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THC · Tenet Healthcare

32 filings

10-K

THC 10-K Annual Reports

Tenet Healthcare - 32 annual reports

Filing record · 2016–202610-K1110-Q338-K176

2025
Tenet Healthcare Annual Report, Year Ended Dec 31, 2025
Tenet Healthcare Corporation (THC) reported net operating revenues of $21.31 billion for 2025, up $635 million, or 3.1%, from $20.68 billion in 2024. Operating income fell to $3.508 billion from $5.956 billion, largely because 2024 included $2.916 billion of net gains on sales of facilities, primarily the Divested Hospitals. Net income available to Tenet common shareholders was $1.407 billion, or $15.49 diluted EPS, versus $3.200 billion, or $32.70, in 2024. Net cash provided by operating activities rose to $3.540 billion from $2.047 billion, and the company repurchased $1.386 billion of its common stock during the year. The Hospital Operations segment ran 50 acute care and specialty hospitals in eight states and generated $16.138 billion of net operating revenues, roughly flat year over year, with segment operating income of $1.730 billion. Ambulatory Care, operated through USPI, held interests in 533 ASCs and 26 surgical hospitals and grew net operating revenues 14.1% to $5.172 billion, with segment operating income of $1.778 billion. Management cites a more favorable payer mix, higher acuity and commercial rate increases as drivers, while flagging significant headwinds from the expiration of enhanced ACA premium tax credits at the end of 2025 and the One Big Beautiful Bill Act, whose most consequential Medicaid provisions take effect in 2027. The balance sheet shows $13.171 billion of total long-term debt and $2.883 billion of cash at year-end. In November 2025 the company issued $1.500 billion of 5.500% senior secured notes due 2032 and $750 million of 6.000% senior notes due 2033, and used the proceeds with cash on hand to redeem the February 2027 second lien notes and $750 million of the October 2028 notes. In January 2026 Tenet agreed with CommonSpirit Health to end the Conifer revenue cycle services agreement effective December 31, 2026, with CHI paying $1.900 billion over three years and Conifer buying back CHI's 23.8% minority stake for $540 million.
Feb 17, 2026
2024
Tenet Healthcare Annual Report, Year Ended Dec 31, 2024
Tenet Healthcare Corporation (THC) reported net operating revenues of $20.665 billion for 2024, up $117 million, or 0.6%, from $20.548 billion in 2023. Operating income rose to $5.956 billion from $2.510 billion, driven primarily by $2.916 billion of net gains on sales, consolidation and deconsolidation of facilities, mainly from the sale of the Divested Hospitals (six California hospitals, three South Carolina hospitals and five Alabama hospitals). Net income available to Tenet common shareholders was $3.200 billion, compared with $611 million in 2023, and diluted earnings per share were $32.70 versus $5.71. Adjusted EBITDA, a non-GAAP measure, increased to $3.995 billion from $3.541 billion, and the filing states an Adjusted EBITDA margin of 19.3%, up from 17.2%. The Hospital Operations segment's net operating revenues declined $552 million, or 3.3%, as reported, but rose $1.127 billion, or 8.1%, excluding the divested hospitals, which the company attributes to a more favorable payer mix, higher patient volumes and acuity, Medicaid supplemental revenue growth and negotiated commercial rate increases. The Ambulatory Care segment grew net operating revenues by $669 million, or 17.3%, driven by acquisitions and same-facility growth. Cash and cash equivalents ended the year at $3.019 billion, and net cash provided by operating activities was $2.047 billion, down from $2.374 billion. Long-term debt was $13.173 billion, and the filing reports a ratio of total long-term debt, net of cash, to Adjusted EBITDA of 2.54x. The company repurchased $672 million of common stock during 2024 and has $1.376 billion remaining under its $1.500 billion program authorized in July 2024. Investors should weigh the reported earnings boost, which depends heavily on one-time divestiture gains, against the underlying operating trends. Risk factors highlighted include reliance on managed care payers (70% of Hospital Operations net patient service revenues), Medicaid funding pressures, labor costs and union activity, cybersecurity exposure following a 2022 incident, and the expiration at the end of 2025 of certain Affordable Care Act subsidy provisions. Deloitte & Touche LLP issued an unqualified opinion on the financial statements and on internal control over financial reporting, which excluded 41 ASCs acquired in March 2024.
Feb 18, 2025
2023
Tenet Healthcare Annual Report, Year Ended Dec 31, 2023
Tenet Healthcare Corporation (THC) reported net operating revenues of $20.548 billion for 2023, up from $19.174 billion in 2022, with operating income of $2.510 billion versus $2.333 billion. Net income available to Tenet common shareholders was $611 million, compared with $411 million in 2022, and diluted earnings per share were $5.71 versus $3.79. Adjusted EBITDA was $3.541 billion, compared with $3.469 billion in 2022, and the Adjusted EBITDA margin was 17.2%, down from 18.1%. Net income available to noncontrolling interests rose to $700 million, which absorbs a large share of the company's earnings, particularly from its Ambulatory Care segment (USPI). Net cash provided by operating activities was $2.374 billion, up from $1.083 billion, helped by the absence of Medicare advance recoupments in 2023. The company reorganized into two segments, Hospital Operations and Services and Ambulatory Care, and as of December 31, 2023 it operated 61 hospitals and held interests in 461 ASCs and 24 surgical hospitals. Subsequent to year-end, Tenet completed the sale of three South Carolina hospitals in January 2024 for pre-tax proceeds of approximately $2.400 billion, and entered into a definitive agreement to sell four Orange County and Los Angeles County hospitals, expected to close in early 2024. At year-end, long-term debt was $15.002 billion and the ratio of long-term debt, net of cash, to Adjusted EBITDA was 3.89x. Cash and cash equivalents stood at $1.228 billion, and the company had $1.500 billion of borrowing availability under its Credit Agreement. Key risks highlighted in the filing include managed care concentration (top 10 payers generated 65% of managed care net patient service revenues), physician and labor shortages, cybersecurity exposure following the April 2022 incident, Medicaid funding pressures, and interest expense of $901 million, which equaled 36% of operating income.
Feb 16, 2024
2022
Tenet Healthcare Annual Report, Year Ended Dec 31, 2022
Tenet Healthcare Corporation (THC) reported net operating revenues of $19.174 billion for 2022, down from $19.485 billion in 2021, while operating income fell to $2.333 billion from $2.871 billion. Net income available to Tenet common shareholders was $411 million, compared with $914 million in 2021. Adjusted EBITDA was $3.469 billion (18.1% of net operating revenues) versus $3.483 billion in 2021. The filing attributes the decline in Hospital Operations to lower COVID-related volumes and acuity, the loss of the Miami Hospitals sold in August 2021, and an estimated approximately $100 million pre-tax impact from an April 2022 cybersecurity incident. Ambulatory Care was the growth driver, with net operating revenues rising $530 million (19.5%) on acquisitions and same-facility growth, and the company ended the year with 442 ASCs and 24 surgical hospitals held in USPI. Balance sheet and capital allocation remained central themes. Long-term debt was $15.079 billion at year-end, and the company reported a ratio of total long-term debt, net of cash, to Adjusted EBITDA of 4.1x. Tenet redeemed or repurchased $2.597 billion of senior notes during the year, financed largely by a $2.000 billion issuance of 6.125% senior secured first lien notes due 2030, and recorded a $109 million loss on early extinguishment of debt. Cash and cash equivalents fell to $858 million from $2.364 billion, and net cash provided by operating activities declined to $1.083 billion from $1.568 billion. The board authorized a $1 billion share repurchase program in October 2022; about $250 million was used to buy 5,888,841 shares through year-end. Subsequent events include a January 2023 agreement to sell the 51% interest in San Ramon Regional Medical Center to John Muir Health, and a January 2023 settlement in principle with the Department of Justice related to the Detroit Medical Center investigation, which the company stated was fully reserved at December 31, 2022. The auditor, Deloitte & Touche LLP, issued an unqualified opinion on both the financial statements and internal control over financial reporting.
Feb 21, 2023
2021
Tenet Healthcare Annual Report, Year Ended Dec 31, 2021
Tenet Healthcare Corporation (THC) is a diversified healthcare services company headquartered in Dallas, Texas. At December 31, 2021, it operated 60 hospitals and 535 other healthcare facilities, and it reports three segments: Hospital Operations, Ambulatory Care (USPI) and Conifer. For 2021, net operating revenues were $19.485 billion, up from $17.640 billion in 2020, operating income was $2.871 billion versus $1.989 billion, and net income available to Tenet common shareholders was $914 million versus $399 million. Adjusted EBITDA was $3.483 billion versus $3.146 billion, with the company stating an Adjusted EBITDA margin of 17.9% in both years. Operating income was helped by $445 million of net gains on sales and deconsolidation of facilities, including a $406 million gain on the sale of the five Miami-area hospitals in August 2021, and by $191 million of grant income, down from $882 million in 2020 as COVID-19 relief declined. Liquidity and leverage remain central to the investment case. Long-term debt was $15.646 billion at year-end, and the ratio of net long-term debt to Adjusted EBITDA was 3.81x, or 4.07x including Medicare accelerated payment advances. Operating cash flow was $1.568 billion, compared with $3.407 billion in 2020, reflecting lower Medicare advance receipts and grant cash. Management redeemed about $2.988 billion of notes in 2021 and called $700 million of 2025 senior secured first lien notes in February 2022. It also issued $1.4 billion of 2029 notes and $1.45 billion of 2030 notes. The company identifies a planned tax-free spin-off of Conifer as a pending, uncertain transaction, and it has an ongoing call option to acquire additional interests in USPI from Baylor University Medical Center. Key risks include dependence on managed care payers, which generated 68% of hospital net patient service revenues, and COVID-19 effects on volumes, staffing and supply costs. The filing also flags a Department of Justice investigation of Detroit Medical Center, for which the company says it cannot determine potential exposure, and the 340B payment litigation before the U.S. Supreme Court.
Feb 18, 2022
2020
Tenet Healthcare Annual Report, Year Ended Dec 31, 2020
Tenet Healthcare Corporation (THC) reported net operating revenues of $17.64 billion for 2020, down from $18.48 billion in 2019, while operating income rose to $1.989 billion from $1.537 billion. Net income available to Tenet common shareholders was $399 million, compared with a loss of $215 million in 2019. Results were shaped by the COVID-19 pandemic, which reduced patient volumes, and by $882 million of grant income, largely from the Provider Relief Fund. Adjusted EBITDA was $3.146 billion, versus $2.730 billion in 2019, and the company reported an Adjusted EBITDA margin of 17.9%. The company operates 65 hospitals, USPI's ambulatory surgery network of 308 ASCs as of year-end, and Conifer, a revenue cycle management business that Tenet has been pursuing to spin off tax-free. Operating cash flow rose to $3.407 billion, aided by about $1.4 billion of Medicare accelerated payment advances that must be repaid. Long-term debt was $15.7 billion at year-end, and interest expense was $1.003 billion. In December 2020 the company acquired 45 ASCs for approximately $1.1 billion and agreed to sell most of its urgent care centers. For investors, the key trade-offs are a sharp improvement in profitability and cash flow that was supported by one-time government relief, against a heavy debt load, high interest costs, and continued exposure to pandemic-related volume declines, payer mix shifts, and the uncertain outcome of the Conifer spin-off.
Feb 19, 2021
2019
Tenet Healthcare Annual Report, Year Ended Dec 31, 2019
Tenet Healthcare Corporation operates a diversified healthcare services network that at December 31, 2019 included 65 hospitals and over 500 other healthcare facilities, organized into three segments: Hospital Operations and other, Ambulatory Care (USPI, 95% owned), and Conifer (revenue cycle management, 76.2% owned, subject to a targeted tax-free spin-off by the end of the second quarter of 2021). Net operating revenues were $18.48 billion in 2019 versus $18.31 billion in 2018, while operating income declined to $1.513 billion from $1.647 billion. Net loss attributable to Tenet common shareholders was $(232) million in 2019 compared with net income of $111 million in 2018, and interest expense was $985 million. Adjusted EBITDA rose to $2.706 billion from $2.560 billion, and the company reported an Adjusted EBITDA margin of 14.6%. The company's balance sheet carried approximately $14.8 billion of total long-term debt at year end, and the ratio of long-term debt, net of cash, to Adjusted EBITDA was 5.35x. During 2019 Tenet sold $5.7 billion of notes to refinance maturing debt, recording a $227 million loss on early extinguishment. Net cash provided by operating activities increased to $1.233 billion from $1.049 billion. Management also disclosed a deferred federal NOL carryforward of approximately $600 million, a Non-Prosecution Agreement whose term was extended to November 1, 2020, and a pending agreement in principle to resolve a qui tam matter for approximately $66 million. Investors should weigh the spin-off timing and uncertainty for Conifer, the high leverage and interest burden relative to operating income, the reliance on managed care payers (managed care represented 66% of net patient service revenues from hospitals and related outpatient facilities), and the ongoing regulatory exposures, including the ACA litigation and the 340B and Medicaid DSH matters described in the filing.
Feb 24, 2020
2018
Tenet Healthcare Annual Report, Year Ended Dec 31, 2018
Tenet Healthcare Corporation (THC) reported net operating revenues of $18.31 billion for 2018, down from $19.18 billion in 2017, and operating income of $1.647 billion versus $1.113 billion. Net income available to Tenet common shareholders was $111 million, compared with a loss of $704 million in 2017. Adjusted EBITDA rose to $2.56 billion from $2.44 billion, and the filing states an Adjusted EBITDA margin of 14.0% versus 12.8%. Results were shaped by divestitures of eight U.S. hospitals and all UK operations (Aspen) in 2018, and by the sale of three Chicago-area hospitals completed in January 2019. Same-hospital net operating revenues increased 3.6%, while same-hospital admissions decreased 1.7%. The company operated 68 hospitals at December 31, 2018, with 23 surgical hospitals and approximately 475 outpatient centers, and reports three segments: Hospital Operations and other, Ambulatory Care (USPI, owned 95%), and Conifer (revenue cycle services, which Tenet is exploring selling or otherwise separating). Long-term debt was approximately $14.8 billion, and interest expense was $1.004 billion. The filing reports a ratio of 5.63x total long-term debt, net of cash, to Adjusted EBITDA. In February 2019 Tenet sold $1.5 billion of 6.250% senior secured second lien notes due 2027 to refinance higher-cost debt, with an expected loss on early extinguishment of about $47 million in the first quarter of 2019. The filing highlights ongoing regulatory and legal exposure, including the Affordable Care Act litigation, a Non-Prosecution Agreement with the DOJ (extended to November 1, 2020) that requires an independent compliance monitor, a government investigation of Detroit Medical Center, and an Oklahoma qui tam action. Management also flagged Medicaid and Medicare reimbursement pressures and the risks of managed care concentration, with the top ten managed care payers generating 65% of managed care net patient service revenues.
Feb 25, 2019
2017
Tenet Healthcare Annual Report, Year Ended Dec 31, 2017
Tenet Healthcare Corporation reported a net loss attributable to Tenet common shareholders of $704 million for 2017, compared with a net loss of $192 million in 2016, as shown in the consolidated statements of operations. Net operating revenues before provision for doubtful accounts were $20.61 billion in 2017 versus $21.07 billion in 2016, and operating income declined to $1.113 billion from $1.247 billion. Interest expense rose to $1.028 billion, and income tax expense was $219 million, which includes a $252 million charge from revaluing net deferred tax assets under the Tax Cuts and Jobs Act. Adjusted EBITDA was $2.444 billion compared with $2.478 billion in 2016, and the company cited a 5.86x ratio of long-term debt, net of cash, to Adjusted EBITDA at year-end 2017. The company is pursuing portfolio changes: it completed the sale of its Philadelphia-area hospitals effective January 11, 2018 and of its Houston-area facilities in 2017, has definitive agreements for additional hospital divestitures, and is exploring a potential sale of its Conifer revenue cycle subsidiary. It also launched an enterprise-wide cost-reduction program intended to lower annual operating expenses by $250 million. Ambulatory Care, operated through the USPI joint venture, grew in revenue to $1.94 billion from $1.80 billion, and Tenet raised its USPI ownership to 80.0%. Upcoming put obligations for USPI minority interests are estimated at $285 million to $295 million in 2018. The filing also discloses regulatory and compliance exposure, including a Non-Prosecution Agreement under which the DOJ determined in the fourth quarter of 2017 that the company breached reporting obligations, a monitor retained in February 2017, and continuing uncertainty around the Affordable Care Act. Cash flow from operations improved to $1.200 billion from $558 million, while the company had $611 million in cash and cash equivalents at year-end 2017.
Feb 26, 2018
2016
Tenet Healthcare Annual Report, Year Ended Dec 31, 2016
Tenet Healthcare Corporation's Form 10-K for the year ended December 31, 2016 reports net operating revenues before provision for doubtful accounts of $21.07 billion, net operating revenues of $19.62 billion, operating income of $1.22 billion, and interest expense of $979 million. The company reports a net loss attributable to Tenet common shareholders of $192 million for 2016, compared with a net loss of $140 million in 2015, and Adjusted EBITDA of $2.41 billion. Net cash provided by operating activities fell to $558 million from $1.026 billion in 2015. Long-term debt, net of current portion, was $15.06 billion at year-end. The company operates 79 hospitals, about 470 outpatient centers, and nine UK facilities, organized into three segments: Hospital Operations and other (86% of 2016 revenues per the filing), Ambulatory Care (driven by the USPI joint venture, 9%), and Conifer (revenue cycle and value-based care services, 5%). The filing highlights a Non-Prosecution Agreement with the DOJ, a $517 million Clinica de la Mama settlement payment, pending shareholder class and derivative litigation, and the planned sale or wind-down of health plans by the end of 2017. The company also notes uncertainty around repeal or replacement of the Affordable Care Act, which it says could reduce volumes and increase uncompensated care. For investors, the key issues are high leverage (the ratio of long-term debt net of cash to Adjusted EBITDA was 6.03x), the expected USPI put obligations (initial 2017 payment estimated at $159 million to $170 million), and regulatory exposure from the ACA, Medicaid pass-through changes, and the monitorship under the NPA.
Feb 27, 2017
2015
Tenet Healthcare Annual Report, Year Ended Dec 31, 2015
Tenet Healthcare Corporation reported net operating revenues before provision for doubtful accounts of $20.11 billion for 2015, up from $17.91 billion in 2014, and net operating revenues of $18.63 billion after a $1.48 billion provision for doubtful accounts. The company recorded a net loss attributable to Tenet common shareholders of $140 million in 2015, compared with net income of $0.12 per diluted share... more precisely, a loss of $1.43 per diluted share from continuing operations, versus $0.34 per diluted share in 2014. Adjusted EBITDA rose to $2.28 billion from $1.95 billion, and net cash provided by operating activities was $1.03 billion, up from $687 million. The year was defined by portfolio restructuring. Tenet combined its freestanding ambulatory surgery and imaging assets with United Surgical Partners International into a joint venture in which it holds a 50.1% interest, acquired Aspen Healthcare in the United Kingdom, formed new hospital joint ventures in Birmingham, Alabama and Tucson, Arizona, and agreed to sell its Atlanta-area hospitals to WellStar Health System. Ambulatory Care was reported as a new segment, and redeemable noncontrolling interests rose to $2.27 billion, reflecting put/call obligations tied to the USPI joint venture. The filing also highlights significant legal and leverage risks. Total long-term debt was approximately $14.4 billion at year-end, and the company increased its reserve for the Clinica de la Mama qui tam action and related criminal investigation to $238 million from $20 million after making a settlement offer. Tenet did not pay cash dividends and had a $500 million share repurchase authorization, under which it had repurchased about $40 million of stock through December 31, 2015.
Feb 22, 2016
2014
Tenet Healthcare Annual Report, Year Ended Dec 31, 2014
Tenet Healthcare Corporation (THC) reported in its 10-K for the year ended December 31, 2014 that it is a national, diversified healthcare services company operating 80 hospitals, 210 outpatient centers, six health plans and Conifer Health Solutions, LLC, a business process services unit. Net operating revenues rose to $16.615 billion in 2014 from $11.102 billion in 2013, driven largely by the October 2013 Vanguard Health Systems acquisition, while operating income increased to $925 million from $663 million. Net income attributable to Tenet common shareholders was $12 million, compared with a loss of $134 million in 2013, and diluted EPS from continuing operations was $0.34. Adjusted EBITDA was $1.952 billion, versus $1.342 billion in 2013. Balance sheet leverage is high. Long-term debt, net of current portion, was $11.695 billion at year-end 2014, and total equity was $785 million. Management reports that the ratio of total long-term debt, net of cash, to Adjusted EBITDA was 5.95x. Interest expense rose to $754 million from $474 million. Cash flow from operations was $687 million, and capital expenditures were $933 million. Cash and cash equivalents were $193 million at year-end. Key risks cited include the Affordable Care Act's ongoing effects on reimbursement and uninsured volumes, reliance on Medicare and Medicaid (about 22% and 9% of general hospital net patient revenues, respectively), managed care payer concentration, labor costs and union activity, and several pending government investigations. Management also disclosed a settlement that gave Tenet full ownership of the Valley Baptist hospitals for about $254 million in cash in February 2015, and a January 2015 extension of the Conifer agreement with Catholic Health Initiatives.
Feb 23, 2015
2013
Tenet Healthcare Annual Report, Year Ended Dec 31, 2013
Tenet Healthcare Corporation's 2013 results were shaped by its acquisition of Vanguard Health Systems, Inc., completed October 1, 2013 for approximately $4.3 billion (including assumption of $2.5 billion of net Vanguard debt). As of December 31, 2013, Tenet primarily operated 77 hospitals with 20,293 licensed beds, 183 outpatient centers, six health plans, six accountable care networks, and Conifer Health Solutions, which serves more than 700 hospital and other clients. Net operating revenues rose to $11.102 billion in 2013 from $9.119 billion in 2012, while operating income fell to $663 million from $749 million, and the company reported a net loss attributable to common shareholders of $134 million, compared with net income of $141 million in 2012. The loss was driven largely by a $348 million loss from early extinguishment of debt, tied to the refinancing of senior secured notes, along with $103 million of impairment, restructuring and acquisition-related costs and $31 million of litigation and investigation costs. Interest expense increased to $474 million from $412 million. Long-term debt, net of current portion, rose to $10.69 billion from $5.16 billion, and total assets grew to $16.13 billion from $9.04 billion. Net cash provided by operating activities was $589 million, versus $593 million in 2012, and Tenet repurchased $400 million of common stock during 2013. The filing highlights ongoing headwinds: Medicare and Medicaid reimbursement pressure, uncertainty around Affordable Care Act implementation, a high volume of uninsured and underinsured patients, and labor cost pressures. Management also flagged several pending government reviews, including kyphoplasty and implantable cardioverter defibrillator investigations and a qui tam matter involving Clinica de la Mama, with reserves of approximately $27 million recorded for 23 hospitals under review. Adjusted EBITDA was $1.342 billion, or 12.1% of net operating revenues, compared with $1.203 billion (13.2%) in 2012.
Feb 24, 2014
2012
Tenet Healthcare Annual Report, Year Ended Dec 31, 2012
Tenet Healthcare Corporation operated 49 hospitals with 13,216 licensed beds in 10 states and 117 outpatient centers at December 31, 2012, and its Conifer subsidiary provided business process solutions to more than 600 hospital and other clients. Net operating revenues before provision for doubtful accounts rose to $9.90 billion in 2012 from $9.37 billion in 2011, while net income attributable to Tenet common shareholders was $141 million compared with $58 million in 2011. Income from continuing operations was $209 million, and diluted EPS from continuing operations was $1.70 versus $0.56 a year earlier. Results were helped by a $81 million favorable Medicare Rural Floor Budget Neutrality settlement and $40 million of EHR incentives, while the provision for doubtful accounts rose to 7.9% of revenues before provision from 7.7%. Balance-sheet and capital activity were significant. Long-term debt, net of current portion, increased to $5.16 billion from $4.29 billion, and total equity fell to $1.22 billion from $1.49 billion after $289 million of preferred stock repurchases and $126 million of common stock repurchases. Cash and cash equivalents rose to $364 million. In February 2013 the company sold $850 million of 4½% senior secured notes due 2021 and tendered for about $645 million of its 10% senior secured notes due 2018, which it expects to generate a loss on early extinguishment of about $179 million. The filing highlights significant ongoing risk: managed care net patient revenues were $5.4 billion (about 57% of net patient revenues), Medicare and Medicaid together represented roughly 31.8% of net patient revenues, and the Affordable Care Act is expected to have a material effect on the business in ways the company says it cannot fully predict. Federal NOL carryforwards were approximately $1.5 billion.
Feb 26, 2013
2011
Tenet Healthcare Annual Report, Year Ended Dec 31, 2011
Tenet Healthcare Corporation, an investor-owned health care services company, operated 50 hospitals with 13,453 licensed beds in 11 states at December 31, 2011, plus 98 diagnostic imaging, ambulatory surgery and urgent care centers in 12 states. Net operating revenues before provision for doubtful accounts rose to $9.58 billion in 2011 from $9.21 billion in 2010, while net operating revenues after the provision for doubtful accounts were $8.85 billion. Operating income increased to $650 million from $634 million, but income from continuing operations before income taxes was $161 million compared with $158 million, and net income attributable to Tenet common shareholders fell to $58 million from $1.119 billion in 2010, which included a $977 million income tax benefit from a reduced valuation allowance. Loss from early extinguishment of debt of $117 million and litigation and investigation costs of $55 million weighed on 2011 results. Management highlighted improving managed care pricing, a gradual rise in patient volumes, growth in outpatient services (about 31% of revenues before provision for doubtful accounts) and expansion of its Conifer Health Solutions revenue cycle business, which served more than 300 hospitals and organizations at year-end. Cash flow from operations was $497 million in 2011 versus $472 million in 2010. Long-term debt, net of current portion, was $4.29 billion, and the company completed a $400 million share repurchase program in January 2012 after buying 81,073,864 shares at an average of $4.94. The filing flags significant risks, including the Affordable Care Act's Medicare and Medicaid reductions, the pending U.S. Supreme Court review, a 2012 Medicare physician fee cut that was deferred, high uninsured and self-pay volumes, nurse shortages, union activity, and government investigations with about $50 million in reserves. The self-pay collection rate declined to 27.8% from 28.3%, and the company reported that its adjusted EBITDA rose to $1.145 billion from $1.050 billion.
Feb 28, 2012
2010-A
Tenet Healthcare Annual Report (Amendment), Year Ended Dec 31, 2010
This Form 10-K/A (Amendment No. 1) from Tenet Healthcare Corporation, filed May 2, 2011 for the fiscal year ended December 31, 2010, is a Part III amendment. It supplements the original Form 10-K with director biographies, executive compensation disclosure, security ownership, director independence, and principal accounting fee information. It does not contain the consolidated financial statements, which are incorporated by reference to the Original Form 10-K Filing. The filing's compensation discussion cites key 2010 performance figures. Net revenue was $9.205 billion in 2010, and EBITDA was $1.050 billion, up from $422 million in 2004 on a same-hospitals basis. Return on invested capital was 12.3% in 2010, and total debt was $4.064 billion at December 31, 2010, down from $4.782 billion in 2006. The company also completed repayment of its obligations to the U.S. Department of Justice, which had an original amount of $725 million. Adjusted free cash flow for 2010 was $58.1 million under the annual incentive plan metrics. Governance and ownership details include an annual Board chairman structure led by Edward A. Kangas, with Trevor Fetter serving as President and Chief Executive Officer. The company reported 489,427,436 common shares outstanding as of April 15, 2011. Franklin Mutual Advisers, LLC held 10.40% of outstanding common stock and FMR LLC held 9.534%. Deloitte & Touche LLP was the principal independent registered public accounting firm, with audit fees of $2,701,060 in 2010.
May 2, 2011
2010
Tenet Healthcare Annual Report, Year Ended Dec 31, 2010
Tenet Healthcare Corporation (NYSE: THC) operates 49 general hospitals with 13,428 licensed beds in 11 states, plus 81 outpatient diagnostic imaging and ambulatory surgery centers and the Conifer revenue cycle services business serving about 30 non-Tenet hospitals. Net operating revenues rose to $9.205 billion in 2010 from $9.014 billion in 2009, and operating income increased to $634 million from $538 million. Net income attributable to Tenet common shareholders was $1.119 billion in 2010, driven largely by an income tax benefit of $977 million from a reduction in the deferred tax asset valuation allowance. Excluding that benefit and other items, diluted earnings per share from continuing operations were stated at $2.01 including above items, versus $0.43 in 2009. Cash flow and leverage remained a focus. Net cash provided by operating activities was $472 million in 2010 versus $425 million in 2009, and Adjusted Free Cash Flow from continuing operations was $92 million versus $122 million. Long-term debt, net of current portion, was $3.997 billion at year-end 2010, and management stated a ratio of total long-term debt net of cash to Adjusted EBITDA of 3.5x. Adjusted EBITDA was $1.050 billion in 2010 versus $982 million in 2009. The company issued $600 million of 8% senior notes due 2020 and repurchased about $782 million of 7 3/8% senior notes due 2013. The filing highlights significant risks: Community Health Systems made an unsolicited $6.00 per share cash-and-stock proposal in November 2010, which the board rejected, and Community began a proxy contest in January 2011 nominating 10 director candidates. Six shareholder class actions have been filed. Pressures on volumes, bad debt, and government reimbursement under the Affordable Care Act persist. Medicare and Medicaid accounted for about 32.6% of 2010 revenues, and the company is subject to ongoing government reviews and Katrina-related class actions.
Feb 25, 2011
2009
Tenet Healthcare Annual Report, Year Ended Dec 31, 2009
Tenet Healthcare Corporation is an investor-owned health care services company that operates 50 general hospitals and a critical access hospital with 13,601 licensed beds in 12 states at December 31, 2009. Net operating revenues rose to $9.01 billion in 2009 from $8.59 billion in 2008, and operating income increased to $538 million from $311 million. Income from continuing operations before discontinued operations was $228 million, and net income attributable to Tenet common shareholders was $181 million, compared with $25 million in 2008. Diluted earnings per share were $0.37 on a net basis, and operating cash flow was $425 million versus $208 million a year earlier. The company's balance sheet improved in 2009 through debt refinancing and a mandatory convertible preferred stock issuance. Total long-term debt net of current portion was $4.27 billion at year-end, and the company reported a long-term target ratio of net debt to Adjusted EBITDA of 4.0x or below, with a ratio of 3.7x at December 31, 2009. Total shareholders' equity rose to $646 million from $103 million. The company also disclosed that it had a valuation allowance of approximately $1.1 billion against deferred tax assets, and federal net operating loss carryforwards of approximately $2.0 billion. The filing highlights ongoing challenges, including declining patient volumes over several years, a high level of uninsured and underinsured patients, rising union activity, nurse shortages, and dependence on Florida, Texas and California, which account for large shares of licensed beds. Pending matters include government reviews by the OIG and DOJ, California wage and hour litigation, Hurricane Katrina class actions, and IRS disputes. Management stated that these matters could have a material adverse effect, though it could not predict their outcomes.
Feb 23, 2010
2008
Tenet Healthcare Annual Report, Year Ended Dec 31, 2008
Tenet Healthcare Corporation, an investor-owned health care services company, operates general hospitals and related facilities. At December 31, 2008, its subsidiaries operated 53 general hospitals (including three held for divestiture in discontinued operations), a cancer hospital and a critical access hospital, with 14,352 licensed beds in 12 states. Net operating revenues rose to $8.663 billion in 2008 from $8.167 billion in 2007, and the company reported net income of $25 million, compared with a net loss of $89 million in 2007. Income from continuing operations was $62 million, or $0.13 per diluted share, versus a loss of $53 million in 2007. Operating income was $300 million, and shareholders' equity improved to $103 million from $54 million. The company continues to face significant industry headwinds. Same-hospital commercial managed care admissions declined 3.0% in 2008, the provision for doubtful accounts rose to $632 million, and the self-pay collection rate fell to approximately 33% from 35%. Cash flow from operations was $208 million, down from $326 million, and the company had total long-term debt of approximately $4.8 billion. Management also disclosed that it reported losses from continuing operations for 2003 through 2007 and is executing a turnaround strategy. Key risks include regulatory and Medicaid funding pressures in California and Florida, union organizing activity, and nursing shortages. Near-term actions include the February 10, 2009 definitive agreement to sell USC University Hospital and USC Kenneth Norris Jr. Cancer Hospital to the University of Southern California, targeted for completion by March 31, 2009, and an open offer to exchange up to $1.6 billion of notes maturing in 2011 and 2012 for new senior secured notes maturing in 2015 and 2018, with higher interest rates. The company also closed Irvine Regional Hospital and Medical Center on January 15, 2009, plans to close Community Hospital of Los Gatos on April 10, 2009, and is relocating its headquarters to downtown Dallas in the fourth quarter of 2009.
Feb 24, 2009
2007
Tenet Healthcare Annual Report, Year Ended Dec 31, 2007
Tenet Healthcare Corporation's 10-K for fiscal 2007 reports net operating revenues of $8.85 billion, up from $8.45 billion in 2006, and operating income of $269 million, compared with an operating loss of $732 million in 2006. The company still posted a net loss of $89 million for 2007 (loss per share of $0.19), improved from a net loss of $803 million in 2006. Loss from continuing operations narrowed to $49 million, or $0.10 per share, from $815 million in 2006. Management describes the company as still executing a turnaround strategy, citing ongoing volume declines, high bad debt and labor and supply cost pressures, and states that the company has reported losses from continuing operations every year from 2003 through 2007. The balance sheet remains highly leveraged. Long-term debt is about $4.8 billion, shareholders' equity is $54 million (down from $264 million), and working capital fell to $512 million from $1.10 billion. Cash and cash equivalents were $572 million at year-end, and the company had $564 million of revolving credit borrowing capacity. Net cash from operating activities was $326 million, compared with a $462 million use in 2006, largely because 2006 included large legal settlement payments and 2007 included net income tax refunds of $162 million. Capital expenditures were $743 million. The company is pursuing divestitures and portfolio changes, including the pending sale of North Ridge Medical Center, the completed sales of several Philadelphia and Louisiana facilities, and the purchase of Coastal Carolina Medical Center. Significant legal and regulatory exposures remain, including wage and hour class actions in California, pending appeals in False Claims Act cases, a dispute with HCPI over hospital leases, and an open IRS dispute for tax years ending 2002 that management expects to reach a deficiency notice by June 30, 2008.
Feb 26, 2008
2006
Tenet Healthcare Annual Report, Year Ended Dec 31, 2006
Tenet Healthcare Corporation's 2006 Form 10-K reports a net loss of $803 million for 2006 (loss per share of $1.71), compared with a net loss of $724 million in 2005 and $2.806 billion in 2004. Loss from continuing operations was $871 million, or $1.85 per diluted share, driven mainly by $766 million in costs of litigation and investigations (including a $711 million June 2006 global civil settlement with the federal government) and $376 million of impairment of long-lived assets and goodwill, net of insurance recoveries. Net operating revenues were $8.701 billion, up from $8.614 billion, while patient volumes declined: admissions were down 2.5%, patient days down 4.5%, and outpatient visits down 5.2%. Shareholders' equity fell to $264 million from $1.021 billion, and long-term debt was $4.760 billion. Tenet is pursuing a turnaround strategy centered on divesting 10 general hospitals announced in June 2006 (six sold as of year-end 2006), focusing on 57 remaining general hospitals, and building outpatient services. Management cites Compact with Uninsured Patients discounts ($930 million in 2006 contractual allowances) as a major revenue factor, and the company continues to face unresolved matters including an SEC investigation, the Brockovich and Boca Raton RICO suits, a $207 million IRS Revenue Agent's Report, and wage-and-hour class actions in California. Liquidity at year-end included $784 million of cash and cash equivalents and $596 million of revolver borrowing capacity, with an $800 million senior secured revolving credit facility entered into in November 2006. The company reported that it has not paid cash dividends since fiscal 1994 and does not intend to pay them in the foreseeable future. Management concluded that internal control over financial reporting was effective as of December 31, 2006, and KPMG LLP audited both the financial statements and internal controls.
Feb 27, 2007
2005
Tenet Healthcare Annual Report, Year Ended Dec 31, 2005
Tenet Healthcare Corporation's 2005 Form 10-K reports an operating loss of $359 million and a net loss of $724 million for the year ended December 31, 2005, compared with restated net losses of $2.806 billion in 2004 and $1.564 billion in 2003. Net operating revenues were $9.614 billion, down from $9.908 billion in 2004 (restated). Results were hurt by impairment and restructuring charges of $266 million, $212 million of litigation and investigation costs, a $55 million hurricane loss, and a $218 million increase in the deferred tax asset valuation allowance. Provision for doubtful accounts fell to $698 million from $1.202 billion, largely because of the Compact with Uninsured Patients, which recorded $718 million of self-pay discounts as contractual allowances. Shareholders' equity fell to $1.021 billion from $1.699 billion. Cash from operations was $763 million, helped by a $537 million income tax refund, and unrestricted cash was $1.373 billion at year-end. The filing restates 2004 and 2003 results and earlier periods back to fiscal 1999 because of an audit committee investigation into managed care contractual allowances at three California hospitals. The restatement increased the originally reported 2004 net loss by $166 million and the 2003 net loss by $87 million. The company remains under multiple federal and state investigations, including a criminal trial in San Diego (the Alvarado case) with jury deliberations still ongoing as of March 8, 2006, a pending SEC investigation with Wells Notices issued to former executives, and a Medicare coding lawsuit. Management has agreed to settle the securities class action for $215 million in cash, with about $75 million expected from insurance, and reached a $7 million settlement with the Florida Attorney General. The company operates 69 continuing general hospitals in 13 states after divesting 25 of 27 targeted hospitals, and it has a $4.8 billion long-term debt load. Hurricane Katrina closed two New Orleans hospitals and left others operating at reduced levels. The company paid no cash dividends and does not intend to pay them in the foreseeable future.
Mar 9, 2006
2004
Tenet Healthcare Annual Report, Year Ended Dec 31, 2004
Tenet Healthcare Corporation reported a net loss of $2.64 billion for the year ended December 31, 2004, compared with a net loss of $1.48 billion for 2003, and a loss from continuing operations of $1.80 billion (diluted loss of $(3.85) per share). Net operating revenues were $9.92 billion in 2004 versus $10.15 billion in 2003. The loss was driven by $1.27 billion of impairment and restructuring charges (including a $1.11 billion goodwill impairment), a $480 million valuation allowance recorded against deferred tax assets in continuing operations, $74 million of litigation and investigation costs, and a $395 million Redding Medical Center patient litigation settlement reported within discontinued operations. Volumes declined: outpatient visits fell 4.3% and admissions fell 1.4% at continuing general hospitals, and provision for doubtful accounts rose to $1.21 billion, or 12.2% of net operating revenues. The company is restructuring around 69 general hospitals after announcing in January 2004 the divestiture of 27 hospitals; as of December 31, 2004 it had completed 18 of those divestitures and signed a definitive agreement for four more. Liquidity was supported by $654 million of unrestricted cash, a $773 million net proceeds senior notes offering in January 2005, and an expected $530 million income tax refund in 2005, though operating cash flow was negative $82 million for 2004. The filing states management does not anticipate significant improvement in operating performance in 2005, and it describes extensive government investigations, qui tam actions, and class actions over pricing and Medicare outlier payments, including a Florida AG and Boca Raton RICO suit filed in March 2005. Shareholders' equity fell to $1.73 billion at year-end 2004 from $4.36 billion a year earlier, and the company has not paid cash dividends on common stock since fiscal 1994 and does not intend to pay them in the foreseeable future.
Mar 8, 2005
2003
Tenet Healthcare Annual Report, Year Ended Dec 31, 2003
Tenet Healthcare Corporation's 10-K for the fiscal year ended December 31, 2003 reports a sharp deterioration in results. Net operating revenues were $13.21 billion in 2003, compared with $13.60 billion in the year ended December 31, 2002 (unaudited). The company reported a loss from continuing operations of $1.40 billion, or $3.01 per diluted share, versus income of $744 million in 2002. Net loss was $1.48 billion. The loss was driven largely by $1.88 billion of impairment and restructuring charges (including $1.12 billion of goodwill impairment) and $282 million of costs of litigation and investigations. Medicare outlier revenue fell from approximately $750 million in 2002 to approximately $140 million in 2003, and the provision for doubtful accounts rose to $1.44 billion from $969 million, reflecting growth in uninsured and self-pay admissions. Cash flow from operations fell to $838 million from $2.33 billion in the comparable 2002 period. Unrestricted cash was about $600 million at year-end, and the company said it has no significant debt maturities before late 2006. Management stated that it does not expect significant operating or margin improvement in 2004 and, potentially, 2005. To address these issues, Tenet announced in January 2004 the proposed divestiture of 27 hospitals, leaving a core group of 69 domestic hospitals, and expects net proceeds of about $600 million, largely in tax benefits it does not expect to realize until 2005. The credit agreement was amended in March 2004, reducing commitments from $1.2 billion to $800 million and loosening the maximum leverage ratio to 5.5-to-1 through June 30, 2005. The filing also discloses extensive government investigations and litigation, including the Redding Medical Center matters, Medicare coding and transfer-discharge investigations, pricing class actions, securities class actions, and an SEC formal investigation. The company states that these matters could have a material adverse effect on its business, financial position, results of operations or cash flows. A $148 million California judgment (paid as $163.3 million in March 2004) and an IRS proposed deficiency of $157 million plus about $122 million of interest are also described.
Mar 15, 2004
2002
Tenet Healthcare Annual Report, Year Ended Dec 31, 2002
Tenet Healthcare Corporation filed this transition report on Form 10-K covering the seven-month period from June 1, 2002 to December 31, 2002, after changing its fiscal year end from May 31 to December 31. For the seven months ended December 31, 2002, net operating revenues were $8.74 billion (up from $7.83 billion in the comparable 2001 period), operating income was $974 million, and net income was $459 million, or $0.93 diluted earnings per share. The results include $396 million of impairment and restructuring charges, a $64 million impairment on Ventas investment securities, and a $4 million loss on early extinguishment of debt. Net cash provided by operating activities was $1.13 billion for the period. The company operated 114 domestic general hospitals with 27,870 licensed beds in 16 states at December 31, 2002, and announced in March 2003 plans to divest or consolidate 14 general hospitals. The filing highlights a significant change in Medicare outlier revenue. Outlier revenue was $495 million in the seven-month period ended December 31, 2002, and the company states that it voluntarily adopted a new outlier calculation method effective January 1, 2003, which reduced monthly inpatient outlier payments from approximately $65 million to approximately $6 million. The company says that CMS's proposed rule would materially change outlier payments, and it expects its revenue growth rates of recent years will not be sustained. Adjusted to exclude all outlier revenue, operating income for the seven-month period would have been $479 million. Legal and regulatory exposure is extensive. The filing describes securities class actions filed since November 2002, shareholder derivative suits, a U.S. Department of Justice lawsuit under the False Claims Act concerning Medicare billings for four DRGs, pharmaceutical and pricing class actions, and multiple government investigations, including those at Redding Medical Center and Alvarado Hospital. The company states it cannot estimate the likelihood of loss and that outcomes could have a material adverse effect on liquidity, financial position and results of operations.
May 15, 2003
2002
Tenet Healthcare Annual Report, Year Ended May 31, 2002
Tenet Healthcare Corporation's annual report on Form 10-K for the fiscal year ended May 31, 2002 describes a company that is the second-largest investor-owned health care services company in the United States. At May 31, 2002, its subsidiaries owned or operated 116 domestic general hospitals with 28,667 licensed beds in 17 states, and the company reports a single reportable operating segment. Fiscal 2002 net operating revenues were $13.91 billion, up from $12.05 billion in fiscal 2001, operating income was $2.09 billion, and net income was $785 million, after a $240 million extraordinary charge from early extinguishment of debt. Income from continuing operations was $1.03 billion, and diluted earnings per share from continuing operations were $2.04. The Chairman's letter cites earnings per share from operations before special items of $2.17 and cash flow from operations of $2.32 billion. The balance sheet and cash flow profile improved substantially during the year. Long-term debt, net of current portion, fell to $3.92 billion from $4.20 billion, and shareholders' equity rose to $5.62 billion. The company repurchased 18,180,750 shares for $715 million, repurchased $4.06 billion of senior and senior subordinated notes, and issued $2.54 billion of new senior notes. Capital expenditures were $889 million, and the filing states that the company's senior and senior subordinated notes were upgraded to investment grade during the year. Unused borrowing capacity under its credit agreement was $931 million at May 31, 2002. The filing also flags risks that investors should weigh. Hospital bed concentration is highest in California (29.7 percent), Florida (16.3 percent) and Texas (12.2 percent). Malpractice expense rose to $240 million from $144 million, and the company expects a nursing shortage to continue to pressure labor costs. Medicare and Medicaid payments remain subject to legislative change, and the company will adopt SFAS 142 on June 1, 2002, ending goodwill amortization, with a transitional impairment test still pending.
Aug 14, 2002
1998-A
Tenet Healthcare Annual Report (Amendment), Year Ended May 31, 1998
Tenet Healthcare Corporation (filed as Tenet Healthcare Corporation, Santa Barbara, California) filed this Form 10-K/A for the fiscal year ended May 31, 1998. The amendment restates consolidated financial statements for fiscal years 1994 through 1997 to reclassify certain expenses tied to the OrNda Merger and facility consolidation charges, following SEC staff comments made in connection with a debt exchange offer registration statement. Fiscal 1998 net operating revenues were $9,895 million, up from $8,691 million in 1997, and income from continuing operations before income taxes was $647 million, compared with $26 million in 1997. Excluding merger, facility consolidation and impairment charges and certain gains and losses, pretax income would have been $885 million in 1998. Operating income was $1,128 million in 1998, and net income was $261 million, after $117 million in extraordinary charges from early debt extinguishment. The balance sheet strengthened over the year. Total assets rose to $12,774 million and shareholders' equity to $3,558 million, while long-term debt, excluding the current portion, increased to $5,829 million. Net cash provided by operating activities was $403 million in 1998, compared with $404 million in 1997 as reported in the cash flow statement, and cash used in investing activities totaled $1,083 million, including $679 million for purchases of new businesses. Management stated that unused borrowing capacity under the $2.8 billion 1997 Credit Agreement was $1.2 billion at May 31, 1998, and that the company was in compliance with its loan covenants. Debt ratings were BB+ from Standard and Poor's and Ba1 from Moody's. The filing highlights reimbursement and competitive pressures. Medicare accounted for approximately 38% of net patient revenues of domestic general hospitals in 1998, down from approximately 40% in 1996 and 1997. Managed care rose to approximately 33.7% of net patient revenues in 1998, and capitated arrangements accounted for an estimated 5.0% of revenues. Management noted that Balanced Budget Act of 1997 Medicare payment changes will significantly reduce payments as they phase in over five years. The company also reported $221 million in 1998 facility consolidation and impairment charges and said it is unable to estimate the costs of Year 2000 remediation or whether they will be material.
Apr 28, 1999
1997
Tenet Healthcare Annual Report, Year Ended May 31, 1997
Tenet Healthcare Corporation (THC) reported its 10-K for the fiscal year ended May 31, 1997. The company describes itself as the second largest investor-owned healthcare services company in the United States, owning or operating 128 general hospitals with 27,959 licensed beds in 22 states at May 31, 1997. The defining event of the year was the January 30, 1997 acquisition of OrNda HealthCorp, accounted for as a pooling-of-interests, which added 50 general hospitals to Tenet's 77. Net operating revenues were $8.69 billion in fiscal 1997, up from $7.71 billion in 1996, and the company reported a loss from continuing operations of $73 million, or $(0.24) per fully diluted share, compared with income of $498 million in 1996. The loss reflects $740 million of merger, facility consolidation and other non-recurring charges, and the company reported a net loss of $254 million for the year. The Annual Report to Shareholders states that excluding unusual and non-recurring items, earnings per share from continuing operations were $1.46, compared with $1.27 in the prior year. Shareholders' equity was $3.22 billion at May 31, 1997, and long-term debt, excluding the current portion, was $5.02 billion. Cash provided by operating activities was $404 million in fiscal 1997. The company also disclosed that the Balanced Budget Act of 1997 will reduce Medicare reimbursement, and that Medicare accounted for approximately 40% of net patient revenues of domestic general hospitals in 1996 and 1997. Management stated that these reductions are not expected to have a material adverse effect on overall results of operations. Investors should note the heavy concentration of hospitals in California (35.2%), Texas (15.6%) and Florida (13.3%), the ongoing psychiatric malpractice and shareholder litigation, and the company's $2.8 billion revolving credit agreement, of which about $2.0 billion was available at May 31, 1997.
Aug 27, 1997
1996
Tenet Healthcare Annual Report, Year Ended May 31, 1996
Tenet Healthcare Corporation (filed as Tenet Healthcare Corporation, Santa Barbara, California; NYSE and Pacific: THC) filed this Form 10-K for the fiscal year ended May 31, 1996. The company describes itself as the second-largest investor-owned healthcare services company in the United States, operating 74 domestic general hospitals with 16,666 licensed beds in 13 states, and identifies healthcare as its only material business segment. Fiscal 1996 was defined by the completion of its asset monetization program: substantially all international operations were sold, the Westminster stake was sold for approximately $120 million, and the Hillhaven preferred stock was redeemed for about $92 million. Net operating revenues were $5.559 billion, compared with $3.318 billion in fiscal 1995, and income from continuing operations was $398 million ($1.90 primary EPS). Fiscal 1996 results include net gains on disposals and asset sales of $346 million, and $86 million of impairment losses. The balance sheet improved meaningfully. Total assets were $8.332 billion, shareholders' equity was $2.636 billion, and long-term debt excluding the current portion was $3.191 billion, down from $3.273 billion. The company's long-term debt-to-equity ratio was approximately 1.21-to-1 at May 31, 1996, down from 1.85-to-1 at March 1, 1995. In March 1996 Tenet entered a five-year, $1.55 billion unsecured revolving credit agreement, of which $575 million was unused at May 31, 1996. Senior debt ratings were BB by Standard & Poor's and Ba1 by Moody's. Interest expense rose to $312 million from $138 million, reflecting the March 1995 acquisition of American Medical Holdings, Inc. Investors should weigh several risks described in the filing. Psychiatric malpractice and fraud litigation remains a significant exposure, though the company says it does not expect material adverse effects beyond its reserves. Medicare and Medicaid reimbursement pressure continues, with the company stating that payments to hospitals are expected to be reduced by future legislation. A California ballot initiative on nurse-to-patient ratios, scheduled for November 5, 1996, could materially affect costs if passed and not passed through to payors.
Aug 26, 1996
1995
Tenet Healthcare Annual Report, Year Ended May 31, 1995
Tenet Healthcare Corporation (formerly known as National Medical Enterprises, Inc.) reported results for the fiscal year ended May 31, 1995, its first full year after the March 1, 1995 merger with American Medical Holdings, Inc. (AMH). Net operating revenues were $3,318 million, up from $2,943 million in 1994, and operating income rose to $391 million from $299 million. Net income was $165 million, compared with a net loss of $425 million in fiscal 1994. Income from continuing operations was $194 million, or $1.10 per primary share. Because the merger was accounted for as a purchase, results for prior periods reflect NME only, and only three months of AMH results are included in fiscal 1995. The merger, which cost $1.5 billion in cash plus 33.2 million shares, substantially increased debt: total debt rose to $3,560 million from $835 million, and total debt to equity was 1.79 to 1. The filing states that the merger will add more than $250 million annually in interest expense and that goodwill amortization is expected to be at least $62.5 million annually. Management is pursuing a focus on domestic general hospitals. Tenet sold its two Singapore hospitals on June 28, 1995, for $243.3 million net of debt assumed, and has agreements to sell its holdings in Malaysia, Thailand and Australia for about $94 million. It also expects to receive about $90 million for its Hillhaven preferred stock in connection with Vencor's pending acquisition of Hillhaven. Management says it intends to significantly reduce debt in fiscal 1996 and aims for an investment-grade rating, with debt reduction dependent on acquisition opportunities. Pending acquisitions include Mercy+Baptist Medical Center in New Orleans and Providence Memorial Hospital in El Paso, together costing about $350 million. The filing also describes ongoing legal exposure from the discontinued psychiatric hospital business. Remaining reserves for unusual litigation costs and legal fees total about $75.7 million, and a global shareholder settlement totaling $63.75 million plus interest is pending court approval, with a hearing scheduled for September 18, 1995. Additional psychiatric malpractice suits and a challenge to the AMH merger remain pending. The company expects reimbursement pressure to continue from Medicare, Medicaid and managed care payers.
Aug 25, 1995
1994-A
Tenet Healthcare Annual Report (Amendment), Year Ended May 31, 1994
National Medical Enterprises, Inc. (NME), a Nevada corporation headquartered in Santa Monica, California, filed this Amendment No. 1 to its Form 10-K for the fiscal year ended May 31, 1994. The amendment's sole purpose is to revise the Report of Independent Auditors in Exhibit 13 (the 1994 Annual Report to Shareholders), which originally failed to refer to a change in accounting policy adopted during fiscal 1994 (the adoption of SFAS No. 109 on income taxes, which produced a $60 million cumulative-effect gain). The annual report describes a year of major transition: the company settled its most significant legal matters, including a $362.7 million federal settlement, a $16.3 million settlement with 27 states and the District of Columbia, and insurance litigation settlements, and it has refocused on general hospitals after discontinuing its psychiatric business. Financially, fiscal 1994 net operating revenues were $2,967 million, down from $3,191 million, largely due to the sale of rehabilitation hospitals. Income from continuing operations was $216 million, or $1.23 per fully diluted share, compared with $1.49 in fiscal 1993. The psychiatric discontinued operations produced a loss of $701 million, resulting in a net loss of $425 million, or $(2.54) per share. Total debt fell to $834 million from $1,177 million, and the total debt-to-equity ratio improved to 0.63:1 from 0.67:1. Working capital was a deficit of $196 million, reflecting a $424 million increase in the current portion of long-term debt, most of which matures in April 1995. Investors should note that the company suspended its common dividend in October 1993, that the company reported no unused committed revolving credit availability, and that it was seeking new lines of credit to refinance the debt maturing in April 1995. Management also reported reserves of approximately $81 million for remaining legal proceedings, while acknowledging that the ultimate liability could exceed these estimates.
Jan 18, 1995
1994
Tenet Healthcare Annual Report, Year Ended May 31, 1994
National Medical Enterprises, Inc. (NME), a Nevada corporation headquartered in Santa Monica, California, filed this annual report for the fiscal year ended May 31, 1994. The year was dominated by resolving legal and regulatory matters: NME settled federal investigations for $362.7 million, agreed in principle to pay $16.3 million to 27 states and the District of Columbia, and settled insurance litigation with payments of $125 million and $89.9 million. The company decided in November 1993 to discontinue its psychiatric hospital business, which produced a discontinued-operations loss of $701 million for the year. Net loss for fiscal 1994 was $425 million, compared with net income of $160 million in fiscal 1993. Continuing operations were refocused on general hospitals. Income from continuing operations was $216 million, or $1.23 per fully diluted share, versus $264 million and $1.49 in fiscal 1993. Net operating revenues fell to $2.967 billion from $3.191 billion as 28 rehabilitation hospitals were sold to HEALTHSOUTH for approximately $350 million. The company reported 33 domestic and 13 international general hospitals, and a $77 million restructuring reserve was recorded in the fourth quarter. Total debt was reduced to $834 million, and the debt-to-equity ratio improved to 0.63:1 from 0.67:1. Working capital was negative at ($196) million, driven by a $424 million increase in the current portion of long-term debt, most of which matures in April 1995. Investors should weigh the remaining exposures as well as the progress. Reserves for unsettled litigation total approximately $81 million, shareholder class actions are in mediation, and the company suspended its common dividend in October 1993. Its Hillhaven relationship was restructured, and its stake in Hillhaven now totals about 32.9% of common stock. A planned sale of the Santa Monica headquarters and the pending Charter Medical sales of psychiatric facilities, which face FTC review, remain open items.
Aug 26, 1994