Skip to content
AnalystLens

Tenet Healthcare Annual Report, Year Ended May 31, 1997

Filing Date
Filed August 27, 1997
Period End
May 31, 1997
Security
THC
In the record · 2016–202610-K1110-Q338-K176

THC filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 176 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Jan ’18Jan ’18
  2. Material agreement8-K · Sep ’19Sep ’19
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Leadership change8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed August 27, 1997. Cited figures are marked; the original filing is the authoritative source.

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 billiona 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 millionb 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 millionc 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 billiond revolving credit agreement, of which about $2.0 billion was available at May 31, 1997.

02—Key points

Key Highlights

  1. Net operating revenues rose to $8.69 billion in fiscal 1997 from $7.71 billion in fiscal 1996.
  2. The company reported a loss from continuing operations of $73 million, or $(0.24) per fully diluted share, versus income of $498 million, or $1.70 per share, in fiscal 1996.
  3. Merger, facility consolidation and other non-recurring charges totaled $740 million, including $413 million of asset impairment losses and $309 million of OrNda Merger-related expenses.
  4. Excluding unusual and non-recurring items, earnings per share from continuing operations were $1.46, compared with $1.27 in the prior year, according to the Annual Report.
  5. The OrNda HealthCorp acquisition on January 30, 1997 added 50 general hospitals and was accounted for as a pooling-of-interests, with prior periods restated.
  6. Long-term debt, excluding current portion, was $5.02 billion and shareholders' equity was $3.22 billion at May 31, 1997.
  7. Concentration risk: 35.2% of hospitals are in California, 15.6% in Texas and 13.3% in Florida.

03—Questions

Frequently Asked Questions

  1. How did Tenet perform financially in fiscal 1997?

    Tenet reported net operating revenues of $8.69 billion, but a net loss of $254 million, or $(0.84) per primary share, after $740 million of merger and non-recurring charges. Excluding unusual items, the Annual Report states earnings per share from continuing operations were $1.46, up from $1.27.

  2. What drove the large charges in fiscal 1997?

    The charges of $740 million resulted from $309 million in OrNda Merger-related expenses, including severance and office closures, and $413 million of asset impairment losses tied to planned closures or sales of certain hospitals and to write-downs of acquired facilities and physician practices.

  3. How significant was the OrNda acquisition?

    On January 30, 1997, Tenet acquired OrNda HealthCorp by issuing 81,439,910 shares of common stock. The combination added 50 general hospitals to Tenet's 77, and the company's financial statements were restated to include OrNda for all periods presented.

  4. What regulatory risks does the filing highlight?

    The Balanced Budget Act of 1997 reduces Medicare reimbursement in several areas, including a freeze on inpatient DRG rates through September 30, 1998 and reductions in capital cost and home health payments. Management believes the aggregate effect will not have a material adverse effect on overall results of operations.

  5. What is the company's debt and liquidity position?

    At May 31, 1997, long-term debt excluding the current portion was $5.02 billion. The company had a $2.8 billion revolving credit agreement maturing January 31, 2002, with approximately $2.0 billion available, and it reported cash and cash equivalents of $35 million.

04—Continue

← View all 10-K filings