• Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $233 million, or $2.25 per diluted share, in the third quarter of 2019, primarily due to a $180 million pre-tax loss, or $1.70 per diluted share, associated with the Company’s debt refinancing transaction in the third quarter of 2019 that reduces future annual cash interest payments and retired all significant debt maturities until April 2022.
• Adjusted diluted earnings per share from continuing operations were $0.58 in the third quarter of 2019, above the high end of the Company’s Outlook.
• Adjusted EBITDA for the third quarter of 2019 was $631 million, which was above the midpoint of the Company’s Outlook. Adjusted EBITDA consisted of $334 million in the Hospital Operations and other segment, $207 million in the Ambulatory Care segment and $90 million in the Conifer segment.
• Hospital segment same-hospital net patient service revenues grew 5.8 percent in the third quarter of 2019: admissions increased 3.6 percent, adjusted admissions increased 2.8 percent and net revenue per adjusted admission increased 2.9 percent. Adjusted EBITDA in the hospital segment grew 7.1 percent.
• Ambulatory Care segment same-facility system-wide surgical revenue grew 6.9 percent in the third quarter of 2019, with surgical cases up 4.4 percent and surgical revenue per case up 2.5 percent. Adjusted EBITDA less facility-level noncontrolling interest increased 17.5 percent.
• Conifer’s Adjusted EBITDA grew 11.1 percent and margins increased 500 basis points to 26.8 percent.
• Updating 2019 Outlook for net operating revenue, net income, earnings per share and Adjusted earnings per share; reiterating previously provided 2019 Outlook for Adjusted EBITDA and Adjusted Free Cash Flow.

DALLAS--(BUSINESS WIRE)-- Tenet Healthcare Corporation (NYSE: THC) today announced its results for the third quarter ended September 30, 2019.

Ronald A. Rittenmeyer, Executive Chairman and CEO, said, “We had a very positive third quarter with performance improvement in each of our operating segments. For the third consecutive quarter, our hospitals delivered accelerating volume growth and we generated strong results at both USPI and Conifer. In addition to driving improvements in our financial results, we made continued steady progress on many of the core initiatives we established for 2019 and discussed at the beginning of the year, including cost savings, physician recruitment, ambulatory acquisitions, marketing and board refreshment. We exceeded the midpoint of our Adjusted EBITDA Outlook in seven of the last eight quarters and exceeded the midpoint of our Adjusted EPS Outlook for eight consecutive quarters. While we have more to accomplish, we have established a solid foundation for growth and performance.”

Rittenmeyer continued, “We also completed a $4.2 billion debt refinancing and increased our line of credit borrowing capacity to $1.5 billion. These actions enhance our financial flexibility, reduce future interest payments and eliminate all significant debt maturities until April 2022.”

Results for the Quarter Ended September 30, 2019

Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $233 million, or $2.25 per diluted share, in the third quarter of 2019, primarily due to the debt refinancing mentioned above, compared to a net loss of $9 million, or $0.09 per diluted share, in the third quarter of 2018.

Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $61 million, or $0.58 per diluted share, in the third quarter of 2019, compared to $30 million, or $0.29 per diluted share, in the third quarter of 2018.

Adjusted EBITDA was $631 million in the third quarter of 2019 compared to $577 million in the third quarter of 2018, an increase of 9.4 percent. Results in the third quarter of 2019 included $8 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 $6 million benefit in the third quarter of 2018. The results for the quarter also included decreased revenue and additional expenses related to Hurricane Dorian as well as a one-time increase in contract labor due to a one-day strike by union nurses at 12 of our hospitals.

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 $3.850 billion in the third quarter of 2019, up 2.3 percent from the third quarter of 2018. The increase in revenue was primarily due to revenue growth on a same-hospital basis, partially offset by hospital divestitures. Revenues included $58 million from the California Provider Fee program in the third quarter of 2019 compared to $71 million in the third quarter of 2018.

On a same-hospital basis, net patient service revenues were $3.562 billion in the third quarter of 2019, up 5.8 percent from the third quarter of 2018. Admissions increased 3.6 percent on a same-hospital basis, adjusted admissions increased 2.8 percent and revenue per adjusted admission increased 2.9 percent. Surgeries grew 0.8 percent and increased 3.2 percent including surgeries performed at a USPI facility located in one of Tenet’s hospital markets.

Adjusted EBITDA in Tenet’s hospital segment was $334 million in the third quarter of 2019, an increase of 7.1 percent compared to $312 million in the third quarter of 2018.

Selected operating expenses in the Hospital Operations and other segment increased just 2.3 percent on a per adjusted admission basis in the third 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.

Ambulatory Care Segment

The Ambulatory Care segment produced net operating revenues of $522 million in the third quarter of 2019, an increase of 4.0 percent compared to $502 million in the third quarter of 2018.

After normalizing for the divestiture of Aspen Healthcare, the Company’s former business in the U.K. which was sold in the third quarter of 2018, the Ambulatory Care segment generated Adjusted EBITDA of $207 million in the third quarter of 2019, up 13.7 percent from $182 million in the third quarter of 2018, and Adjusted EBITDA less facility-level noncontrolling interest was $134 million, up 17.5 percent from $114 million in the third quarter of 2018. Aspen generated $21 million of revenue and $2 million of Adjusted EBITDA and Adjusted EBITDA less facility-level noncontrolling interest in the third 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 348 facilities at September 30, 2019, the results of 111 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 6.9 percent in the third quarter of 2019, with cases increasing 5.1 percent and revenue per case increasing 1.7 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 6.9 percent in the third quarter of 2019, with cases up 4.4 percent and revenue per case up 2.5 percent.

Conifer Segment

Conifer generated $90 million of Adjusted EBITDA in the third quarter of 2019, up 11.1 percent from $81 million in the third quarter of 2018. Adjusted EBITDA margins increased 500 basis points to 26.8 percent primarily due to our continuing cost reduction initiatives.

During the third quarter of 2019, Conifer’s revenue declined 9.4 percent to $336 million, from $371 million in the third quarter of 2018, primarily due to client attrition as a result of hospital divestitures by Tenet and other customers. Revenue from third-party customers declined 12.9 percent to $196 million in the third quarter of 2019.

Results for the Nine Months Ended September 30, 2019

Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $245 million, or $2.37 per diluted share, in the first nine months of 2019 compared to net income of $113 million, or $1.09 per diluted share, in the first nine months of 2018. The 2019 period includes a $227 million pre-tax loss from the extinguishment of debt, or $2.14 per diluted share, including the aforementioned $180 million pre-tax loss, or $1.70 per diluted share, recorded during the third quarter of 2019. The 2018 period included a $111 million pre-tax gain, or $0.84 per diluted share, from the sales, consolidation and deconsolidation of facilities.

Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $176 million, or $1.68 per diluted share, in the first nine months of 2019, compared to $140 million, or $1.35 per diluted share, in the first nine months of 2018.

Adjusted EBITDA was $1.901 billion in the first nine months of 2019 compared to $1.876 billion in the first nine months of 2018, an increase of $25 million or 1.3 percent. Items that lowered the year-over-year growth in Adjusted EBITDA included: (i) a $51 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) the divestiture of Aspen Healthcare, which generated $16 million of Adjusted EBITDA in the first nine months of 2018.

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $11.539 billion in the first nine months of 2019, up 0.8 percent from the first nine months of 2018. Revenues included $187 million from the California Provider Fee program in the first nine months of 2019 compared to $198 million in the first nine months of 2018.

On a same-hospital basis, net patient service revenues were $10.666 billion in the first nine months of 2019, up 4.4 percent from the first nine months of 2018. Admissions increased 2.2 percent on a same-hospital basis in the first nine months of 2019, adjusted admissions increased 1.8 percent and revenue per adjusted admission increased 2.5 percent. Surgeries declined 1.0 percent and increased 1.2 percent including surgeries performed at a USPI facility located in one of Tenet’s hospital markets.

Adjusted EBITDA in Tenet’s hospital segment was $1.018 billion in the first nine months of 2019 compared to $1.059 billion in the first nine months of 2018. The $41 million decline was primarily due to a $51 million year-over-year increase in expense due to a decline in the treasury rate used to discount the Company’s actuarial liabilities.

Selected operating expenses in the Hospital Operations and other segment increased 3.3 percent on a per adjusted admission basis in the first nine months 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.

Ambulatory Care Segment

The Ambulatory Care segment produced net operating revenues of $1.526 billion in the first nine months of 2019, a decrease of 0.3 percent compared to $1.531 billion in the first nine months of 2018. The decline in revenue was due to the divestiture of Aspen Healthcare, which was completed in the third quarter of 2018. Aspen generated $117 million of revenue and $16 million of Adjusted EBITDA and Adjusted EBITDA less facility-level noncontrolling interest in the first nine months of 2018. After normalizing for the divestiture of Aspen, the Ambulatory Care segment generated Adjusted EBITDA of $591 million in the first nine months of 2019, up 11.3 percent from $531 million in the first nine months of 2018 and Adjusted EBITDA less facility-level noncontrolling interest was $378 million, up 12.2 percent from $337 million in the first nine months of 2018.

On a same-facility system-wide basis, revenue in the Ambulatory Care segment increased 5.5 percent in the first nine months of 2019, with cases increasing 3.1 percent and revenue per case increasing 2.3 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 5.5 percent in the first nine months of 2019, with cases up 3.3 percent and revenue per case up 2.1 percent.

Conifer Segment

Conifer generated $292 million of Adjusted EBITDA in the first nine months of 2019, up 8.1 percent from $270 million in the first nine months of 2018. Adjusted EBITDA margins increased 480 basis points to 28.1 percent.

During the first nine months of 2019, Conifer’s revenue declined 10.4 percent to $1.040 billion, from $1.161 billion in the first nine months of 2018 primarily due to client attrition as a result of hospital divestitures by Tenet and other customers. Revenue from third-party customers declined 15.7 percent to $608 million in the first nine months of 2019.

Cash Flow and Liquidity

Cash and cash equivalents were $314 million at September 30, 2019 compared to $249 million at June 30, 2019. The Company had $275 million of outstanding borrowings on its $1.5 billion credit line as of September 30, 2019. Accounts receivable days outstanding from continuing operations were 59.6 at September 30, 2019 compared to 58.4 at June 30, 2019; the increase was primarily due to a short-term disruption in collections in two markets following the consolidation of two local business offices, which is expected to reverse in future periods.

Net cash provided by operating activities was $713 million in the first nine months of 2019, representing an $86 million decrease compared to $799 million in the first nine months of 2018. This decline is due in part to $81 million of interest payments being accelerated into the three months ended September 30, 2019 from the fourth quarter of 2019 ($72 million) and the first quarter of 2020 ($9 million) as a result of our recent debt refinancing transaction. After subtracting $492 million and $404 million of capital expenditures in the first nine months of 2019 and 2018, respectively, Free Cash Flow was $221 million in the first nine months of 2019, a decrease of $174 million compared to Free Cash Flow of $395 million in the first nine months of 2018. Adjusted Free Cash Flow was $361 million in the first nine months of 2019, representing a $151 million decrease from $512 million of Adjusted Free Cash Flow in the first nine months of 2018.

Net cash used in investing activities was $426 million in the first nine months of 2019 compared to $120 million of net cash provided by investing activities in the first nine months of 2018. Results in the first nine months of 2019 included $113 million of proceeds from the sales of facilities, marketable securities, long-term investments and other assets compared to $663 million in the first nine months of 2018.

Net cash used in financing activities was $384 million in the first nine months of 2019 compared to $1.030 billion used in the first nine months of 2018 when the Company invested $630 million in cash to increase its ownership in USPI from 80 percent to 95 percent.

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 $18.350 billion to $18.550 billion,
• Net loss from continuing operations attributable to Tenet common shareholders of $135 million to $230 million,
• Adjusted EBITDA of $2.650 billion to $2.750 billion,
• Net cash provided by operating activities of $1.045 billion to $1.325 billion,
• Adjusted Free Cash Flow of $600 million to $800 million,
• Diluted loss per share from continuing operations of $1.31 to $2.23, and
• Adjusted diluted earnings per share from continuing operations of $2.25 to $2.91.

The Outlook for 2019 assumes California Provider Fee revenues of approximately $246 million, equity in earnings of unconsolidated affiliates of $170 million to $180 million, depreciation and amortization expense of $830 million to $840 million, interest expense of $985 million to $995 million, net income available to noncontrolling interests of $390 million to $410 million and an average diluted share count of 105 million.

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

• Revenue of $4.678 billion to $4.878 billion,
• Net income from continuing operations available to Tenet common shareholders of $15 million to $110 million,
• Adjusted EBITDA of $749 million to $849 million,
• Diluted earnings per share from continuing operations of $0.14 to $1.04, and
• Adjusted diluted earnings per share from continuing operations of $0.57 to $1.23.

The Outlook for the fourth quarter assumes California Provider Fee revenues of approximately $59 million, equity in earnings of unconsolidated affiliates of $56 million to $66 million, depreciation and amortization expense of $203 million to $213 million, interest expense of $243 million to $253 million, net income available to noncontrolling interests of $131 million to $151 million, and an average diluted share count of 106 million.

Additional details on Tenet’s Outlook for both the fourth 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 Third Quarter Results

Tenet management will discuss the Company’s third quarter 2019 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on November 5, 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 September 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 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.

About Tenet Healthcare

Tenet Healthcare Corporation (NYSE: THC) is a 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 care sites and clinics. 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. 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.

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 September 30,
		2019				%			2018				%			Change
Net operating revenues		$	4,568			100.0	%		$	4,489			100.0	%		1.8	%
Equity in earnings of unconsolidated affiliates		38				0.8	%		33				0.7	%		15.2	%
Operating expenses:
Salaries, wages and benefits		2,174				47.7	%		2,116				47.1	%		2.7	%
Supplies		760				16.6	%		726				16.2	%		4.7	%
Other operating expenses, net		1,042				22.8	%		1,094				24.4	%		(4.8	)%
Electronic health record incentives		—				—	%		—				—	%		—	%
Depreciation and amortization		205				4.5	%		204				4.5	%
Impairment and restructuring charges, and acquisition-related costs		46				1.0	%		46				1.0	%
Litigation and investigation costs		84				1.8	%		9				0.2	%
Net losses on sales, consolidation and deconsolidation of facilities		1				—	%		7				0.2	%
Operating income		294				6.4	%		320				7.1	%
Interest expense		(244		)					(249		)
Other non-operating expense, net		(3		)					—
Loss from early extinguishment of debt		(180		)					—
Income (loss) from continuing operations, before income taxes		(133		)					71
Income tax expense		(20		)					(6		)
Income (loss) from continuing operations, before discontinued operations		(153		)					65
Discontinued operations:
Income from operations		1							—
Income tax expense		—							—
Income from discontinued operations		1							—
Net income (loss)		(152		)					65
Less: Net income available to noncontrolling interests		80							74
Net loss attributable to Tenet Healthcare Corporation common shareholders		$	(232	)					$	(9	)
Amounts attributable to Tenet Healthcare Corporation common shareholders
Loss from continuing operations, net of tax		$	(233	)					$	(9	)
Income from discontinued operations, net of tax		1							—
Net loss attributable to Tenet Healthcare Corporation common shareholders		$	(232	)					$	(9	)
Earnings (loss) per share available to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations		$	(2.25	)					$	(0.09	)
Discontinued operations		0.01							—
		$	(2.24	)					$	(0.09	)
Diluted
Continuing operations		$	(2.25	)					$	(0.09	)
Discontinued operations		0.01							—
		$	(2.24	)					$	(0.09	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic		103,558							102,402
Diluted*		103,558							102,402

*

Had we generated income from continuing operations available to common shareholders in the three months ended September 30, 2019 and 2018 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,024 thousand and 2,173 thousand shares, respectively.

TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in millions except per share amounts)		Nine Months Ended September 30,
		2019				%			2018				%			Change
Net operating revenues		$	13,673			100.0	%		$	13,694			100.0	%		(0.2	)%
Equity in earnings of unconsolidated affiliates		114				0.8	%		97				0.7	%		17.5	%
Operating expenses:
Salaries, wages and benefits		6,475				47.4	%		6,478				47.3	%		0.0	%
Supplies		2,254				16.5	%		2,248				16.4	%		0.3	%
Other operating expenses, net		3,160				23.1	%		3,181				23.2	%		(0.7	)%
Electronic health record incentives		(1		)		—	%		(1		)		—	%		—	%
Depreciation and amortization		627				4.6	%		602				4.4	%
Impairment and restructuring charges, and acquisition-related costs		101				0.7	%		123				0.9	%
Litigation and investigation costs		115				0.8	%		28				0.2	%
Net losses (gains) on sales, consolidation and deconsolidation of facilities		3				—	%		(111		)		(0.8	)%
Operating income		1,053				7.7	%		1,243				9.1	%
Interest expense		(742		)					(758		)
Other non-operating expense, net		(3		)					(2		)
Loss from early extinguishment of debt		(227		)					(2		)
Income from continuing operations, before income taxes		81							481
Income tax expense		(67		)					(120		)
Income from continuing operations, before discontinued operations		14							361
Discontinued operations:
Income from operations		13							3
Income tax expense		(2		)					—
Income from discontinued operations		11							3
Net income		25							364
Less: Net income available to noncontrolling interests		259							248
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(234	)					$	116
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax		$	(245	)					$	113
Income from discontinued operations, net of tax		11							3
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(234	)					$	116
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations		$	(2.37	)					$	1.11
Discontinued operations		0.11							0.03
		$	(2.26	)					$	1.14
Diluted
Continuing operations		$	(2.37	)					$	1.09
Discontinued operations		0.11							0.03
		$	(2.26	)					$	1.12
Weighted average shares and dilutive securities outstanding (in thousands):
Basic		103,181							101,980
Diluted*		103,181							103,802

*

Had we generated income from continuing operations available to common shareholders in the nine months ended September 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 1,403 thousand shares.

TENET HEALTHCARE CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
		September 30,				December 31,
(Dollars in millions)		2019				2018
ASSETS
Current assets:
Cash and cash equivalents		$	314			$	411
Accounts receivable		2,768				2,595
Inventories of supplies, at cost		311				305
Income tax receivable		18				21
Assets held for sale		—				107
Other current assets		1,378				1,197
Total current assets		4,789				4,636
Investments and other assets		2,380				1,456
Deferred income taxes		252				312
Property and equipment, at cost, less accumulated depreciation and amortization		7,001				6,993
Goodwill		7,315				7,281
Other intangible assets, at cost, less accumulated amortization		1,620				1,731
Total assets		$	23,357			$	22,409
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt		$	165			$	182
Accounts payable		1,125				1,207
Accrued compensation and benefits		842				838
Professional and general liability reserves		230				216
Accrued interest payable		252				240
Liabilities held for sale		—				43
Other current liabilities		1,314				1,131
Total current liabilities		3,928				3,857
Long-term debt, net of current portion		14,858				14,644
Professional and general liability reserves		671				666
Defined benefit plan obligations		495				521
Deferred income taxes		36				36
Other long-term liabilities		1,405				578
Total liabilities		21,393				20,302
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries		1,475				1,420
Equity:
Shareholders’ equity:
Common stock		7				7
Additional paid-in capital		4,751				4,747
Accumulated other comprehensive loss		(216		)		(223		)
Accumulated deficit		(2,469		)		(2,236		)
Common stock in treasury, at cost		(2,414		)		(2,414		)
Total shareholders’ deficit		(341		)		(119		)
Noncontrolling interests		830				806
Total equity		489				687
Total liabilities and equity		$	23,357			$	22,409

TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		Nine Months Ended
(Dollars in millions)		September 30,
		2019				2018
Net income		$	25			$	364
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		627				602
Deferred income tax expense		57				110
Stock-based compensation expense		34				34
Impairment and restructuring charges, and acquisition-related costs		101				123
Litigation and investigation costs		115				28
Net losses (gains) on sales, consolidation and deconsolidation of facilities		3				(111		)
Loss from early extinguishment of debt		227				2
Equity in earnings of unconsolidated affiliates, net of distributions received		(6		)		9
Amortization of debt discount and debt issuance costs		25				33
Pre-tax income from discontinued operations		(13		)		(3		)
Other items, net		(14		)		(22		)
Changes in cash from operating assets and liabilities:
Accounts receivable		(174		)		(36		)
Inventories and other current assets		(98		)		73
Income taxes		(4		)		(14		)
Accounts payable, accrued expenses and other current liabilities		(37		)		(194		)
Other long-term liabilities		(15		)		(82		)
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements		(136		)		(113		)
Net cash used in operating activities from discontinued operations, excluding income taxes		(4		)		(4		)
Net cash provided by operating activities		713				799
Cash flows from investing activities:
Purchases of property and equipment — continuing operations		(492		)		(404		)
Purchases of businesses or joint venture interests, net of cash acquired		(23		)		(97		)
Proceeds from sales of facilities and other assets — continuing operations		44				498
Proceeds from sales of facilities and other assets — discontinued operations		17				—
Proceeds from sales of marketable securities, long-term investments and other assets		52				165
Purchases of equity investments		(14		)		(43		)
Other long-term assets		1				5
Other items, net		(11		)		(4		)
Net cash provided by (used in) investing activities		(426		)		120
Cash flows from financing activities:
Repayments of borrowings under credit facility		(1,880		)		(505		)
Proceeds from borrowings under credit facility		2,155				505
Repayments of other borrowings		(6,084		)		(238		)
Proceeds from other borrowings		5,718				15
Debt issuance costs		(63		)		—
Distributions paid to noncontrolling interests		(223		)		(217		)
Proceeds from sales of noncontrolling interests		15				14
Purchases of noncontrolling interests		(8		)		(643		)
Proceeds from exercise of stock options and employee stock purchase plan		4				15
Other items, net		(18		)		24
Net cash used in financing activities		(384		)		(1,030		)
Net decrease in cash and cash equivalents		(97		)		(111		)
Cash and cash equivalents at beginning of period		411				611
Cash and cash equivalents at end of period		$	314			$	500
Supplemental disclosures:
Interest paid, net of capitalized interest		$	(705	)		$	(652	)
Income tax payments, net		$	(18	)		$	(24	)

TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) (Unaudited)
(Dollars in millions except per adjusted patient day		Three Months Ended September 30,											Nine Months Ended September 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		170,004				168,201				1.1	%		514,082				518,960				(0.9	)%
Adjusted patient admissions		306,535				306,197				0.1	%		918,734				933,128				(1.5	)%
Paying admissions (excludes charity and uninsured)		159,299				157,193				1.3	%		483,220				487,899				(1.0	)%
Charity and uninsured admissions		10,705				11,008				(2.8	)%		30,862				31,061				(0.6	)%
Admissions through emergency department		120,915				116,727				3.6	%		368,082				356,839				3.2	%
Paying admissions as a percentage of total admissions		93.7		%		93.5		%		0.2	%	*	94.0		%		94.0		%		—	%	*
Charity and uninsured admissions as a percentage of total admissions		6.3		%		6.5		%		(0.2	)%	*	6.0		%		6.0		%		—	%	*
Emergency department admissions as a percentage of total admissions		71.1		%		69.4		%		1.7	%	*	71.6		%		68.8		%		2.8	%	*
Surgeries — inpatient		45,637				45,626				—	%		135,073				139,123				(2.9	)%
Surgeries — outpatient		60,099				61,468				(2.2	)%		179,253				188,281				(4.8	)%
Total surgeries		105,736				107,094				(1.3	)%		314,326				327,404				(4.0	)%
Patient days — total		782,643				761,920				2.7	%		2,392,304				2,387,087				0.2	%
Adjusted patient days		1,381,862				1,365,662				1.2	%		4,189,961				4,225,281				(0.8	)%
Average length of stay (days)		4.60				4.53				1.5	%		4.65				4.60				1.1	%
Licensed beds (at end of period)		17,206				18,302				(6.0	)%		17,206				18,302				(6.0	)%
Average licensed beds		17,208				18,302				(6.0	)%		17,295				18,450				(6.3	)%
Utilization of licensed beds		49.4		%		45.3		%		4.1	%	*	50.7		%		47.4		%		3.3	%	*
Outpatient Visits
Total visits		1,673,801				1,722,292				(2.8	)%		5,081,998				5,314,678				(4.4	)%
Paying visits (excludes charity and uninsured)		1,562,007				1,607,184				(2.8	)%		4,747,249				4,966,532				(4.4	)%
Charity and uninsured visits		111,794				115,108				(2.9	)%		334,749				348,146				(3.8	)%
Emergency department visits		627,055				638,248				(1.8	)%		1,921,611				1,978,285				(2.9	)%
Paying visits as a percentage of total visits		93.3		%		93.3		%		—	%	*	93.4		%		93.4		%		—	%	*
Charity and uninsured visits as a percentage of total visits		6.7		%		6.7		%		—	%	*	6.6		%		6.6		%		—	%	*
Total emergency department admissions and visits		747,970				754,975				(0.9	)%		2,289,693				2,335,124				(1.9	)%
Revenues
Net patient service revenues(3)		$	3,566			$	3,434			3.8	%		$	10,695			$	10,520			1.7	%
Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis
Net patient service revenue(3) per adjusted patient admission		$	11,633			$	11,215			3.7	%		$	11,641			$	11,274			3.3	%
Net patient service revenue(3) per adjusted patient day		$	2,581			$	2,515			2.6	%		$	2,553			$	2,490			2.5	%
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)		$	11,021			$	10,771			2.3	%		$	10,996			$	10,648			3.3	%
Net patient service revenues(3) from:
Medicare		19.6		%		19.8		%		(0.2	)%	*	20.4		%		20.6		%		(0.2	)%	*
Medicaid		8.0		%		9.8		%		(1.8	)%	*	8.6		%		9.2		%		(0.6	)%	*
Managed care		66.1		%		64.9		%		1.2	%	*	65.8		%		65.3		%		0.5	%	*
Uninsured		1.2		%		0.9		%		0.3	%	*	0.5		%		0.7		%		(0.2	)%	*
Indemnity and other		5.1		%		4.6		%		0.5	%	*	4.7		%		4.2		%		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 September 30,											Nine Months Ended September 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		170,004				164,075				3.6	%		512,826				501,662				2.2	%
Adjusted patient admissions		306,535				298,221				2.8	%		916,472				899,826				1.8	%
Paying admissions (excludes charity and uninsured)		159,300				153,227				4.0	%		482,061				471,282				2.3	%
Charity and uninsured admissions		10,704				10,848				(1.3	)%		30,765				30,380				1.3	%
Admissions through emergency department		120,915				113,833				6.2	%		367,231				345,692				6.2	%
Paying admissions as a percentage of total admissions		93.7		%		93.4		%		0.3	%		94.0		%		93.9		%		0.1	%	*
Charity and uninsured admissions as a percentage of total admissions		6.3		%		6.6		%		(0.3	)%		6.0		%		6.1		%		(0.1	)%	*
Emergency department admissions as a percentage of total admissions		71.1		%		69.4		%		1.7	%		71.6		%		68.9		%		2.7	%	*
Surgeries — inpatient		45,637				44,783				1.9	%		134,831				135,026				(0.1	)%
Surgeries — outpatient		60,099				60,080				—	%		178,931				182,005				(1.7	)%
Total surgeries		105,736				104,863				0.8	%		313,762				317,031				(1.0	)%
Patient days — total		782,643				740,870				5.6	%		2,385,554				2,301,312				3.7	%
Adjusted patient days		1,381,862				1,325,229				4.3	%		4,177,844				4,060,712				2.9	%
Average length of stay (days)		4.60				4.52				1.8	%		4.65				4.59				1.3	%
Licensed beds (at end of period)		17,206				17,234				(0.2	)%		17,206				17,234				(0.2	)%
Average licensed beds		17,208				17,234				(0.2	)%		17,217				17,242				(0.1	)%
Utilization of licensed beds		49.4		%		46.7		%		2.7	%		50.8		%		48.9		%		1.9	%	*
Outpatient Visits
Total visits		1,673,801				1,647,013				1.6	%		5,054,470				5,036,965				0.3	%
Paying visits (excludes charity and uninsured)		1,562,010				1,536,247				1.7	%		4,721,200				4,704,391				0.4	%
Charity and uninsured visits		111,791				110,766				0.9	%		333,270				332,574				0.2	%
Emergency department visits		627,055				617,925				1.5	%		1,916,014				1,904,545				0.6	%
Paying visits as a percentage of total visits		93.3		%		93.3		%		—	%		93.4		%		93.4		%		—	%	*
Charity and uninsured visits as a percentage of total visits		6.7		%		6.7		%		—	%		6.6		%		6.6		%		—	%	*
Total emergency department admissions and visits		747,970				731,758				2.2	%		2,283,245				2,250,237				1.5	%
Revenues
Net patient service revenues(2)		$	3,562			$	3,367			5.8	%		$	10,666			$	10,217			4.4	%
Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis
Net patient service revenue(2) per adjusted patient admission		$	11,620			$	11,290			2.9	%		$	11,638			$	11,354			2.5	%
Net patient service revenue(2) per adjusted patient day		$	2,578			$	2,541			1.5	%		$	2,553			$	2,516			1.5	%
Net patient service revenues(2) from:
Medicare		19.5		%		19.5		%		—	%		20.2		%		20.2		%		—	%	*
Medicaid		8.0		%		9.8		%		(1.8	)%		8.6		%		9.1		%		(0.5	)%	*
Managed care		66.2		%		65.2		%		1.0	%		65.9		%		65.6		%		0.3	%	*
Uninsured		1.2		%		0.9		%		0.3	%		0.5		%		0.8		%		(0.3	)%	*
Indemnity and other		5.1		%		4.6		%		0.5	%		4.8		%		4.3		%		0.5	%	*

(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 nine months ended September 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												Nine Months Ended
		3/31/2019				6/30/2019				9/30/2019				9/30/2019
Net operating revenues		$	4,545			$	4,560			$	4,568			$	13,673
Equity in earnings of unconsolidated affiliates		34				42				38				114
Operating expenses:
Salaries, wages and benefits		2,153				2,148				2,174				6,475
Supplies		741				753				760				2,254
Other operating expenses, net		1,074				1,044				1,042				3,160
Electronic health record incentives		(1		)		—				—				(1		)
Depreciation and amortization		208				214				205				627
Impairment and restructuring charges, and acquisition-related costs		19				36				46				101
Litigation and investigation costs		13				18				84				115
Net losses on sales, consolidation and deconsolidation of facilities		1				1				1				3
Operating income		371				388				294				1,053
Interest expense		(251		)		(247		)		(244		)		(742		)
Other non-operating income (expense), net		1				(1		)		(3		)		(3		)
Loss from early extinguishment of debt		(47		)		—				(180		)		(227		)
Income (loss) from continuing operations, before income taxes		74				140				(133		)		81
Income tax expense		(17		)		(30		)		(20		)		(67		)
Income (loss) from continuing operations, before discontinued operations		57				110				(153		)		14
Discontinued operations:
Income from operations		10				2				1				13
Income tax expense		(2		)		—				—				(2		)
Income from discontinued operations		8				2				1				11
Net income (loss)		65				112				(152		)		25
Less: Net income available to noncontrolling interests		84				95				80				259
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(19	)		$	17			$	(232	)		$	(234	)
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax		$	(27	)		$	15			$	(233	)		$	(245	)
Income from discontinued operations, net of tax		8				2				1				11
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(19	)		$	17			$	(232	)		$	(234	)
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations		$	(0.26	)		$	0.15			$	(2.25	)		$	(2.37	)
Discontinued operations		0.08				0.02				0.01				0.11
		$	(0.18	)		$	0.17			$	(2.24	)		$	(2.26	)
Diluted
Continuing operations		$	(0.26	)		$	0.14			$	(2.25	)		$	(2.37	)
Discontinued operations		0.08				0.02				0.01				0.11
		$	(0.18	)		$	0.16			$	(2.24	)		$	(2.26	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic		102,788				103,198				103,558				103,181
Diluted		102,788				104,629				103,558				103,181

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												Nine Months Ended
		3/31/2019				6/30/2019				9/30/2019				09/30/2019
Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)		65				65				65				65
Total admissions		174,726				169,352				170,004				514,082
Adjusted patient admissions		308,133				304,066				306,535				918,734
Paying admissions (excludes charity and uninsured)		164,793				159,128				159,299				483,220
Charity and uninsured admissions		9,933				10,224				10,705				30,862
Admissions through emergency department		126,079				121,088				120,915				368,082
Paying admissions as a percentage of total admissions		94.3		%		94.0		%		93.7		%		94.0		%
Charity and uninsured admissions as a percentage of total admissions		5.7		%		6.0		%		6.3		%		6.0		%
Emergency department admissions as a percentage of total admissions		72.2		%		71.5		%		71.1		%		71.6		%
Surgeries — inpatient		44,795				44,641				45,637				135,073
Surgeries — outpatient		58,218				60,936				60,099				179,253
Total surgeries		103,013				105,577				105,736				314,326
Patient days — total		822,079				787,582				782,643				2,392,304
Adjusted patient days		1,420,170				1,387,929				1,381,862				4,189,961
Average length of stay (days)		4.70				4.65				4.60				4.65
Licensed beds (at end of period)		17,221				17,221				17,206				17,206
Average licensed beds		17,455				17,221				17,208				17,295
Utilization of licensed beds		52.3		%		50.3		%		49.4		%		50.7		%
Outpatient Visits
Total visits		1,714,392				1,693,805				1,673,801				5,081,998
Paying visits (excludes charity and uninsured)		1,603,712				1,581,530				1,562,007				4,747,249
Charity and uninsured visits		110,680				112,275				111,794				334,749
Emergency department visits		657,449				637,107				627,055				1,921,611
Paying visits as a percentage of total visits		93.5		%		93.4		%		93.3		%		93.4		%
Charity and uninsured visits as a percentage of total visits		6.5		%		6.6		%		6.7		%		6.6		%
Total emergency department admissions and visits		783,528				758,195				747,970				2,289,693
Revenues
Net patient service revenues(3)		$	3,582			$	3,547			$	3,566			$	10,695
Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis
Net patient service revenue(3) per adjusted patient admission		$	11,625			$	11,665			$	11,633			$	11,641
Net patient service revenue(3) per adjusted patient day		$	2,522			$	2,556			$	2,581			$	2,553
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)		$	10,979			$	10,988			$	11,021			$	10,996
Net patient service revenues(3) from:
Medicare		21.2		%		20.3		%		19.6		%		20.4		%
Medicaid		8.8		%		8.9		%		8.0		%		8.6		%
Managed care		65.7		%		65.7		%		66.1		%		65.8		%
Uninsured		—		%		0.3		%		1.2		%		0.5		%
Indemnity and other		4.3		%		4.8		%		5.1		%		4.7		%

(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 Per Adjusted Patient Admission and Per Adjusted Patient Day Basis
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												Nine Months Ended
		3/31/2019				6/30/2019				9/30/2019				9/30/2019
Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)		65				65				65				65
Total admissions		173,470				169,352				170,004				512,826
Adjusted patient admissions		305,871				304,066				306,535				916,472
Paying admissions (excludes charity and uninsured)		163,632				159,129				159,300				482,061
Charity and uninsured admissions		9,838				10,223				10,704				30,765
Admissions through emergency department		125,228				121,088				120,915				367,231
Paying admissions as a percentage of total admissions		94.3		%		94.0		%		93.7		%		94.0		%
Charity and uninsured admissions as a percentage of total admissions		5.7		%		6.0		%		6.3		%		6.0		%
Emergency department admissions as a percentage of total admissions		72.2		%		71.5		%		71.1		%		71.6		%
Surgeries — inpatient		44,553				44,641				45,637				134,831
Surgeries — outpatient		57,896				60,936				60,099				178,931
Total surgeries		102,449				105,577				105,736				313,762
Patient days — total		815,329				787,582				782,643				2,385,554
Adjusted patient days		1,408,053				1,387,929				1,381,862				4,177,844
Average length of stay (days)		4.70				4.65				4.60				4.65
Licensed beds (at end of period)		17,221				17,221				17,206				17,206
Average licensed beds		17,221				17,221				17,208				17,217
Utilization of licensed beds		52.6		%		50.3		%		49.4		%		50.8		%
Outpatient Visits
Total visits		1,686,864				1,693,805				1,673,801				5,054,470
Paying visits (excludes charity and uninsured)		1,577,635				1,581,555				1,562,010				4,721,200
Charity and uninsured visits		109,229				112,250				111,791				333,270
Emergency department visits		651,852				637,107				627,055				1,916,014
Paying visits as a percentage of total visits		93.5		%		93.4		%		93.3		%		93.4		%
Charity and uninsured visits as a percentage of total visits		6.5		%		6.6		%		6.7		%		6.6		%
Total emergency department admissions and visits		777,080				758,195				747,970				2,283,245
Revenues
Net patient service revenues(2)		$	3,557			$	3,547			$	3,562			$	10,666
Revenues Per Adjusted Patient Admission and Per Adjusted Patient Day Basis
Net patient service revenue(2) per adjusted patient admission		$	11,629			$	11,665			$	11,620			$	11,638
Net patient service revenue(2) per adjusted patient day		$	2,526			$	2,556			$	2,578			$	2,553
Net patient service revenues(2) from:
Medicare		21.0		%		20.3		%		19.5		%		20.2		%
Medicaid		8.8		%		8.9		%		8.0		%		8.6		%
Managed care		65.9		%		65.7		%		66.2		%		65.9		%
Uninsured		—		%		0.3		%		1.2		%		0.5		%
Indemnity and other		4.3		%		4.8		%		5.1		%		4.8		%

(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 nine months ended September 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 Per Adjusted Patient Admission and Per Adjusted Patient Day Basis
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 nine months ended September 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)										September 30,				December 31,
										2019				2018
Assets
Hospital Operations and other										$	16,202			$	15,684
Ambulatory Care										6,100				5,711
Conifer										1,055				1,014
Total										$	23,357			$	22,409
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2019				2018				2019				2018
Capital expenditures:
Hospital Operations and other		$	135			$	115			$	423			$	343
Ambulatory Care		16				18				57				46
Conifer		5				3				12				15
Total		$	156			$	136			$	492			$	404
Net operating revenues:
Hospital Operations and other total prior to inter-segment eliminations(1)		$	3,850			$	3,762			$	11,539			$	11,442
Ambulatory Care		522				502				1,526				1,531
Conifer
Tenet		140				146				432				440
Other customers		196				225				608				721
Total Conifer revenues		336				371				1,040				1,161
Inter-segment eliminations		(140		)		(146		)		(432		)		(440		)
Total		$	4,568			$	4,489			$	13,673			$	13,694
Equity in earnings of unconsolidated affiliates:
Hospital Operations and other		$	1			$	2			$	12			$	6
Ambulatory Care		37				31				102				91
Total		$	38			$	33			$	114			$	97
Adjusted EBITDA:
Hospital Operations and other(2)		$	334			$	312			$	1,018			$	1,059
Ambulatory Care		207				184				591				547
Conifer		90				81				292				270
Total		$	631			$	577			$	1,901			$	1,876
Depreciation and amortization:
Hospital Operations and other		$	175			$	175			$	539			$	514
Ambulatory Care		19				17				55				51
Conifer		11				12				33				37
Total		$	205			$	204			$	627			$	602

(1)	Hospital Operations and other revenues includes health plan revenues of less than $1 million and approximately $1 million for the three and nine months ended September 30, 2019, respectively, and $8 million and $14 million for the three and nine months ended September 30, 2018, respectively.
(2)	Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of $(1) million and $(2) million for the three and nine months ended September 30, 2019, respectively, and $9 million for both of the three and nine months ended September 30, 2018.

TENET HEALTHCARE CORPORATION STATEMENTS OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited)
(Dollars in millions)		Three Months Ended September 30,
		2019								2018
		Ambulatory Care as Reported Under GAAP				Unconsolidated Affiliates				Ambulatory Care as Reported Under GAAP				Unconsolidated Affiliates
Net operating revenues(1)		$	522			$	622			$	502			$	546
Equity in earnings of unconsolidated affiliates(2)		37				—				31				—
Operating expenses:
Salaries, wages and benefits		157				159				157				137
Supplies		109				160				104				143
Other operating expenses, net		86				120				88				114
Depreciation and amortization		19				20				17				18
Litigation and investigation costs		68				—				—				—
Impairment and restructuring charges, and acquisition-related costs		7				(2		)		13				—
Net losses on sales, consolidation and deconsolidation of facilities		1				1				—				—
Operating income		112				164				154				134
Interest expense		(31		)		(6		)		(33		)		(7		)
Other		3				—				3				—
Net income from continuing operations, before income taxes		84				158				124				127
Income tax expense		(13		)		(2		)		(14		)		(2		)
Net income		71				$	156			110				$	125
Less: Net income available to noncontrolling interests		73								70
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(2	)						$	40
Equity in earnings of unconsolidated affiliates						$	37							$	31

(1)

On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 6.9% during the three months ended September 30, 2019, with cases increasing 5.1% and revenue per case increasing 1.7%.

(2)

At September 30, 2019, 111 of the 348 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 237 facilities and account for these investments as consolidated subsidiaries.

TENET HEALTHCARE CORPORATION STATEMENTS OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited)
(Dollars in millions)		Nine Months Ended September 30,
		2019								2018
		Ambulatory Care as Reported Under GAAP				Unconsolidated Affiliates				Ambulatory Care as Reported Under GAAP				Unconsolidated Affiliates
Net operating revenues(1)		$	1,526			$	1,809			$	1,531			$	1,586
Equity in earnings of unconsolidated affiliates(2)		102				—				91				—
Operating expenses:
Salaries, wages and benefits		467				462				484				391
Supplies		316				470				316				417
Other operating expenses, net		254				377				275				333
Depreciation and amortization		55				62				51				51
Litigation and investigation costs		68				—				—				—
Impairment and restructuring charges, and acquisition-related costs		12				(2		)		20				—
Net gains on sales, consolidation and deconsolidation of facilities		(2		)		(25		)		(1		)		—
Operating income		458				465				477				394
Interest expense		(94		)		(19		)		(106		)		(17		)
Other		9				6				6				1
Net income from continuing operations, before income taxes		373				452				377				378
Income tax expense		(48		)		(6		)		(47		)		(6		)
Net income		325				$	446			330				$	372
Less: Net income available to noncontrolling interests		219								209
Net income available to Tenet Healthcare Corporation common shareholders		$	106							$	121
Equity in earnings of unconsolidated affiliates						$	102							$	91

(1)

On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 5.5% during the nine months ended September 30, 2019, with cases increasing 3.1% and revenue per case increasing 2.3%.

(2)

At September 30, 2019, 111 of the 348 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 237 facilities and account for these investments as consolidated subsidiaries.

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				3rd Qtr				YTD
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(19	)		$	17			$	(232	)		$	(234	)
Less: Net income available to noncontrolling interests		(84		)		(95		)		(80		)		(259		)
Income from discontinued operations, net of tax		8				2				1				11
Income (loss) from continuing operations		57				110				(153		)		14
Income tax expense		(17		)		(30		)		(20		)		(67		)
Loss from early extinguishment of debt		(47		)		—				(180		)		(227		)
Other non-operating income (expense), net		1				(1		)		(3		)		(3		)
Interest expense		(251		)		(247		)		(244		)		(742		)
Operating income		371				388				294				1,053
Litigation and investigation costs		(13		)		(18		)		(84		)		(115		)
Net losses on sales, consolidation and deconsolidation of facilities		(1		)		(1		)		(1		)		(3		)
Impairment and restructuring charges, and acquisition-related costs		(19		)		(36		)		(46		)		(101		)
Depreciation and amortization		(208		)		(214		)		(205		)		(627		)
Loss from divested and closed businesses		(1		)		—				(1		)		(2		)
Adjusted EBITDA		$	613			$	657			$	631			$	1,901
Net operating revenues		$	4,545			$	4,560			$	4,568			$	13,673
Less: Net operating revenues from health plans		—				1				—				1
Adjusted net operating revenues		$	4,545			$	4,559			$	4,568			$	13,672
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders as a % of net operating revenues		(0.4		)%		0.4		%		(5.1		)%		(1.7		)%
Adjusted EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA margin)		13.5		%		14.4		%		13.8		%		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				3rd Qtr				YTD
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	(19	)		$	17			$	(232	)		$	(234	)
Net income from discontinued operations		8				$	2			1				11
Net income (loss) from continuing operations		(27		)		15				(233		)		(245		)
Less: Impairment and restructuring charges, and acquisition-related costs		(19		)		(36		)		(46		)		(101		)
Litigation and investigation costs		(13		)		(18		)		(84		)		(115		)
Net losses on sales, consolidation and deconsolidation of facilities		(1		)		(1		)		(1		)		(3		)
Loss from early extinguishment of debt		(47		)		—				(180		)		(227		)
Loss from divested and closed businesses		(1		)		—				(1		)		(2		)
Noncontrolling interest impact		—				—				4				4
Tax impact of above items		(2		)		11				14				23
Adjusted net income available from continuing operations to common shareholders		$	56			$	59			$	61			$	176
Diluted earnings (loss) per share from continuing operations		$	(0.26	)		$	0.14			$	(2.25	)		$	(2.37	)
Less: Impairment and restructuring charges, and acquisition-related costs		(0.18		)		(0.35		)		(0.44		)		(0.97		)
Litigation and investigation costs		(0.12		)		(0.17		)		(0.80		)		(1.10		)
Net losses on sales, consolidation and deconsolidation of facilities		(0.01		)		(0.01		)		(0.01		)		(0.03		)
Loss from early extinguishment of debt		(0.45		)		—				(1.72		)		(2.17		)
Loss from divested and closed businesses		(0.01		)		—				(0.01		)		(0.02		)
Noncontrolling interest impact		—				—				0.04				0.04
Tax impact of above items		(0.02		)		0.11				0.13				0.22
Adjusted diluted earnings per share from continuing operations		$	0.54			$	0.56			$	0.58			$	1.68
Weighted average basic shares outstanding (in thousands)		102,788				103,198				103,558				103,181
Weighted average dilutive shares outstanding (in thousands)		104,541				104,629				104,582				104,584

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				3rd Qtr				YTD
Net cash provided by operating activities		$	10			$	284			$	419			$	713
Purchases of property and equipment		(192		)		(144		)		(156		)		(492		)
Free cash flow		$	(182	)		$	140			$	263			$	221
Net cash used in investing activities		$	(139	)		$	(164	)		$	(123	)		$	(426	)
Net cash used in financing activities		$	(30	)		$	(123	)		$	(231	)		$	(384	)
Net cash provided by operating activities		$	10			$	284			$	419			$	713
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements		(32		)		(48		)		(56		)		(136		)
Net cash used in operating activities from discontinued operations		(2		)		(3		)		1				(4		)
Adjusted net cash provided by operating activities from continuing operations		44				335				474				853
Purchases of property and equipment		(192		)		(144		)		(156		)		(492		)
Adjusted free cash flow – continuing operations		$	(148	)		$	191			$	318			$	361

(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)		Q4 2019								2019
		Low				High				Low				High
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	14			$	109			$	(220	)		$	(125	)
Less: Net income available to noncontrolling interests		(131		)		(151		)		(390		)		(410		)
Net income (loss) from discontinued operations, net of tax		(1		)		(1		)		10				10
Income tax expense		(83		)		(93		)		(150		)		(160		)
Interest expense		(253		)		(243		)		(995		)		(985		)
Loss from early extinguishment of debt(1)		—				—				(227		)		(227		)
Other non-operating expense, net		(2		)		(7		)		(5		)		(10		)
Net losses on sales, consolidation and deconsolidation of facilities(1)		—				—				(3		)		(3		)
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(2)		(59		)		(34		)		(275		)		(250		)
Depreciation and amortization		(203		)		(213		)		(830		)		(840		)
Loss from divested and closed businesses		(3		)		2				(5		)		—
Adjusted EBITDA		$	749			$	849			$	2,650			$	2,750
Income (loss) from continuing operations		$	15			$	110			$	(230	)		$	(135	)
Net operating revenues		$	4,678			$	4,878			$	18,350			$	18,550
Income (loss) from continuing operations as a % of operating revenues		0.3		%		2.3		%		(1.3		)%		(0.7		)%
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)		16.0		%		17.4		%		14.4		%		14.8		%

(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)		Q4 2019								2019
		Low				High				Low				High
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders		$	14			$	109			$	(220	)		$	(125	)
Net income (loss) from discontinued operations, net of tax		(1		)		(1		)		10				10
Net income (loss) from continuing operations		15				110				(230		)		(135		)
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements		(59		)		(34		)		(275		)		(250		)
Net losses on sales, consolidation and deconsolidation of facilities		—				—				(3		)		(3		)
Loss from early extinguishment of debt		—				—				(227		)		(227		)
Loss from divested and closed businesses		(3		)		2				(5		)		—
Tax impact of above items		17				12				40				35
Noncontrolling interests impact of above items		—				—				4				4
Adjusted net income available from continuing operations to common shareholders		$	60			$	130			$	236			$	306
Diluted earnings (loss) per share from continuing operations		$	0.14			$	1.04			$	(2.23	)		$	(1.31	)
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements		(0.56		)		(0.32		)		(2.62		)		(2.38		)
Net losses on sales, consolidation and deconsolidation of facilities		—				—				(0.03		)		(0.03		)
Loss from early extinguishment of debt		—				—				(2.16		)		(2.16		)
Loss from divested and closed businesses		(0.03		)		0.02				(0.05		)		—
Tax impact of above items		0.16				0.11				0.38				0.33
Noncontrolling interests impact of above items		—				—				0.04				0.04
Adjusted diluted earnings per share from continuing operations		$	0.57			$	1.23			$	2.25			$	2.91
Weighted average basic shares outstanding (in thousands)		104,000				104,000				103,000				103,000
Weighted average dilutive shares outstanding (in thousands)		106,000				106,000				105,000				105,000

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								$	1,045			$	1,325
Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1)								(200		)		(175		)
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.

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Source: Tenet Healthcare Corporation