Tenet Reports Results for the Fourth Quarter and Year Ended December 31, 2018 and Issues Outlook for 2019

Business Wire - finance.yahoo.com Posted 6 years ago

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) $ (2.28 ) Discontinued operations   —     0.01   $ (0.05 ) $ (2.27 ) Diluted Continuing operations $ (0.05 ) $ (2.28 ) Discontinued operations   —     0.01   $ (0.05 ) $ (2.27 ) Weighted average shares and dilutive securities outstanding (in thousands): Basic 102,501 100,945 Diluted* 102,501 100,945  
*   Had we generated income from continuing operations in the three months ended December 31, 2018 and 2017 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,617 thousand and 908 thousand shares, respectively.
 
                   

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
 
 
(Dollars in millions except per share amounts) Years Ended December 31,
2018 % 2017 % Change
Net operating revenues:
Net operating revenues before provision for doubtful accounts $ 20,613
Less: Provision for doubtful accounts   1,434  
Net operating revenues $ 18,313 100.0 % 19,179 100.0 % (4.5 )%
Equity in earnings of unconsolidated affiliates 150 0.8 % 144 0.8 % 4.2 %
Operating expenses:
Salaries, wages and benefits 8,634 47.1 % 9,274 48.4 % (6.9 )%
Supplies 3,004 16.4 % 3,085 16.1 % (2.6 )%
Other operating expenses, net 4,259 23.3 % 4,570 23.8 % (6.8 )%
Electronic health record incentives (3 ) — % (9 ) — % (66.7 )%
Depreciation and amortization 802 4.4 % 870 4.5 %
Impairment and restructuring charges, and acquisition-related costs 209 1.1 % 541 2.8 %
Litigation and investigation costs 38 0.2 % 23 0.1 %
Net gains on sales, consolidation and deconsolidation of facilities   (127 ) (0.7 )%   (144 ) (0.7 )%
Operating income 1,647 9.0 % 1,113 5.8 %
Interest expense (1,004 ) (1,028 )
Other non-operating expense, net (5 ) (22 )
Gain (loss) from early extinguishment of debt   1     (164 )
Income (loss) from continuing operations, before income taxes 639 (101 )
Income tax expense   (176 )   (219 )
Income (loss) from continuing operations, before discontinued operations 463 (320 )
Discontinued operations:
Income (loss) from operations 4 —
Income tax benefit (expense)   (1 )   —  
Income (loss) from discontinued operations   3     —  
Net income (loss) 466 (320 )
Less: Net income available to noncontrolling interests   355     384  
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders $ 111   $ (704 )
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax $ 108 $ (704 )
Income (loss) from discontinued operations, net of tax   3     —  
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders $ 111   $ (704 )
Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations $ 1.06 $ (7.00 )
Discontinued operations   0.03     —  
$ 1.09   $ (7.00 )
Diluted
Continuing operations $ 1.04 $ (7.00 )
Discontinued operations   0.03     —  
$ 1.07   $ (7.00 )
Weighted average shares and dilutive securities outstanding (in thousands):
Basic 102,110 100,592
Diluted* 103,881 100,592
 
*   Had we generated income from continuing operations in the twelve months ended December 31, 2017, the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 788 thousand shares.
 
       

TENET HEALTHCARE CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)
 
 
December 31, December 31,
(Dollars in millions) 2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ 411 $ 611
Accounts receivable, less allowance for doubtful accounts 2,595 2,616
Inventories of supplies, at cost 305 289
Income tax receivable 21 5
Assets held for sale 107 1,017
Other current assets 1,197   1,035  
Total current assets 4,636 5,573
Investments and other assets 1,456 1,543
Deferred income taxes 312 455
Property and equipment, at cost, less accumulated depreciation and amortization 6,993 7,030
Goodwill 7,281 7,018
Other intangible assets, at cost, less accumulated amortization 1,731   1,766  
Total assets $ 22,409   $ 23,385  
 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt $ 182 $ 146
Accounts payable 1,207 1,175
Accrued compensation and benefits 838 848
Professional and general liability reserves 216 200
Accrued interest payable 240 256
Liabilities held for sale 43 480
Other current liabilities 1,131   1,227  
Total current liabilities 3,857 4,332
Long-term debt, net of current portion 14,644 14,791
Professional and general liability reserves 666 654
Defined benefit plan obligations 521 536
Deferred income taxes 36 36
Other long-term liabilities 578   631  
Total liabilities 20,302 20,980
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries 1,420 1,866
Equity:
Shareholders’ equity:
Common stock 7 7
Additional paid-in capital 4,747 4,859
Accumulated other comprehensive loss (223 ) (204 )
Accumulated deficit (2,236 ) (2,390 )
Common stock in treasury, at cost (2,414 ) (2,419 )
Total shareholders’ deficit (119 ) (147 )
Noncontrolling interests 806   686  
Total equity 687   539  
Total liabilities and equity $ 22,409   $ 23,385  
 
   

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)
 
 
Years Ended
(Dollars in millions) December 31,
2018     2017
Net income (loss) $ 466 $ (320 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 802 870
Provision for doubtful accounts — 1,434
Deferred income tax expense 150 200
Stock-based compensation expense 46 59
Impairment and restructuring charges, and acquisition-related costs 209 541
Litigation and investigation costs 38 23
Net gains on sales, consolidation and deconsolidation of facilities (127 ) (144 )
Loss (gain) from early extinguishment of debt (1 ) 164
Equity in earnings of unconsolidated affiliates, net of distributions received (12 ) (18 )
Amortization of debt discount and debt issuance costs 45 44
Pre-tax loss (income) from discontinued operations (4 ) —
Other items, net (21 ) (18 )
Changes in cash from operating assets and liabilities:
Accounts receivable (134 ) (1,448 )
Inventories and other current assets 17 (35 )
Income taxes (3 ) (38 )
Accounts payable, accrued expenses and other current liabilities (152 ) (10 )
Other long-term liabilities (102 ) 26
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements (163 ) (125 )
Net cash used in operating activities from discontinued operations, excluding income taxes (5 ) (5 )
Net cash provided by operating activities 1,049 1,200
Cash flows from investing activities:
Purchases of property and equipment — continuing operations (617 ) (707 )
Purchases of businesses or joint venture interests, net of cash acquired (113 ) (50 )
Proceeds from sales of facilities and other assets 543 827
Proceeds from sales of marketable securities, long-term investments and other assets 199 36
Purchases of equity investments (127 ) (68 )
Other long-term assets 15 (10 )
Other items, net (15 ) (7 )
Net cash provided by (used in) investing activities (115 ) 21
Cash flows from financing activities:
Repayments of borrowings under credit facility (950 ) (970 )
Proceeds from borrowings under credit facility 950 970
Repayments of other borrowings (312 ) (4,139 )
Proceeds from other borrowings 23 3,795
Debt issuance costs — (62 )
Distributions paid to noncontrolling interests (288 ) (258 )
Proceeds from sale of noncontrolling interests 20 31
Purchases of noncontrolling interests (647 ) (729 )
Proceeds from exercise of stock options and employee stock purchase plan 16 7
Other items, net 54   29  
Net cash used in financing activities (1,134 ) (1,326 )
Net decrease in cash and cash equivalents (200 ) (105 )
Cash and cash equivalents at beginning of period 611   716  
Cash and cash equivalents at end of period $ 411   $ 611  
Supplemental disclosures:
Interest paid, net of capitalized interest $ (976 ) $ (939 )
Income tax payments, net $ (25 ) $ (56 )
 
...
       

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1)

(Unaudited)
 
 

(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)

 Three Months Ended December 31, Years Ended December 31,
2018     2017     Change 2018     2017     Change
 
Admissions, Patient Days and Surgeries
Number of hospitals (at end of period) 68 72 (4 ) * 68 72 (4 ) *
Total admissions 170,407 186,185 (8.5 )% 689,367 758,875 (9.2 )%
Adjusted patient admissions 308,113 332,642 (7.4 )% 1,241,241 1,354,266 (8.3 )%
Paying admissions (excludes charity and uninsured) 160,172 176,158 (9.1 )% 648,071 717,498 (9.7 )%
Charity and uninsured admissions 10,235 10,027 2.1 % 41,296 41,377 (0.2 )%
Admissions through emergency department 120,012 123,887 (3.1 )% 476,851 492,660 (3.2 )%
Paying admissions as a percentage of total admissions 94.0 % 94.6 % (0.6 )% * 94.0 % 94.5 % (0.5 )% *
Charity and uninsured admissions as a percentage of total admissions 6.0 % 5.4 % 0.6 % * 6.0 % 5.5 % 0.5 % *
Emergency department admissions as a percentage of total admissions 70.4 % 66.5 % 3.9 % * 69.2 % 64.9 % 4.3 % *
Surgeries — inpatient 45,897 50,292 (8.7 )% 185,020 205,114 (9.8 )%
Surgeries — outpatient 62,638 68,604 (8.7 )% 250,919 276,895 (9.4 )%
Total surgeries 108,535 118,896 (8.7 )% 435,939 482,009 (9.6 )%
Patient days — total 779,728 857,728 (9.1 )% 3,166,815 3,509,056 (9.8 )%
Adjusted patient days 1,383,372 1,505,130 (8.1 )% 5,608,653 6,163,961 (9.0 )%
Average length of stay (days) 4.58 4.61 (0.7 )% 4.59 4.62 (0.7 )%
Licensed beds (at end of period) 17,937 19,141 (6.3 )% 17,937 19,141 (6.3 )%
Average licensed beds 17,935 19,320 (7.2 )% 18,321 19,995 (8.4 )%
Utilization of licensed beds 47.3 % 48.3 % (1.0 )% * 47.4 % 48.1 % (0.7 )% *
Outpatient Visits
Total visits 1,734,523 1,901,864 (8.8 )% 7,049,201 7,791,125 (9.5 )%
Paying visits (excludes charity and uninsured) 1,617,970 1,777,790 (9.0 )% 6,584,502 7,277,514 (9.5 )%
Charity and uninsured visits 116,553 124,074 (6.1 )% 464,699 513,611 (9.5 )%
Emergency department visits 649,544 711,268 (8.7 )% 2,627,829 2,854,200 (7.9 )%
Paying visits as a percentage of total visits 93.3 % 93.5 % (0.2 )% * 93.4 % 93.4 % 0.0 % *
Charity and uninsured visits as a percentage of total visits 6.7 % 6.5 % 0.2 % * 6.6 % 6.6 % 0.0 % *
Total emergency department admissions and visits 769,556 835,155 (7.9 )% 3,104,680 3,346,860 (7.2 )%
Revenues
Net patient revenues(3) $ 3,561 $ 3,860 (7.7 )% $ 14,081 $ 14,829 (5.0 )%
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient revenue(3) per adjusted patient

admission

 $ 11,557 $ 11,604 (0.4 )% $ 11,344 $ 10,950 3.6 %
Net patient revenue(3) per adjusted patient day $ 2,574 $ 2,565 0.4 % $ 2,511 $ 2,406 4.4 %
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2) $ 10,861 $ 10,492 3.5 % $ 10,701 $ 10,384 3.1 %
Net Patient Revenues(3) from:
Medicare 20.1 % 20.4 % (0.3 )% * 20.5 % 21.9 % (1.4 )% *
Medicaid 9.1 % 12.9 % (3.8 )% * 9.2 % 8.8 % 0.4 % *
Managed care 65.8 % 61.5 % 4.3 % * 65.4 % 64.6 % 0.8 % *
Self-pay 0.5 % 1.3 % (0.8 )% * 0.7