0000070318false00000703182024-10-292024-10-290000070318exch:XNYSus-gaap:CommonStockMember2024-10-292024-10-290000070318exch:XNYSus-gaap:SeniorNotesMember2024-10-292024-10-29


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 _______________
Date of Report: October 29, 2024
(Date of earliest event reported)
 _______________
TENET HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
 
Nevada
 1-7293 95-2557091
(State of Incorporation) (Commission File Number) (IRS Employer
Identification Number)
14201 Dallas Parkway
Dallas, TX 75254
(Address of principal executive offices, including zip code)
(469) 893-2200
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)		Name of each exchange
on which registered
Common stock, $0.05 par valueTHCNYSE
6.875% Senior Notes due 2031THC31NYSE
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.Results of Operations and Financial Condition.
The information contained herein is being furnished pursuant to Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On October 29, 2024, Tenet Healthcare Corporation (the “Company”) issued a press release reporting the financial results of the Company for the quarter ended September 30, 2024. A copy of the press release is attached to this report as Exhibit 99.1 and incorporated herein by reference.

Item 9.01.Financial Statements and Exhibits.
 
(d)Exhibits
Exhibit No.Description
99.1 
104 Cover Page Interactive Data File (embedded within the inline XBRL document)





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
TENET HEALTHCARE CORPORATION
Date: October 29, 2024
By:/s/ R. SCOTT RAMSEY
R. Scott Ramsey
Senior Vice President, Controller


Exhibit 99.1
tenethealthrgb.jpg

Tenet Reports Strong Third Quarter 2024 Results;
Raises 2024 Financial Outlook
•Net income available to common shareholders in third quarter 2024 was $472 million, or $4.89 per diluted share, including an after-tax gain of $209 million, or $2.16 per diluted share, primarily associated with previously announced hospital divestitures

•Adjusted diluted earnings per share1 was $2.93 in third quarter 2024

•Consolidated Adjusted EBITDA1 in third quarter 2024 of $978 million increased 14.5% over third quarter 2023

•Third quarter 2024 Ambulatory Care Adjusted EBITDA of $439 million increased 18.6% over third quarter 2023

•FY 2024 Adjusted EBITDA Outlook now expected to be in the range of $3.9 billion to $4.0 billion, a $50 million increase



DALLAS — October 29, 2024 — Tenet Healthcare Corporation (Tenet) (NYSE: THC) today announced its results for the quarter ended September 30, 2024.

"Our businesses continue to produce strong results and generate robust free cash flow with same store revenue growth and profitability well above our expectations due to the focused execution of our strategy and disciplined operations," said Saum Sutaria, M.D., Chairman and Chief Executive Officer of Tenet. "We have furthered our portfolio transformation and are well-positioned to deliver enhanced value to our patients, physician partners, and shareholders."







Page 1

Tenet’s results for third quarter 2024 versus third quarter 2023 are as follows:

Three Months Ended September 30,Nine Months Ended September 30,
($ in millions, except per share results)2024202320242023
Net operating revenues
$5,122
$5,066
$15,593
$15,169
Net income available to Tenet common shareholders
$472
$101
$2,882
$367
Net income available to Tenet common shareholders per diluted share
$4.89
$0.94
$29.27
$3.41
Adjusted EBITDA1
$978
$854
$2,947
$2,529
Adjusted diluted earnings per share1
$2.93$1.44$8.47$4.30

•Net income available to the Company’s common shareholders in the third quarter 2024 was $472 million, or $4.89 per diluted share, versus $101 million, or $0.94 per diluted share, in third quarter 2023. Third quarter 2024 results included a pre-tax gain of $348 million ($209 million after-tax or $2.16 per diluted share) primarily associated with the sale of the Company's 70% majority ownership interest in Brookwood Baptist Health in Alabama.

•Adjusted EBITDA1 in third quarter 2024 was $978 million compared to $854 million in third quarter 2023, reflecting strong same-hospital admissions growth, strong ambulatory net revenue per case growth, favorable payer mix, and increased Medicaid supplemental revenues in Michigan, partially offset by higher medical fees as well as the impact of hospital divestitures.


Page 2

Balance Sheet and Cash Flows

•Cash flows provided by operating activities for the nine months ended September 30, 2024 were $2.378 billion versus $1.550 billion for the nine months ended September 30, 2023.

•The Company produced free cash flow1 of $1.777 billion for the nine months ended September 30, 2024 versus $1.007 billion for the nine months ended September 30, 2023.

•In the three months ended September 30, 2024, the Company repurchased 795,112 shares of common stock for $124 million. In the nine months ended September 30, 2024, the Company repurchased 5,596,573 shares of common stock for $672 million.

•The Company’s ratio of net debt to Adjusted EBITDA1 was 2.22x at September 30, 2024 compared to 2.61x at June 30, 2024 and 3.89x at December 31, 2023.



Recent Transaction

•On October 1, 2024, the Company announced the completion of the sale of its 70% majority ownership interest in Brookwood Baptist Health in Birmingham, Alabama to Orlando Health in the third quarter of 2024. The completed transaction included five hospitals and other related operations. Our outlook for full year 2024 net cash provided by operating activities and free cash flow1 now reflects the anticipated payment of approximately $175 million of income taxes, primarily in connection with the net gain on the sale of these facilities.




Page 3

Ambulatory Care (Ambulatory) Segment

Tenet’s Ambulatory business segment is comprised of the operations of United Surgical Partners International (USPI). As of September 30, 2024, USPI had interests in 520 ambulatory surgery centers (376 consolidated) and 24 surgical hospitals (seven consolidated) in 37 states.

Three Months Ended September 30,Nine Months Ended September 30,
Ambulatory segment results ($ in millions)
2024202320242023
Revenues
Net operating revenues$1,139$941
$3,275
$2,788
Same-facility system-wide net patient service revenues2
$1,895$1,744$5,516$5,133
Volume Changes versus the Prior-Year Period
Same-facility system-wide surgical cases2
1.0 %4.1 %0.4 %6.2 %
Same-facility system-wide surgical cases on same-business day basis2
(0.6)%5.8 %(0.1)%6.8 %
Adjusted EBITDA, Margins and NCI
Adjusted EBITDA
$439
$370
$1,280
$1,080
Adjusted EBITDA margin
38.5%
39.3%
39.1%
38.7%
Adjusted EBITDA less NCI
$265
$233
$779
$678

•Third quarter 2024 net operating revenues increased 21.0% compared to third quarter 2023 driven by strong net revenue per case growth, acquisitions of facilities, and increased service lines.

•Surgical business same-facility system-wide net patient service revenues increased 8.7% in third quarter 2024 compared to third quarter 2023, with cases up 1.0% and net revenue per case up 7.6%. Net revenue per case growth was driven by higher acuity associated with favorable case mix as well as favorable payer mix.

•Third quarter 2024 Adjusted EBITDA increased 18.6% compared to third quarter 2023, due to strong net revenue per case growth, disciplined expense management, and contributions from acquisitions and de novo facilities.






Page 4

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.

Three Months Ended September 30,Nine Months Ended September 30,
Hospital segment results ($ in millions)
2024202320242023
Revenues
Net operating revenues
$3,983$4,125
$12,318
$12,381
Same-hospital net patient service revenues3
$3,383
$3,190
$10,298
$9,507
Same-Hospital Volume Changes versus the Prior-Year Period
Admissions
5.2%
0.6%
4.9%
2.6%
Adjusted admissions4
2.7%
0.4%
2.3%
3.3%
Outpatient visits (including outpatient ER visits)
0.5%
(2.0)%
0.1%
(1.0)%
Emergency Room visits (inpatient and outpatient)
(0.2)%
(0.9)%
1.8%
1.3%
Hospital surgeries
0.6%
(0.7)%
—%
0.5%
Adjusted EBITDA
Adjusted EBITDA
$539
$484
$1,667
$1,449
Adjusted EBITDA margin
13.5%
11.7%
13.5%
11.7%

•Third quarter 2024 net operating revenues declined 3.4% from third quarter 2023 primarily due to the impact of hospital divestitures in first quarter 2024, partially offset by strong same hospital admissions growth, favorable payer mix, and improved pricing yield.

•Same-hospital net patient service revenue per adjusted admission increased 3.3% year-over-year for third quarter 2024 primarily due to improved pricing yield, favorable payer mix, and our focus on growing higher acuity services.

•Adjusted EBITDA in third quarter 2024 was $539 million compared to $484 million in third quarter 2023, reflecting strong same-hospital admissions growth and revenue per adjusted admission, favorable payer mix, and increased supplemental revenues in Michigan, partially offset by higher medical fees as well as the impact of hospital divestitures.



Page 5

2024 Outlook1

Tenet’s Outlook for full year 2024 (consolidated and by segment) and fourth quarter 2024 follows. This outlook reflects the sale of three Coastal South Carolina hospitals on January 31, 2024, the sale of six California hospitals on March 31, 2024, and the sale of five Alabama hospitals on September 30, 2024.

CONSOLIDATED ($ in millions, except per share amounts)
FY 2024 Outlook
Fourth Quarter
2024 Outlook
Net operating revenues
$20,600 to $20,800
$5,007 to $5,207
Net income available to Tenet common stockholders
$3,093 to $3,193
$211 to $311
Adjusted EBITDA
$3,900 to $4,000
$953 to $1,053
Adjusted EBITDA margin
18.9% to 19.2%
19.0% to 20.2%
Diluted income per common share
$31.56 to $32.58
$2.20 to $3.24
Adjusted net income
$1,090 to $1,150
$258 to $318
Adjusted diluted earnings per share
$11.12 to $11.73
$2.69 to $3.31
Equity in earnings of unconsolidated affiliates$260 to $270$78 to $88
Depreciation and amortization
$820 to $840
$195 to $215
Interest expense
$820 to $830
$197 to $207
Income tax expense5
$1,185 to $1,215
$84 to $114
Net income available to NCI
$835 to $855
$225 to $245
Weighted average diluted common shares
~98 million
~96 million
NCI cash distributions$725 to $775
Net cash provided by operating activities6
$1,775 to $2,125
Adjusted net cash provided by operating activities6
$1,950 to $2,250
Capital expenditures
$800 to $900
Free cash flow6
$975 to $1,225
Adjusted free cash flow6
$1,150 to $1,350



Page 6

Ambulatory Segment ($ in millions)
FY 2024 Outlook
Net operating revenues$4,375 to $4,425
Adjusted EBITDA$1,760 to $1,800
NCI$690 to $710
Adjusted EBITDA less NCI$1,070 to $1,090
Changes versus prior year7:
Surgical cases volumesUp 0.0% to 1.0%
Net revenues per surgical caseUp 6.0% to 7.0%

Hospital Segment ($ in millions)
FY 2024 Outlook
Net operating revenues$16,225 to $16,375
Adjusted EBITDA$2,140 to $2,200
NCI$145 to $145
Changes versus prior year7:
Inpatient admissionsUp 4.0% to 5.0%
Adjusted admissionsUp 1.5% to 2.5%




Management’s Webcast Discussion of Results
Tenet management will discuss the Company’s third quarter 2024 results in a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on October 29, 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 October 29, 2024.



Page 7

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, 2023 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 fourth 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 2024, 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, 2023 through September 30, 2024. 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 and Adjusted free cash flow include an estimate of approximately $875 million of net income tax payments associated with the gains on sale of the three hospitals and related operations in South Carolina, the six hospitals and related operations in California, and the five hospitals and related operations in Alabama, approximately $175 million of which have already been paid as of September 30, 2024.
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.



Page 8

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 ambulatory surgery centers and surgical hospitals. We also operate a national portfolio of acute care and specialty hospitals, 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.

Contact Information
Investor ContactMedia Contact
Will McDowellRobert Dyer
469-893-2387469-893-2640
william.mcdowell@tenethealth.com
mediarelations@tenethealth.com



Page 9

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 is defined by the Company as Adjusted net income available (loss attributable) to Tenet common shareholders, divided by the weighted average diluted shares outstanding in the reporting period.
•Adjusted net income available (loss attributable) 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.
•Adjusted Free Cash Flow is defined by the Company as (1) Adjusted net cash provided by (used in) operating activities, less (2) purchases of property and equipment.
•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.


Page 10

Tenet Healthcare Corporation
Financial Statements and Reconciliations
Third Quarter Earnings Release
Table of Contents

Page 11


    
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions, except per share amounts)Three Months Ended September 30,
2024%2023%Change
Net operating revenues$5,122 100.0 %$5,066 100.0 %1.1 %
Grant income4 0.1 %3 0.1 %33.3 %
Equity in earnings of unconsolidated affiliates62 1.2 %51 1.0 %21.6 %
Operating expenses:  
Salaries, wages and benefits2,218 43.3 %2,288 45.2 %(3.1)%
Supplies881 17.2 %877 17.3 %0.5 %
Other operating expenses, net1,111 21.6 %1,101 21.7 %0.9 %
Depreciation and amortization209 4.1 %224 4.5 %
Impairment and restructuring charges, and acquisition-related costs19 0.4 %47 0.9 %
Litigation and investigation costs9 0.2 %14 0.3 %
Net losses (gains) on sales, consolidation and deconsolidation of facilities(348)(6.8)%1 — %
Operating income1,089 21.3 %568 11.2 %
Interest expense(202)(227)
Other non-operating income, net35 4 
Income before income taxes922 345 
Income tax expense(241)(79)
Net income681 266 
Less: Net income available to noncontrolling interests209 165 
Net income available to Tenet Healthcare Corporation common shareholders$472 $101 
Earnings per share available to Tenet Healthcare Corporation common shareholders:
Basic$4.93 $0.99 
Diluted$4.89 $0.94 
Weighted average shares and dilutive securities outstanding (in thousands):
Basic95,665 101,544
Diluted96,652104,425


Page 12

    
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in millions, except per share amounts)Nine Months Ended September 30,
2024%2023%Change
Net operating revenues$15,593 100.0 %$15,169 100.0 %2.8 %
Grant income9 0.1 %14 0.1 %(35.7)%
Equity in earnings of unconsolidated affiliates182 1.2 %155 1.0 %17.4 %
Operating expenses:  
Salaries, wages and benefits6,707 43.0 %6,831 45.0 %(1.8)%
Supplies2,717 17.4 %2,659 17.5 %2.2 %
Other operating expenses, net3,413 22.0 %3,319 21.9 %2.8 %
Depreciation and amortization625 4.0 %654 4.3 %
Impairment and restructuring charges, and acquisition-related costs75 0.5 %84 0.6 %
Litigation and investigation costs18 0.1 %28 0.2 %
Net gains on sales, consolidation and deconsolidation of facilities(2,906)(18.6)%(12)(0.1)%
Operating income5,135 32.9 %1,775 11.7 %
Interest expense(623)(674)
Other non-operating income, net89 8 
Loss from early extinguishment of debt(8)(11)
Income before income taxes4,593 1,098 
Income tax expense(1,101)(243)
Net income3,492 855 
Less: Net income available to noncontrolling interests610 488 
Net income available to Tenet Healthcare Corporation common shareholders$2,882 $367 
Earnings per share available to Tenet Healthcare Corporation common shareholders:
Basic$29.56 $3.60 
Diluted$29.27 $3.41 
Weighted average shares and dilutive securities outstanding (in thousands):
Basic97,505 101,869
Diluted98,518105,021


Page 13

    
TENET HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in millions)September 30,December 31,
20242023
ASSETS
Current assets:
Cash and cash equivalents$4,094 $1,228 
Accounts receivable2,598 2,914 
Inventories of supplies, at cost356 411 
Assets held for sale20 775 
Other current assets1,691 1,839 
Total current assets
8,759 7,167 
Investments and other assets3,064 3,157 
Deferred income taxes36 77 
Property and equipment, at cost, less accumulated depreciation and amortization5,552 6,236 
Goodwill10,588 10,307 
Other intangible assets, at cost, less accumulated amortization1,373 1,368 
Total assets
$29,372 $28,312 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt$95 $120 
Accounts payable1,265 1,408 
Accrued compensation and benefits879 930 
Professional and general liability reserves286 254 
Accrued interest payable248 200 
Liabilities held for sale12 69 
Income tax payable826 23 
Other current liabilities1,927 1,756 
Total current liabilities
5,538 4,760 
Long-term debt, net of current portion12,776 14,882 
Professional and general liability reserves855 792 
Defined benefit plan obligations308 335 
Deferred income taxes260 326 
Other long-term liabilities1,560 1,709 
Total liabilities
21,297 22,804 
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries2,649 2,391 
Equity:  
Shareholders’ equity:  
Common stock8 8 
Additional paid-in capital4,849 4,834 
Accumulated other comprehensive loss(175)(181)
Retained earnings (accumulated deficit)2,690 (192)
Common stock in treasury, at cost(3,538)(2,861)
Total shareholders’ equity3,834 1,608 
Noncontrolling interests
1,592 1,509 
Total equity 5,426 3,117 
Total liabilities and equity
$29,372 $28,312 






Page 14

    
TENET HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in millions)Nine Months Ended
September 30,
20242023
Net income$3,492 $855 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization625 654 
Deferred income tax expense (benefit)(29)75 
Stock-based compensation expense52 48 
Impairment and restructuring charges, and acquisition-related costs75 84 
Litigation and investigation costs18 28 
Net gains on sales, consolidation and deconsolidation of facilities(2,906)(12)
Loss from early extinguishment of debt8 11 
Equity in earnings of unconsolidated affiliates, net of distributions received(9)5 
Amortization of debt discount and debt issuance costs21 25 
Net gains from the sale of investments and long-lived assets(2)(25)
Other items, net(3)(1)
Changes in cash from operating assets and liabilities:  
Accounts receivable183 31 
Inventories and other current assets10 (49)
Income taxes821 (46)
Accounts payable, accrued expenses and other current liabilities123 (38)
Other long-term liabilities18 10 
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements(119)(105)
Net cash provided by operating activities2,378 1,550 
Cash flows from investing activities:  
Purchases of property and equipment(601)(543)
Purchases of businesses or joint venture interests, net of cash acquired(524)(110)
Proceeds from sales of facilities and other assets4,965 38 
Proceeds from sales of marketable securities and long-term investments25 40 
Purchases of marketable securities and long-term investments(46)(54)
Other items, net(18)(7)
Net cash provided by (used in) investing activities3,801 (636)
Cash flows from financing activities:  
Repayments of borrowings(2,212)(1,478)
Proceeds from borrowings16 1,368 
Repurchases of common stock(672)(90)
Debt issuance costs— (16)
Distributions paid to noncontrolling interests(496)(425)
Proceeds from the sale of noncontrolling interests13 37 
Purchases of noncontrolling interests(127)(127)
Advances from managed care payers342 — 
Repayments of advances from managed care payers(160)— 
Other items, net(17)13 
Net cash used in financing activities(3,313)(718)
Net increase in cash and cash equivalents2,866 196 
Cash and cash equivalents at beginning of period1,228 858 
Cash and cash equivalents at end of period$4,094 $1,054 
Supplemental disclosures:  
Interest paid, net of capitalized interest$(555)$(589)
Income tax payments, net$(308)$(212)


Page 15

    
TENET HEALTHCARE CORPORATION
SEGMENT REPORTING
(Unaudited)
Three Months EndedNine Months Ended
September 30,September 30,
(Dollars in millions)2024202320242023
Net operating revenues:     
Ambulatory Care$1,139 $941 $3,275 $2,788 
Hospital Operations and Services3,983 4,125 12,318 12,381 
Total$5,122 $5,066 $15,593 $15,169 
Equity in earnings of unconsolidated affiliates:    
Ambulatory Care$61 $50 $175 $149 
Hospital Operations and Services1 1 7 6 
Total$62 $51 $182 $155 
Adjusted EBITDA:    
Ambulatory Care$439 $370 $1,280 $1,080 
Hospital Operations and Services539 484 1,667 1,449 
Total$978 $854 $2,947 $2,529 
Adjusted EBITDA margins:
Ambulatory Care38.5 %39.3 %39.1 %38.7 %
Hospital Operations and Services13.5 %11.7 %13.5 %11.7 %
Total19.1 %16.9 %18.9 %16.7 %
Capital expenditures:
Ambulatory Care$28 $20 $65 $58 
Hospital Operations and Services188 156 536 485 
Total$216 $176 $601 $543 


Page 16

    
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 to Common Shareholders
(Unaudited)
Three Months EndedNine Months Ended
September 30,September 30,
(Dollars in millions, except per share amounts)2024202320242023
Net income available to Tenet Healthcare Corporation common shareholders$472 $101 $2,882 $367 
Less:
Impairment and restructuring charges, and acquisition-related costs
  (19)(47)(75)(84)
Litigation and investigation costs(9)(14)(18)(28)
Net gains (losses) on sales, consolidation and deconsolidation of facilities348 (1)2,906 12 
Loss from early extinguishment of debt— — (8)(11)
Tax and noncontrolling interests impact of above items (130)10 (755)17 
Adjusted net income available to common shareholders$282 $153 $832 $461 
Diluted earnings per share$4.89 $0.94 $29.27 $3.41 
Less:
Impairment and restructuring charges, and acquisition-related costs
(0.20)(0.45)(0.76)(0.80)
Litigation and investigation costs(0.09)(0.13)(0.19)(0.27)
Net gains (losses) on sales, consolidation and deconsolidation of facilities3.60 (0.01)29.50 0.12 
Loss from early extinguishment of debt— — (0.08)(0.10)
Tax and noncontrolling interests impact of above items(1.35)0.09 (7.67)0.16 
Adjusted diluted earnings per share$2.93 $1.44 $8.47 $4.30 
Weighted average basic shares outstanding (in thousands)95,665 101,544 97,505 101,869 
Weighted average dilutive shares outstanding (in thousands)96,652 104,425 98,518 105,021 


Page 17

    
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 EndedNine Months Ended
September 30,September 30,
(Dollars in millions)2024202320242023
Net income available to Tenet Healthcare Corporation common shareholders$472 $101 $2,882 $367 
Less:
Net income available to noncontrolling interests(209)(165)(610)(488)
Net income681 266 3,492 855 
Income tax expense(241)(79)(1,101)(243)
Loss from early extinguishment of debt— — (8)(11)
Other non-operating income, net35 4 89 8 
Interest expense(202)(227)(623)(674)
Operating income1,089 568 5,135 1,775 
Litigation and investigation costs(9)(14)(18)(28)
Net gains (losses) on sales, consolidation and deconsolidation of facilities348 (1)2,906 12 
Impairment and restructuring charges, and acquisition-related costs(19)(47)(75)(84)
Depreciation and amortization(209)(224)(625)(654)
Adjusted EBITDA$978 $854 $2,947 $2,529 
Net operating revenues$5,122 $5,066 $15,593 $15,169 
Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues9.2 %2.0 %18.5 %2.4 %
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)19.1 %16.9 %18.9 %16.7 %



Page 18

    
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
(Unaudited)
2024
(Dollars in millions)Q3YTD
Net cash provided by operating activities$1,045 $2,378 
Purchases of property and equipment(216)(601)
Free cash flow$829 $1,777 
Net cash provided by investing activities$667 $3,801 
Net cash used in financing activities$(498)$(3,313)
Net cash provided by operating activities$1,045 $2,378 
Less:
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements(55)(119)
Adjusted net cash provided by operating activities1,100 2,497 
Purchases of property and equipment(216)(601)
Adjusted free cash flow$884 $1,896 
2023
(Dollars in millions)Q3YTD
Net cash provided by operating activities$503 $1,550 
Purchases of property and equipment(176)(543)
Free cash flow$327 $1,007 
Net cash used in investing activities$(169)$(636)
Net cash used in financing activities$(214)$(718)
Net cash provided by operating activities$503 $1,550 
Less:
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements(27)(105)
Adjusted net cash provided by operating activities530 1,655 
Purchases of property and equipment(176)(543)
Adjusted free cash flow$354 $1,112 


Page 19

    
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 to Common Shareholders
(Unaudited)
Fourth Quarter 2024FY 2024
(Dollars in millions, except per share amounts)LowHighLowHigh
Net income available to Tenet Healthcare Corporation common shareholders$211 $311 $3,093 $3,193 
Less:
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1)
(57)(7)(150)(100)
Net gains on sales, consolidation and deconsolidation of facilities(2)
— — 2,906 2,906 
Loss from early extinguishment of debt(2)
— — (8)(8)
Tax and noncontrolling interests impact of above items10 — (745)(755)
Adjusted net income available to common shareholders$258 $318 $1,090 $1,150 
Diluted earnings per share$2.20 $3.24 $31.56 $32.58 
Less:
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements
(0.59)(0.07)(1.53)(1.02)
Net gains on sales, consolidation and deconsolidation of facilities— — 29.65 29.65 
Loss from early extinguishment of debt— — (0.08)(0.08)
Tax and noncontrolling interests impact of above items0.10 — (7.60)(7.70)
Adjusted diluted earnings per share$2.69 $3.31 $11.12 $11.73 
Weighted average basic shares outstanding (in thousands)95,000 95,000 97,000 97,000 
Weighted average dilutive shares outstanding (in thousands)96,000 96,000 98,000 98,000 
(1) The figures shown represent the Company's estimate for restructuring charges plus the actual year-to-date results for impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements. 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 net gains on sales, consolidation and deconsolidation of facilities or losses from the early extinguishment of debt because the Company does not believe that it can forecast these items with sufficient accuracy since it is indeterminable at the time the Company provides its financial Outlook. The figures shown relate to transactions that have already occurred in 2024.
        






Page 20

    
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)
Fourth Quarter 2024FY 2024
(Dollars in millions)LowHighLowHigh
Net income available to Tenet Healthcare Corporation common shareholders$211 $311 $3,093 $3,193 
Less:
Net income available to noncontrolling interests(225)(245)(835)(855)
Income tax expense(84)(114)(1,185)(1,215)
Interest expense(207)(197)(830)(820)
Loss from early extinguishment of debt(2)
— — (8)(8)
Other non-operating income, net26 36 115 125 
Net gains on sales, consolidation and deconsolidation of facilities(2)
— — 2,906 2,906 
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1)
(57)(7)(150)(100)
Depreciation and amortization(195)(215)(820)(840)
Adjusted EBITDA$953 $1,053 $3,900 $4,000 
Net income available to Tenet Healthcare Corporation common shareholders$211 $311 $3,093 $3,193 
Net operating revenues$5,007 $5,207 $20,600 $20,800 
Net income available to Tenet Healthcare Corporation common shareholders as a % of net operating revenues4.2 %6.0 %15.0 %15.4 %
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)19.0 %20.2 %18.9 %19.2 %
(1) The figures shown represent the Company's estimate for restructuring charges plus the actual year-to-date results for impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements. 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 net gains on sales, consolidation and deconsolidation of facilities or losses from the early extinguishment of debt because the Company does not believe that it can forecast these items with sufficient accuracy since it is indeterminable at the time the Company provides its financial Outlook. The figures shown relate to transactions that have already occurred in 2024.



Page 21

    
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP disclosures
Table #6 – Reconciliations of Outlook Net Cash Provided by Operating Activities
to Outlook Free Cash Flow and Outlook Adjusted Free Cash Flow
(Unaudited)
FY 2024
(Dollars in millions)LowHigh
Net cash provided by operating activities$1,775 $2,125 
Purchases of property and equipment(800)(900)
Free cash flow$975 $1,225 
Net cash provided by operating activities$1,775 $2,125 
Less:
Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1)
(175)(125)
Adjusted net cash provided by operating activities
1,950 2,250 
Purchases of property and equipment(800)(900)
Adjusted free cash flow(2)
$1,150 $1,350 
(1) The figures shown represent the Company's estimate for restructuring payments plus the actual year-to-date payments for restructuring charges, acquisition-related costs, and litigation costs and settlements. 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.


Page 22
v3.24.3
Document and Entity Information Document
Oct. 29, 2024
Entity Information [Line Items]  
Entity Incorporation, State or Country Code NV
Entity File Number 1-7293
Entity Tax Identification Number 95-2557091
Entity Address, Address Line One 14201 Dallas Parkway
Entity Address, City or Town Dallas
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75254
City Area Code 469
Local Phone Number 893-2200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000070318
Amendment Flag false
Entity Registrant Name TENET HEALTHCARE CORP
Document Type 8-K
Document Period End Date Oct. 29, 2024
New York Stock Exchange | Common Stock [Member]  
Entity Information [Line Items]  
Title of 12(b) Security Common stock, $0.05 par value
Trading Symbol THC
Security Exchange Name NYSE
New York Stock Exchange | 6.875% Senior Notes due 2031  
Entity Information [Line Items]  
Title of 12(b) Security 6.875% Senior Notes due 2031
Trading Symbol THC31
Security Exchange Name NYSE
Tenet Healthcare (NYSE:THC)
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