SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2019

Our business consists of our Hospital Operations and other segment, our Ambulatory Care segment and our Conifer segment. The factors for determining the reportable segments include the manner in which management evaluates operating performance combined with the nature of the individual business activities.

Our Hospital Operations and other segment is comprised of our acute care and specialty hospitals, ancillary outpatient facilities, urgent care centers, microhospitals and physician practices. At March 31, 2019, our subsidiaries operated 65 hospitals serving primarily urban and suburban communities in nine states.

Our Ambulatory Care segment is comprised of the operations of USPI and included nine Aspen facilities in the United Kingdom until their divestiture effective August 17, 2018. At March 31, 2019, USPI had interests in 252 ambulatory surgery centers, 36 urgent care centers operated under the CareSpot brand, 23 imaging centers and 23 surgical hospitals in 27 states. At March 31, 2019, we owned 95.0% of USPI.

Our Conifer segment provides healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. At March 31, 2019, Conifer provided services to approximately 730 Tenet and non-Tenet hospitals and other clients nationwide. In 2012, we entered into agreements documenting the terms and conditions of various services Conifer provides to Tenet hospitals, as well as certain administrative services our Hospital Operations and other segment provides to Conifer. The pricing terms for the services provided by each party to the other under these contracts were based on estimated third-party pricing terms in effect at the time the agreements were signed. At March 31, 2019, we owned 76.2% of Conifer Health Solutions, LLC, which is the principal subsidiary of Conifer Holdings, Inc.

The following tables include amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Condensed Consolidated Balance Sheets and in the Condensed Consolidated Statements of Operations, as applicable:



	March 31, 2019		December 31, 2018
Assets:
Hospital Operations and other	$	16,070	$	15,684
Ambulatory Care	6,014		5,711
Conifer	1,074		1,014
Total	$	23,158	$	22,409



	Three Months Ended March 31,
	2019			2018
Capital expenditures:
Hospital Operations and other	$	170		$	120
Ambulatory Care	20			15
Conifer	2			8
Total	$	192		$	143

Net operating revenues:
Hospital Operations and other total prior to inter-segment eliminations(1)	$	3,862		$	3,947
Ambulatory Care	480			498
Conifer
Tenet	146			150
Other customers	203			254
Total Conifer revenues	349			404
Inter-segment eliminations	(146		)	(150		)
Total	$	4,545		$	4,699

Equity in earnings of unconsolidated affiliates:
Hospital Operations and other	$	3		$	(2	)
Ambulatory Care	31			27
Total	$	34		$	25

Adjusted EBITDA(2):
Hospital Operations and other(2)	$	337		$	402
Ambulatory Care	177			165
Conifer	99			98
Total	$	613		$	665

Depreciation and amortization:
Hospital Operations and other	$	179		$	175
Ambulatory Care	18			17
Conifer	11			12
Total	$	208		$	204



	Three Months Ended March 31,
	2019			2018
Adjusted EBITDA(2)	$	613		$	665
Loss from divested and closed businesses (i.e., the Company’s health plan businesses)	(1		)	(1		)
Depreciation and amortization	(208		)	(204		)
Impairment and restructuring charges, and acquisition-related costs	(19		)	(47		)
Litigation and investigation costs	(13		)	(6		)
Interest expense	(251		)	(255		)
Loss from early extinguishment of debt	(47		)	(1		)
Other non-operating income (expense), net	1			(1		)
Net gains (losses) on sales, consolidation and deconsolidation of facilities	(1		)	110
Income from continuing operations, before income taxes	$	74		$	260


(1)	Hospital Operations and other revenues includes health plan revenues of less than $1 million for the three months ended March 31, 2019 and $6 million for the three months ended March 31, 2018, respectively.

(2)

Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of $(1) million for both the three months ended March 31, 2019 and 2018.