Nevada | 1-7293 | 95-2557091 | ||
(State of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01. | Completion of Acquisition or Disposition of Assets. |
Item 7.01. | Regulation FD Disclosure. |
Item 9.01. | Financial Statements and Exhibits. |
TENET HEALTHCARE CORPORATION | ||
January 29, 2019 | By: | /s/ R. Scott Ramsey |
R. Scott Ramsey | ||
Vice President and Controller | ||
(Principal Accounting Officer) | ||
Historical | Pro Forma Adjustments | Pro Forma | ||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 500 | $ | 42 | (a) | $ | 542 | |||||||
Accounts receivable, less allowance for doubtful accounts | 2,484 | 2,484 | ||||||||||||
Inventories of supplies, at cost | 307 | 307 | ||||||||||||
Income tax receivable | 27 | 27 | ||||||||||||
Assets held for sale | 128 | (112 | ) | (a) | 16 | |||||||||
Other current assets | 1,046 | 1,046 | ||||||||||||
Total current assets | 4,492 | (70 | ) | 4,422 | ||||||||||
Investments and other assets | 1,462 | 20 | (a) | 1,482 | ||||||||||
Deferred income taxes | 348 | 348 | ||||||||||||
Property and equipment, at cost, less accumulated depreciation and amortization | 6,888 | 6,888 | ||||||||||||
Goodwill | 7,313 | 7,313 | ||||||||||||
Other intangible assets, at cost, less accumulated amortization | 1,762 | 1,762 | ||||||||||||
Total assets | $ | 22,265 | $ | (50 | ) | $ | 22,215 | |||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Current portion of long-term debt | $ | 672 | $ | 672 | ||||||||||
Accounts payable | 1,065 | 1,065 | ||||||||||||
Accrued compensation and benefits | 814 | 814 | ||||||||||||
Professional and general liability reserves | 230 | 230 | ||||||||||||
Accrued interest payable | 330 | 330 | ||||||||||||
Liabilities held for sale | 71 | $ | (49 | ) | (a) | 22 | ||||||||
Other current liabilities | 1,042 | (1 | ) | (a) | 1,041 | |||||||||
Total current liabilities | 4,224 | (50 | ) | 4,174 | ||||||||||
Long-term debt, net of current portion | 14,178 | 14,178 | ||||||||||||
Professional and general liability reserves | 627 | 627 | ||||||||||||
Defined benefit plan obligations | 476 | 476 | ||||||||||||
Deferred income taxes | 36 | 36 | ||||||||||||
Other long-term liabilities | 622 | 622 | ||||||||||||
Total liabilities | 20,163 | (50 | ) | 20,113 | ||||||||||
Commitments and contingencies | ||||||||||||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | 1,444 | 1,444 | ||||||||||||
Equity: | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock | 7 | 7 | ||||||||||||
Additional paid-in capital | 4,733 | 4,733 | ||||||||||||
Accumulated other comprehensive loss | (202 | ) | (202 | ) | ||||||||||
Accumulated deficit | (2,231 | ) | — | (a) | (2,231 | ) | ||||||||
Common stock in treasury, at cost | (2,415 | ) | (2,415 | ) | ||||||||||
Total shareholders’ equity | (108 | ) | — | (108 | ) | |||||||||
Noncontrolling interests | 766 | 766 | ||||||||||||
Total equity | 658 | — | 658 | |||||||||||
Total liabilities and equity | $ | 22,265 | $ | (50 | ) | $ | 22,215 |
(a) | Records the net purchase price cash proceeds and recognition of the initial deposit, escrowed proceeds and long-term note receivable related to the sale of the Chicago area hospitals and related facilities, derecognition of the related assets and liabilities held for sale, and the related tax impact from the sale, using an effective rate of 24%, which includes the federal statutory rate of 21% and the applicable state taxes. |
(Dollars in millions except per share amounts) | Historical | Pro Forma Adjustments | Pro Forma | |||||||||||
Net operating revenues: | ||||||||||||||
Net operating revenues before provision for doubtful accounts | $ | 20,613 | $ | (322 | ) | (a) | $ | 20,291 | ||||||
Less: Provision for doubtful accounts | 1,434 | (15 | ) | (a) | 1,419 | |||||||||
Net operating revenues | 19,179 | (307 | ) | 18,872 | ||||||||||
Equity in earnings of unconsolidated affiliates | 144 | 144 | ||||||||||||
Operating expenses: | ||||||||||||||
Salaries, wages and benefits | 9,274 | (168 | ) | (a) | 9,106 | |||||||||
Supplies | 3,085 | (51 | ) | (a) | 3,034 | |||||||||
Other operating expenses, net | 4,570 | (90 | ) | (a) | 4,480 | |||||||||
Electronic health record incentives | (9 | ) | 1 | (a) | (8 | ) | ||||||||
Depreciation and amortization | 870 | (12 | ) | (a) | 858 | |||||||||
Impairment and restructuring charges, and acquisition-related costs | 541 | (73 | ) | (a) | 468 | |||||||||
Litigation and investigation costs | 23 | 23 | ||||||||||||
Gains on sales, consolidation and deconsolidation of facilities | (144 | ) | (144 | ) | ||||||||||
Operating income | 1,113 | 86 | 1,199 | |||||||||||
Interest expense | (1,028 | ) | (1,028 | ) | ||||||||||
Other non-operating income (expense), net | (22 | ) | (22 | ) | ||||||||||
Loss on early extinguishment of debt | (164 | ) | (164 | ) | ||||||||||
Net loss from continuing operations, before income taxes | (101 | ) | 86 | (15 | ) | |||||||||
Income tax benefit (expense) | (219 | ) | (27 | ) | (b) | (246 | ) | |||||||
Net loss from continuing operations | (320 | ) | 59 | (261 | ) | |||||||||
Less: Net income attributable to noncontrolling interests | 384 | 384 | ||||||||||||
Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders | $ | (704 | ) | $ | 59 | $ | (645 | ) | ||||||
Loss from continuing operations per share attributable to Tenet Healthcare Corporation common shareholders: | ||||||||||||||
Basic | $ | (7.00 | ) | $ | (6.41 | ) | ||||||||
Diluted | $ | (7.00 | ) | $ | (6.41 | ) | ||||||||
Weighted average shares and dilutive securities outstanding (in thousands): | ||||||||||||||
Basic | 100,592 | 100,592 | ||||||||||||
Diluted | 100,592 | 100,592 |
(Dollars in millions except per share amounts) | Historical | Pro Forma Adjustments | Pro Forma | |||||||||||
Net operating revenues | $ | 13,694 | $ | (228 | ) | (a) | $ | 13,466 | ||||||
Equity in earnings of unconsolidated affiliates | 97 | 97 | ||||||||||||
Operating expenses: | ||||||||||||||
Salaries, wages and benefits | 6,478 | (131 | ) | (a) | 6,347 | |||||||||
Supplies | 2,248 | (39 | ) | (a) | 2,209 | |||||||||
Other operating expenses, net | 3,181 | (68 | ) | (a) | 3,113 | |||||||||
Electronic health record incentives | (1 | ) | (1 | ) | ||||||||||
Depreciation and amortization | 602 | 602 | ||||||||||||
Impairment and restructuring charges, and acquisition-related costs | 123 | (17 | ) | (a) | 106 | |||||||||
Litigation and investigation costs | 28 | 28 | ||||||||||||
Gains on sales, consolidation and deconsolidation of facilities | (111 | ) | (111 | ) | ||||||||||
Operating income | 1,243 | 27 | 1,270 | |||||||||||
Interest expense | (758 | ) | (758 | ) | ||||||||||
Other non-operating income (expense), net | (2 | ) | (2 | ) | ||||||||||
Loss from early extinguishment of debt | (2 | ) | (2 | ) | ||||||||||
Net income from continuing operations, before income taxes | 481 | 27 | 508 | |||||||||||
Income tax benefit (expense) | (120 | ) | (7 | ) | (c) | (127 | ) | |||||||
Net income from continuing operations | 361 | 20 | 381 | |||||||||||
Less: Net income attributable to noncontrolling interests | 248 | 248 | ||||||||||||
Net income from continuing operations attributable to Tenet Healthcare Corporation common shareholders | $ | 113 | $ | 20 | $ | 133 | ||||||||
Earnings from continuing operations per share attributable to Tenet Healthcare Corporation common shareholders: | ||||||||||||||
Basic | $ | 1.11 | $ | 1.30 | ||||||||||
Diluted | $ | 1.09 | $ | 1.28 | ||||||||||
Weighted average shares and dilutive securities outstanding (in thousands): | ||||||||||||||
Basic | 101,980 | 101,980 | ||||||||||||
Diluted | 103,802 | 103,802 |
(a) | Eliminates the historical revenue and operating expenses of the divested Chicago area hospitals and related facilities. |
(b) | Reflects the applicable income tax effects of the pro forma adjustments in this column at an effective tax rate of 37%, which includes the federal statutory rate of 35% and the applicable state tax rate that were in effect during the period presented, adjusted for the impact of nondeductible goodwill. Also includes the reversal of $2 million of tax expense related to the impact on deferred taxes of the decrease in the federal statutory rate from 35% to 21% due to the Tax Cuts and Jobs Act enacted December 22, 2017. |
(c) | Reflects the applicable income tax effects of the pro forma adjustments in this column at an effective tax rate of 24%, which includes the federal statutory rate of 21% and the applicable state tax rate that were in effect during the period presented. |
Investor Contact: Brendan Strong 469-893-6992 investorrelations@tenethealth.com | Media Contact: Lesley Bogdanow 469-893-2640 mediarelations@tenethealth.com |