.09
Diluted
Continuing operations	$	0.95		$	0.23		$	(0.09	)	$	(0.05	)	$	1.04
Discontinued operations	0.01			0.02			—			—			0.03
	$	0.96		$	0.25		$	(0.09	)	$	(0.05	)	$	1.07
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	101,392			102,147			102,402			102,501			102,110
Diluted	102,656			104,177			102,402			102,501			103,881


TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS⁽¹⁾ (Unaudited)

(Dollars in millions except per adjusted patient day and per adjusted patient admission amounts)
	Three Months Ended						Six Months Ended
	3/31/2019			6/30/2019			06/30/2019

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	65			65			65
Total admissions	174,726			169,352			344,078
Adjusted patient admissions	308,133			304,066			612,199
Paying admissions (excludes charity and uninsured)	164,793			159,128			323,921
Charity and uninsured admissions	9,933			10,224			20,157
Admissions through emergency department	126,079			121,088			247,167
Paying admissions as a percentage of total admissions	94.3		%	94.0		%	94.1		%
Charity and uninsured admissions as a percentage of total admissions	5.7		%	6.0		%	5.9		%
Emergency department admissions as a percentage of total admissions	72.2		%	71.5		%	71.8		%
Surgeries — inpatient	44,795			44,641			89,436
Surgeries — outpatient	58,218			60,936			119,154
Total surgeries	103,013			105,577			208,590
Patient days — total	822,079			787,582			1,609,661
Adjusted patient days	1,420,170			1,387,929			2,808,099
Average length of stay (days)	4.70			4.65			4.68
Licensed beds (at end of period)	17,221			17,221			17,221
Average licensed beds	17,455			17,221			17,338
Utilization of licensed beds	52.3		%	50.3		%	51.3		%
Outpatient Visits
Total visits	1,714,392			1,693,805			3,408,197
Paying visits (excludes charity and uninsured)	1,603,712			1,581,530			3,185,242
Charity and uninsured visits	110,680			112,275			222,955
Emergency department visits	657,449			637,107			1,294,556
Paying visits as a percentage of total visits	93.5		%	93.4		%	93.5		%
Charity and uninsured visits as a percentage of total visits	6.5		%	6.6		%	6.5		%
Total emergency department admissions and visits	783,528			758,195			1,541,723
Revenues
Net patient service revenues⁽³⁾	$	3,582		$	3,547		$	7,129
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient service revenue⁽³⁾per adjusted patient admission	$	11,625		$	11,665		$	11,645
Net patient service revenue⁽³⁾ per adjusted patient day	$	2,522		$	2,556		$	2,539
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission⁽²⁾	$	10,979		$	10,988		$	10,983
Net patient service revenues⁽³⁾ from:
Medicare	21.2		%	20.3		%	20.7		%
Medicaid	8.8		%	8.9		%	8.9		%
Managed care	65.7		%	65.7		%	65.7		%
Uninsured	—		%	0.3		%	0.2		%
Indemnity and other	4.3		%	4.8		%	4.5		%

(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.
(3)	Less implicit price concessions.


TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS⁽¹⁾ (Unaudited)

(Dollars in millions except per adjusted patient day and per adjusted patient admission amounts)
	Three Months Ended												Year Ended
	3/31/2018			6/30/2018			9/30/2018			12/31/2018			12/31/2018

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	69			68			68			68			68
Total admissions	182,306			168,453			168,201			170,407			689,367
Adjusted patient admissions	320,868			306,063			306,197			308,113			1,241,241
Paying admissions (excludes charity and uninsured)	172,490			158,216			157,193			160,172			648,071
Charity and uninsured admissions	9,816			10,237			11,008			10,235			41,296
Admissions through emergency department	125,076			115,036			116,727			120,012			476,851
Paying admissions as a percentage of total admissions	94.6		%	93.9		%	93.5		%	94.0		%	94.0		%
Charity and uninsured admissions as a percentage of total admissions	5.4		%	6.1		%	6.5		%	6.0		%	6.0		%
Emergency department admissions as a percentage of total admissions	68.6		%	68.3		%	69.4		%	70.4		%	69.2		%
Surgeries — inpatient	47,223			46,274			45,626			45,897			185,020
Surgeries — outpatient	63,008			63,805			61,468			62,638			250,919
Total surgeries	110,231			110,079			107,094			108,535			435,939
Patient days — total	858,648			766,519			761,920			779,728			3,166,815
Adjusted patient days	1,486,139			1,373,480			1,365,662			1,383,372			5,608,653
Average length of stay (days)	4.71			4.55			4.53			4.58			4.59
Licensed beds (at end of period)	18,457			18,314			18,302			17,937			17,937
Average licensed beds	18,685			18,362			18,302			17,935			18,321
Utilization of licensed beds	51.1		%	45.9		%	45.3		%	47.3		%	47.4		%
Outpatient Visits
Total visits	1,842,539			1,749,847			1,722,292			1,734,523			7,049,201
Paying visits (excludes charity and uninsured)	1,725,976			1,633,372			1,607,184			1,617,970			6,584,502
Charity and uninsured visits	116,563			116,475			115,108			116,553			464,699
Emergency department visits	697,001			643,036			638,248			649,544			2,627,829
Paying visits as a percentage of total visits	93.7		%	93.3		%	93.3		%	93.3		%	93.4		%
Charity and uninsured visits as a percentage of total visits	6.3		%	6.7		%	6.7		%	6.7		%	6.6		%
Total emergency department admissions and visits	822,077			758,072			754,975			769,556			3,104,680
Revenues
Net patient service revenues⁽³⁾	$	3,643		$	3,443		$	3,434		$	3,561		$	14,081
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient service revenue⁽³⁾per adjusted patient admission	$	11,354		$	11,249		$	11,215		$	11,557		$	11,344
Net patient service revenue⁽³⁾ per adjusted patient day	$	2,451		$	2,507		$	2,515		$	2,574		$	2,511
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission⁽²⁾	$	10,561		$	10,619		$	10,771		$	10,861		$	10,701
Net patient service revenues⁽³⁾ from:
Medicare	21.5		%	20.4		%	19.8		%	20.1		%	20.5		%
Medicaid	8.8		%	9.1		%	9.8		%	9.1		%	9.2		%
Managed care	65.0		%	66.0		%	64.9		%	65.8		%	65.4		%
Uninsured	1.0		%	0.2		%	0.9		%	0.5		%	0.7		%
Indemnity and other	3.7		%	4.3		%	4.6		%	4.5		%	4.2		%

(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.
(3)	Less implicit price concessions.


TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS⁽¹⁾ (Unaudited)

(Dollars in millions except per adjusted patient day and per adjusted patient admission amounts)
	Three Months Ended						Six Months Ended
	3/31/2019			6/30/2019			6/30/2019

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	65			65			65
Total admissions	173,470			169,352			342,822
Adjusted patient admissions	305,871			304,066			609,937
Paying admissions (excludes charity and uninsured)	163,632			159,129			322,761
Charity and uninsured admissions	9,838			10,223			20,061
Admissions through emergency department	125,228			121,088			246,316
Paying admissions as a percentage of total admissions	94.3		%	94.0		%	94.1		%
Charity and uninsured admissions as a percentage of total admissions	5.7		%	6.0		%	5.9		%
Emergency department admissions as a percentage of total admissions	72.2		%	71.5		%	71.8		%
Surgeries — inpatient	44,553			44,641			89,194
Surgeries — outpatient	57,896			60,936			118,832
Total surgeries	102,449			105,577			208,026
Patient days — total	815,329			787,582			1,602,911
Adjusted patient days	1,408,053			1,387,929			2,795,982
Average length of stay (days)	4.70			4.65			4.68
Licensed beds (at end of period)	17,221			17,221			17,221
Average licensed beds	17,221			17,221			17,221
Utilization of licensed beds	52.6		%	50.3		%	51.4		%
Outpatient Visits
Total visits	1,686,864			1,693,805			3,380,669
Paying visits (excludes charity and uninsured)	1,577,635			1,581,555			3,159,190
Charity and uninsured visits	109,229			112,250			221,479
Emergency department visits	651,852			637,107			1,288,959
Paying visits as a percentage of total visits	93.5		%	93.4		%	93.4		%
Charity and uninsured visits as a percentage of total visits	6.5		%	6.6		%	6.6		%
Total emergency department admissions and visits	777,080			758,195			1,535,275
Revenues
Net patient service revenues⁽²⁾	$	3,557		$	3,547		$	7,104
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient service revenue⁽²⁾ per adjusted patient admission	$	11,629		$	11,665		$	11,647
Net patient service revenue⁽²⁾ per adjusted patient day	$	2,526		$	2,556		$	2,541
Net patient service revenues⁽²⁾ from:
Medicare	21.0		%	20.3		%	20.6		%
Medicaid	8.8		%	8.9		%	8.9		%
Managed care	65.9		%	65.7		%	65.8		%
Uninsured	—		%	0.3		%	0.2		%
Indemnity and other	4.3		%	4.8		%	4.5		%

(1)	Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the six months ended June 30, 2019 and 2018 and associated outpatient facilities, but excludes the results of hospitals Tenet divested since January 1, 2018.
(2)	Less implicit price concessions.


TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS⁽¹⁾ (Unaudited)

(Dollars in millions except per adjusted patient day and per adjusted patient admission amounts)
	Three Months Ended												Year Ended
	3/31/2018			6/30/2018			9/30/2018			12/31/2018			12/31/2018

Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)	65			65			65			65			65
Total admissions	173,684			163,903			164,075			166,458			668,120
Adjusted patient admissions	304,145			297,460			298,221			300,562			1,200,388
Paying admissions (excludes charity and uninsured)	164,239			153,816			153,227			156,392			627,674
Charity and uninsured admissions	9,445			10,087			10,848			10,066			40,446
Admissions through emergency department	119,957			111,902			113,833			117,229			462,921
Paying admissions as a percentage of total admissions	94.6		%	93.8		%	93.4		%	94.0		%	93.9		%
Charity and uninsured admissions as a percentage of total admissions	5.4		%	6.2		%	6.6		%	6.0		%	6.1		%
Emergency department admissions as a percentage of total admissions	69.1		%	68.3		%	69.4		%	70.4		%	69.3		%
Surgeries — inpatient	45,052			45,191			44,783			45,012			180,038
Surgeries — outpatient	59,720			62,205			60,080			61,151			243,156
Total surgeries	104,772			107,396			104,863			106,163			423,194
Patient days — total	817,000			743,442			740,870			758,359			3,059,671
Adjusted patient days	1,405,568			1,329,915			1,325,229			1,342,745			5,403,457
Average length of stay (days)	4.70			4.54			4.52			4.56			4.58
Licensed beds (at end of period)	17,246			17,246			17,234			17,237			17,237
Average licensed beds	17,246			17,246			17,234			17,235			17,240
Utilization of licensed beds	52.6		%	47.4		%	46.7		%	47.8		%	48.6		%
Outpatient Visits
Total visits	1,716,896			1,673,056			1,647,013			1,658,541			6,695,506
Paying visits (excludes charity and uninsured)	1,607,194			1,560,950			1,536,247			1,547,018			6,251,409
Charity and uninsured visits	109,702			112,106			110,766			111,523			444,097
Emergency department visits	663,722			622,898			617,925			630,557			2,535,102
Paying visits as a percentage of total visits	93.6		%	93.3		%	93.3		%	93.3		%	93.4		%
Charity and uninsured visits as a percentage of total visits	6.4		%	6.7		%	6.7		%	6.7		%	6.6		%
Total emergency department admissions and visits	783,679			734,800			731,758			747,786			2,998,023
Revenues
Net patient service revenues⁽²⁾	$	3,493		$	3,357		$	3,367		$	3,490		$	13,707
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient service revenue⁽²⁾ per adjusted patient admission	$	11,485		$	11,286		$	11,290		$	11,612		$	11,419
Net patient service revenue⁽²⁾ per adjusted patient day	$	2,485		$	2,524		$	2,541		$	2,599		$	2,537
Net patient service revenues⁽²⁾ from:
Medicare	20.9		%	20.1		%	19.5		%	19.8		%	20.1		%
Medicaid	8.7		%	8.9		%	9.8		%	9.1		%	9.1		%
Managed care	65.3		%	66.4		%	65.2		%	66.1		%	65.8		%
Uninsured	1.3		%	0.2		%	0.9		%	0.5		%	0.7		%
Indemnity and other	3.8		%	4.4		%	4.6		%	4.5		%	4.3		%

(1)	Information for our Hospital Operations and other segment is presented on a same-hospital basis, which includes the results of our same 65 hospitals operated throughout the six months ended June 30, 2019 and 2018 and associated outpatient facilities, but excludes the results of hospitals Tenet divested since January 1, 2018.
(2)	Less implicit price concessions.


TENET HEALTHCARE CORPORATION SEGMENT REPORTING (Unaudited)

(Dollars in millions)							June 30,			December 31,
							2019			2018
Assets
Hospital Operations and other							$	16,072		$	15,684
Ambulatory Care							6,057			5,711
Conifer							1,078			1,014
Total							$	23,207		$	22,409

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Capital expenditures:
Hospital Operations and other	$	118		$	108		$	288		$	228
Ambulatory Care	21			13			41			28
Conifer	5			4			7			12
Total	$	144		$	125		$	336		$	268

Net operating revenues:
Hospital Operations and other total prior to inter-segment eliminations⁽¹⁾	$	3,827		$	3,733		$	7,689		$	7,680
Ambulatory Care	524			531			1,004			1,029
Conifer
Tenet	146			144			292			294
Other customers	209			242			412			496
Total Conifer revenues	355			386			704			790
Inter-segment eliminations	(146		)	(144		)	(292		)	(294		)
Total	$	4,560		$	4,506		$	9,105		$	9,205

Equity in earnings of unconsolidated affiliates:
Hospital Operations and other	$	8		$	6		$	11		$	4
Ambulatory Care	34			33			65			60
Total	$	42		$	39		$	76		$	64

Adjusted EBITDA:
Hospital Operations and other⁽²⁾	$	347		$	345		$	684		$	747
Ambulatory Care	207			198			384			363
Conifer	103			91			202			189
Total	$	657		$	634		$	1,270		$	1,299

Depreciation and amortization:
Hospital Operations and other	$	185		$	164		$	364		$	339
Ambulatory Care	18			17			36			34
Conifer	11			13			22			25
Total	$	214		$	194		$	422		$	398

(1)	Hospital Operations and other revenues includes health plan revenues of approximately $1 million for both the three and six months ended June 30, 2019, and less than $1 million and $6 million for the three and six months ended June 30, 2018, respectively.
(2)	Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of less than $1 million and $(1) million for the three and six months ended June 30, 2019, respectively, and $1 million and less than $1 million for the three and six months ended June 30, 2018, respectively.


TENET HEALTHCARE CORPORATION STATEMENTS OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited)


(Dollars in millions)	Three Months Ended June 30,
	2019						2018

	Ambulatory Care as Reported Under GAAP			Unconsolidated Affiliates			Ambulatory Care as Reported Under GAAP			Unconsolidated Affiliates
Net operating revenues⁽¹⁾	$	524		$	619		$	531		$	547
Equity in earnings of unconsolidated affiliates⁽²⁾	34			—			33			—
Operating expenses:
Salaries, wages and benefits	157			156			165			134
Supplies	108			161			106			144
Other operating expenses, net	86			131			95			114
Depreciation and amortization	18			22			17			17
Impairment and restructuring charges, and acquisition-related costs	2			—			6			—
Net losses on sales, consolidation and deconsolidation of facilities	2			—			—			—
Operating income	185			149			175			138
Interest expense	(32		)	(6		)	(37		)	(5		)
Other	3			—			1			1
Net income from continuing operations, before income taxes	156			143			139			134
Income tax expense	(20		)	(2		)	(18		)	(2		)
Net income	136			$	141		121			$	132
Less: Net income available to noncontrolling interests	78						75
Net income available to Tenet Healthcare Corporation common shareholders	$	58					$	46
Equity in earnings of unconsolidated affiliates				$	34					$	33

(1)

On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 5.3% during the three months ended June 30, 2019, with cases increasing 3.2% and revenue per case increasing 2.0%.

(2)

At June 30, 2019, 112 of the 344 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 232 facilities and account for these investments as consolidated subsidiaries.


TENET HEALTHCARE CORPORATION STATEMENTS OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited)


(Dollars in millions)	Six Months Ended June 30,
	2019						2018

	Ambulatory Care as Reported Under GAAP			Unconsolidated Affiliates			Ambulatory Care as Reported Under GAAP			Unconsolidated Affiliates
Net operating revenues⁽¹⁾	$	1,004		$	1,187		$	1,029		$	1,040
Equity in earnings of unconsolidated affiliates⁽²⁾	65			—			60			—
Operating expenses:
Salaries, wages and benefits	310			303			327			254
Supplies	207			310			212			274
Other operating expenses, net	168			257			187			219
Depreciation and amortization	36			42			34			33
Impairment and restructuring charges, and acquisition-related costs	5			—			7			—
Net gains on sales, consolidation and deconsolidation of facilities	(3		)	(26		)	(1		)	—
Operating income	346			301			323			260
Interest expense	(63		)	(13		)	(73		)	(10		)
Other	6			6			3			1
Net income from continuing operations, before income taxes	289			294			253			251
Income tax expense	(35		)	(4		)	(33		)	(4		)
Net income	254			$	290		220			$	247
Less: Net income available to noncontrolling interests	146						139
Net income available to Tenet Healthcare Corporation common shareholders	$	108					$	81
Equity in earnings of unconsolidated affiliates				$	65					$	60

(1)

On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 4.8% during the six months ended June 30, 2019, with cases increasing 2.1% and revenue per case increasing 2.7%.

(2)

Non-GAAP Financial Measures

Adjusted EBITDA, a non-GAAP measure, is defined by the Company as net income available (loss attributable) to Tenet Healthcare Corporation common shareholders before (1) the cumulative effect of changes in accounting principle, (2) net loss attributable (income available) to noncontrolling interests, (3) income (loss) from discontinued operations, (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 (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 available (loss attributable) from continuing operations to Tenet Healthcare Corporation common shareholders, a non-GAAP measure, is defined by the Company as net income available (loss attributable) to Tenet Healthcare Corporation common shareholders before (1) net income (loss) from discontinued operations, (2) impairment and restructuring charges, and acquisition-related costs, (3) litigation and investigation costs, (4) net gains (losses) on sales, consolidation and deconsolidation of facilities, (5) gain (loss) from early extinguishment of debt, (6) income (loss) from divested operations and closed businesses, and (7) the associated impact of these items on taxes and noncontrolling interests. Adjusted diluted earnings (loss) per share from continuing operations, a non-GAAP term, is defined by the Company as Adjusted net income available (loss attributable) from continuing operations 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 net income available (loss attributable) to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, to Adjusted EBITDA is set forth in Table #1 below for each quarter in 2018 and 2019. A reconciliation of net income available (loss attributable) to Tenet Healthcare Corporation common shareholders, the most comparable GAAP measure, to Adjusted net income available (loss attributable) from continuing operations to Tenet Healthcare Corporation common shareholders is set forth in Table #2 below for each quarter in 2018 and 2019. A reconciliation of net cash provided by operating activities, the most comparable GAAP measure, to Free Cash Flow and Adjusted Free Cash Flow is set forth in Table #3 below for each quarter in 2018 and 2019.


TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #1 – Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA for 2019 (Unaudited)

(Dollars in millions)	2019
	1st Qtr			2nd Qtr			YTD
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(19	)	$	17		$	(2	)
Less: Net income available to noncontrolling interests	(84		)	(95		)	(179		)
Income from discontinued operations, net of tax	8			2			10
Income from continuing operations	57			110			167
Income tax expense	(17		)	(30		)	(47		)
Loss from early extinguishment of debt	(47		)	—			(47		)
Other non-operating income (expense), net	1			(1		)	—
Interest expense	(251		)	(247		)	(498		)
Operating income	371			388			759
Litigation and investigation costs	(13		)	(18		)	(31		)
Net losses on sales, consolidation and deconsolidation of facilities	(1		)	(1		)	(2		)
Impairment and restructuring charges, and acquisition-related costs	(19		)	(36		)	(55		)
Depreciation and amortization	(208		)	(214		)	(422		)
Income (loss) from divested and closed businesses	(1		)	—			(1		)
Adjusted EBITDA	$	613		$	657		$	1,270

Net operating revenues	$	4,545		$	4,560		$	9,105
Less: Net operating revenues from health plans	—			1			1
Adjusted net operating revenues	$	4,545		$	4,559		$	9,104

Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders as a % of net operating revenues	(0.4		)%	0.4		%	—		%
Adjusted EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA margin)	13.5		%	14.4		%	13.9		%


TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #1 – Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA for 2018 (Unaudited)

(Dollars in millions)	2018
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	99		$	26		$	(9	)	$	(5	)	$	111
Less: Net income available to noncontrolling interests	(92		)	(82		)	(74		)	(107		)	(355		)
Income from discontinued operations, net of tax	1			2			—			—			3
Income from continuing operations	190			106			65			102			463
Income tax expense	(70		)	(44		)	(6		)	(56		)	(176		)
Gain (loss) from early extinguishment of debt	(1		)	(1		)	—			3			1
Other non-operating expense, net	(1		)	(1		)	—			(3		)	(5		)
Interest expense	(255		)	(254		)	(249		)	(246		)	(1,004		)
Operating income	517			406			320			404			1,647
Litigation and investigation costs	(6		)	(13		)	(9		)	(10		)	(38		)
Net gains (losses) on sales, consolidation and deconsolidation of facilities	110			8			(7		)	16			127
Impairment and restructuring charges, and acquisition-related costs	(47		)	(30		)	(46		)	(86		)	(209		)
Depreciation and amortization	(204		)	(194		)	(204		)	(200		)	(802		)
Income (loss) from divested and closed businesses	(1		)	1			9			—			9
Adjusted EBITDA	$	665		$	634		$	577		$	684		$	2,560

Net operating revenues	$	4,699		$	4,506		$	4,489		$	4,619		$	18,313
Less: Net operating revenues from health plans	6			—			8			—			14
Adjusted net operating revenues	$	4,693		$	4,506		$	4,481		$	4,619		$	18,299

Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders as a % of net operating revenues	2.1		%	0.6		%	(0.2		)%	(0.1		)%	0.6		%
Adjusted EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA margin)	14.2		%	14.1		%	12.9		%	14.8		%	14.0		%


TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #2 – Reconciliations of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders for 2019 (Unaudited)

(Dollars in millions except per share amounts)	2019
	1st Qtr			2nd Qtr			YTD
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(19	)	$	17		$	(2	)
Net income from discontinued operations	8			$	2		10
Net income (loss) from continuing operations	(27		)	15			(12		)
Less: Impairment and restructuring charges, and acquisition-related costs	(19		)	(36		)	(55		)
Litigation and investigation costs	(13		)	(18		)	(31		)
Net losses on sales, consolidation and deconsolidation of facilities	(1		)	(1		)	(2		)
Loss from early extinguishment of debt	(47		)	—			(47		)
Income (loss) from divested and closed businesses	(1		)	—			(1		)
Tax impact of above items	(2		)	11			9
Adjusted net income available from continuing operations to common shareholders	$	56		$	59		$	115

Diluted earnings (loss) per share from continuing operations	$	(0.26	)	$	0.14		$	(0.12	)
Less: Impairment and restructuring charges, and acquisition-related costs	(0.18		)	(0.35		)	(0.53		)
Litigation and investigation costs	(0.12		)	(0.17		)	(0.30		)
Net losses on sales, consolidation and deconsolidation of facilities	(0.01		)	(0.01		)	(0.02		)
Loss from early extinguishment of debt	(0.45		)	—			(0.45		)
Income (loss) from divested and closed businesses	(0.01		)	—			(0.01		)
Tax impact of above items	(0.02		)	0.11			0.09
Adjusted diluted earnings per share from continuing operations	$	0.54		$	0.56		$	1.10

Weighted average basic shares outstanding (in thousands)	102,788			103,198			102,993
Weighted average dilutive shares outstanding (in thousands)	104,541			104,629			104,585


TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #2 – Reconciliations of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available from Continuing Operations to Common Shareholders for 2018 (Unaudited)

(Dollars in millions except per share amounts)	2018
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	99		$	26		$	(9	)	$	(5	)	$	111
Net income from discontinued operations	1			$	2		—			—			3
Net income (loss) from continuing operations	98			24			(9		)	(5		)	108
Less: Impairment and restructuring charges, and acquisition-related costs	(47		)	(30		)	(46		)	(86		)	(209		)
Litigation and investigation costs	(6		)	(13		)	(9		)	(10		)	(38		)
Net gains (losses) on sales, consolidation and deconsolidation of facilities	110			8			(7		)	16			127
Gain (loss) from early extinguishment of debt	(1		)	(1		)	—			3			1
Income (loss) from divested and closed businesses	(1		)	1			9			—			9
Tax impact of above items	(16		)	8			14			19			25
Adjusted net income available from continuing operations to common shareholders	$	59		$	51		$	30		$	53		$	193

Diluted earnings (loss) per share from continuing operations	$	0.95		$	0.23		$	(0.09	)	$	(0.05	)	$	1.04
Less: Impairment and restructuring charges, and acquisition-related costs	(0.46		)	(0.29		)	(0.44		)	(0.83		)	(2.01		)
Litigation and investigation costs	(0.06		)	(0.12		)	(0.09		)	(0.10		)	(0.37		)
Net gains (losses) on sales, consolidation and deconsolidation of facilities	1.08			0.07			(0.07		)	0.15			1.22
Gain (loss) from early extinguishment of debt	(0.01		)	(0.01		)	—			0.03			0.01
Income (loss) from divested and closed businesses	(0.01		)	0.01			0.09			—			0.09
Tax impact of above items	(0.16		)	0.08			0.13			0.18			0.24
Adjusted diluted earnings per share from continuing operations	$	0.57		$	0.49		$	0.29		$	0.51		$	1.86

Weighted average basic shares outstanding (in thousands)	101,392			102,147			102,402			102,501			102,110
Weighted average dilutive shares outstanding (in thousands)	102,656			104,177			104,575			104,118			103,881


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)

(Dollars in millions)	2019
	1st Qtr			2nd Qtr			YTD
Net cash provided by operating activities	$	10		$	284		$	294
Purchases of property and equipment	(192		)	(144		)	(336		)
Free cash flow	$	(182	)	$	140		$	(42	)

Net cash used in investing activities	$	(139	)	$	(164	)	$	(303	)
Net cash used in financing activities	$	(30	)	$	(123	)	$	(153	)

Net cash provided by operating activities	$	10		$	284		$	294
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements	(32		)	(48		)	(80		)
Net cash used in operating activities from discontinued operations	(2		)	(3		)	(5		)
Adjusted net cash provided by operating activities from continuing operations	44			335			379
Purchases of property and equipment	(192		)	(144		)	(336		)
Adjusted free cash flow – continuing operations	$	(148	)	$	191		$	43

(Dollars in millions)	2018
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total
Net cash provided by operating activities	$	113		$	348		$	338		$	250		$	1,049
Purchases of property and equipment	(143		)	(125		)	(136		)	(213		)	(617		)
Free cash flow	$	(30	)	$	223		$	202		$	37		$	432

Net cash provided by (used in) investing activities	$	373		$	(148	)	$	(105	)	$	(235	)	$	(115	)
Net cash used in financing activities	$	(123	)	$	(771	)	$	(136	)	$	(104	)	$	(1,134	)

Net cash provided by operating activities	$	113		$	348		$	338		$	250		$	1,049
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements	(33		)	(30		)	(50		)	(50		)	(163		)
Net cash used in operating activities from discontinued operations	(1		)	(2		)	(1		)	(1		)	(5		)
Adjusted net cash provided by operating activities from continuing operations	147			380			389			301			1,217
Purchases of property and equipment	(143		)	(125		)	(136		)	(213		)	(617		)
Adjusted free cash flow – continuing operations	$	4		$	255		$	253		$	88		$	600


TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #4 – Reconciliation of Outlook Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted EBITDA (Unaudited)

(Dollars in millions)	Q3 2019						2019
	Low			High			Low			High
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(21	)	$	21		$	16		$	121
Less: Net income available to noncontrolling interests	(95		)	(105		)	(410		)	(430		)
Net income (loss) from discontinued operations, net of tax	(5		)	—			—			5
Income tax expense	(21		)	(34		)	(165		)	(185		)
Interest expense	(250		)	(240		)	(995		)	(985		)
Loss from early extinguishment of debt⁽¹⁾	—			—			(47		)	(47		)
Other non-operating expense, net	—			(5		)	(10		)	(15		)
Net losses on sales, consolidation and deconsolidation of facilities⁽¹⁾	—			—			(2		)	(2		)
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements⁽²⁾	(45		)	(35		)	(175		)	(125		)
Depreciation and amortization	(200		)	(210		)	(820		)	(840		)
Loss from divested and closed businesses	(5		)	—			(10		)	(5		)
Adjusted EBITDA	$	600		$	650		$	2,650		$	2,750

Income (loss) from continuing operations	$	(16	)	$	21		$	16		$	116
Net operating revenues	$	4,300		$	4,600		$	18,000		$	18,400
Income (loss) from continuing operations as a % of operating revenues	(0.4		)%	0.5		%	0.1		%	0.6		%
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)	14.0		%	14.1		%	14.7		%	14.9		%

(1)

The Company does not generally forecast losses from the early extinguishment of debt or net gains (losses) on sales, consolidation and deconsolidation of facilities 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. The figures shown represent the Company’s actual year-to-date results for these items.

(2)

The Company has provided an estimate of restructuring charges and related payments that it anticipates in 2019. The figures shown represent the Company’s estimate for restructuring charges plus the actual year-to-date results for impairment charges, acquisition-related costs, and litigation costs and settlements. The Company does not generally forecast impairment charges, acquisition-related costs, 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.


TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #5 – Reconciliations of Outlook Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Outlook Adjusted Net Income Available from Continuing Operations to Common Shareholders (Unaudited)

(Dollars in millions except per share amounts)	Q3 2019						2019
	Low			High			Low			High
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(21	)	$	21		$	16		$	121
Net income (loss) from discontinued operations, net of tax	(5		)	—			—			5
Net income (loss) from continuing operations	(16		)	21			16			116
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements	(45		)	(35		)	(175		)	(125		)
Net losses on sales, consolidation and deconsolidation of facilities	—			—			(2		)	(2		)
Loss from early extinguishment of debt	—			—			(47		)	(47		)
Loss from divested and closed businesses	(5		)	—			(10		)	(5		)
Tax impact of above items	10			5			30			20
Adjusted net income available from continuing operations to common shareholders	$	24		$	51		$	220		$	275

Diluted earnings (loss) per share from continuing operations	$	(0.15	)	$	0.20		$	0.15		$	1.09
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements	(0.42		)	(0.33		)	(1.65		)	(1.18		)
Net losses on sales, consolidation and deconsolidation of facilities	—			—			(0.02		)	(0.02		)
Loss from early extinguishment of debt	—			—			(0.44		)	(0.44		)
Loss from divested and closed businesses	(0.05		)	—			(0.09		)	(0.05		)
Tax impact of above items	0.09			0.05			0.27			0.19
Adjusted diluted earnings per share from continuing operations	$	0.23		$	0.48		$	2.08		$	2.59

Weighted average basic shares outstanding (in thousands)	104,000			104,000			104,000			104,000
Weighted average dilutive shares outstanding (in thousands)	106,000			106,000			106,000			106,000


TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #6 – Reconciliation of Outlook Net Cash Provided by Operating Activities to Outlook Adjusted Free Cash Flow from Continuing Operations


(Dollars in millions)	2019
	Low			High
Net cash provided by operating activities	$	1,070		$	1,375
Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements⁽¹⁾	(175		)	(125		)
Net cash used in operating activities from discontinued operations	(5		)	—
Adjusted net cash provided by operating activities – continuing operations	1,250			1,500
Purchases of property and equipment – continuing operations	(650		)	(700		)
Adjusted free cash flow – continuing operations⁽²⁾	$	600		$	800

(1)

The Company has provided an estimate of payments that it anticipates in 2019 related to restructuring charges. The Company does not generally 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.

Contacts

Investor Contact
Brendan Strong
469-893-6992
investorrelations@tenethealth.com

Media Contact
Lesley Bogdanow
469-893-2640
mediarelations@tenethealth.com

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