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DALLAS--(BUSINESS WIRE)--Tenet Healthcare Corporation (NYSE: THC) reported net income from continuing operations attributable to Tenet common shareholders of $108 million in 2018 compared to a $704 million net loss from continuing operations in 2017. In the fourth quarter of 2018, the Company reported a $5 million net loss from continuing operations attributable to Tenet common shareholders compared to a net loss of $230 million in the fourth quarter of 2017. Adjusted EBITDA was $2.560 billion in 2018, up 4.7 percent from $2.444 billion in 2017. In the fourth quarter, Adjusted EBITDA was $684 million compared to $840 million in the fourth quarter of 2017; timing differences associated with the California Provider Fee program impact year-over-year comparability in the fourth quarter but do not impact the comparability of full year results.

“We delivered strong results in the fourth quarter and beat consensus expectations for revenue, Adjusted EBITDA and Adjusted EPS,” said Ronald A. Rittenmeyer, Executive Chairman and CEO. “2018 was a year of significant change for the company. We meaningfully improved our financial results, and made significant progress to create a more efficient, agile enterprise with new leadership helping to reshape strategy and drive consistency in execution. We expect to make additional progress in each of our business segments in 2019 in line with our plan to deliver long-term sustainable growth.”

Results for the Quarter Ended December 31, 2018

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $3.843 billion in the fourth quarter of 2018, down 8.4 percent from the fourth quarter of 2017. The decline in revenue was primarily due to hospital divestitures, partially offset by same-hospital revenue growth. The Company’s hospitals in California also faced a difficult comparison in the fourth quarter due to the California Provider Fee program: in the fourth quarter of 2018, the Company recognized $64 million of net revenues from the California Provider Fee program compared to $267 million recognized in the fourth quarter of 2017 due to CMS’ approval of program in December of 2017, which resulted in the full year 2017 revenues all being recognized in the fourth quarter of 2017.

On a same-hospital basis, net patient revenues after implicit price concessions were $3.561 billion in the fourth quarter of 2018, down 1.3 percent from the fourth quarter of 2017. After excluding California Provider Fee revenues in both periods, net patient revenue after implicit price concessions increased 4.6 percent. Adjusted admissions declined 0.8 percent on a same-hospital basis in the fourth quarter of 2018. Revenue per adjusted admission decreased 0.6 percent on a same-hospital basis and increased 5.4 percent after excluding California Provider Fee revenues in both periods.

Adjusted EBITDA in Tenet’s hospital segment was $352 million in the fourth quarter of 2018, a decrease of $186 million or 34.6 percent compared to $538 million in the fourth quarter of 2017. The $186 million decline was primarily due to the $203 million decrease in California Provider Fee revenues discussed above, partially offset by other items. After normalizing for the California Provider Fee program as well as other items that are outlined in an accompanying slide presentation, Adjusted EBITDA in the hospital segment increased by $1 million, or 0.3 percent, in the fourth quarter of 2018; for additional details, please see the investor presentation dated February 25, 2019 that will be accessible through the Company’s website at www.tenethealth.com/investors.

Tenet’s health plan business recognized no revenue or Adjusted EBITDA in the fourth quarter of 2018 versus $10 million of revenue and no Adjusted EBITDA in the fourth quarter of 2017. The revenue and expenses associated with the Company’s health plan operations are included in Tenet’s consolidated statements of operations; however, the results are excluded from Adjusted EBITDA in both periods.

Selected operating expenses in the Hospital Operations and other segment increased 3.5 percent on a per adjusted admission basis in the fourth quarter of 2018 and increased 2.2 percent excluding a $44 million increase in malpractice expense in the hospital segment. Salaries, wages and benefits increased 2.3 percent and supply expense increased 1.0 percent per adjusted admission in the fourth quarter of 2018. Other operating expenses increased 7.9 percent per adjusted admission in the fourth quarter of 2018 and increased 2.7 percent per adjusted admission excluding the increase in malpractice expense.

Ambulatory Care Segment

The Ambulatory Care segment produced net operating revenues of $554 million in the fourth quarter of 2018, an increase of 1.7 percent compared to $545 million in the fourth quarter of 2017. In addition, the Ambulatory Care segment generated Adjusted EBITDA of $245 million in the fourth quarter of 2018, up 9.9 percent from $223 million in the fourth quarter of 2017 and Adjusted EBITDA less facility-level noncontrolling interest expense was $151 million, up 4.1 percent from $145 million in the fourth quarter of 2017. After normalizing for the divestiture of Aspen, Adjusted EBITDA less facility-level noncontrolling interest expense increased 7.1 percent in the fourth quarter of 2018; Aspen was divested on August 17, 2018 and generated $4 million of EBITDA less facility-level noncontrolling interest in the fourth quarter of 2017.

The results of many of the facilities in which the Ambulatory Care segment has an investment are not consolidated by Tenet (of the 337 facilities at December 31, 2018, the results of 110 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 3.8 percent in the fourth quarter of 2018, with cases increasing 0.9 percent and revenue per case increasing 2.8 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory segment, same-facility system-wide revenue grew 3.7 percent in the fourth quarter of 2018, with cases up 1.1 percent and revenue per case up 2.6 percent.

Conifer Segment

During the fourth quarter of 2018, Conifer’s revenue declined 5.6 percent to $372 million, primarily due to client attrition following divestitures by Tenet and other customers, down from $394 million in the fourth quarter of 2017. Revenue from third party customers declined 7.1 percent to $222 million in the fourth quarter of 2018.

Conifer generated $87 million of Adjusted EBITDA in the fourth quarter of 2018, up 10.1 percent from $79 million in the fourth quarter of 2017, with Adjusted EBITDA margins increasing 330 basis points to 23.4 percent.

Net Income and Earnings Per Share

Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $5 million, or $0.05 per diluted share, in the fourth quarter of 2018 compared to a net loss of $230 million, or $2.28 per diluted share, in the fourth quarter of 2017.

After adjusting for the items listed on Table #2, Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $53 million, or $0.51 per diluted share, in the fourth quarter of 2018, compared to Adjusted net income from continuing operations attributable to Tenet common shareholders of $143 million, or $1.40 per diluted share, in the fourth quarter of 2017.

A reconciliation of GAAP net income available (loss attributable) to Tenet common shareholders to Adjusted net income available (loss attributable) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations is contained in Table #2 at the end of this release.

Results for the Year Ended December 31, 2018

Hospital Operations and Other Segment

Net operating revenues in the Hospital Operations and other segment were $15.285 billion in 2018, down 6.0 percent from 2017. The decline in revenue was primarily due to hospital divestitures, partially offset by same-hospital revenue growth. Revenue from the California Provider Fee program did not impact year-over-year comparability with $262 million of revenue recognized in 2018 compared to $267 million recognized in 2017.

On a same-hospital basis, net patient revenues after implicit price concessions were $13.995 billion in 2018, up 3.6 percent from 2017. Adjusted admissions were essentially unchanged in 2018 on a same-hospital basis. Revenue per adjusted admission increased 3.6 percent on a same-hospital basis in 2018.

Adjusted EBITDA in Tenet’s hospital segment was $1.411 billion in 2018, a decrease of $51 million or 3.5 percent compared to $1.462 billion in 2017. The $51 million decline was primarily due to an $88 million decline related to divestitures, partially offset by other items. As a group, divested facilities generated Adjusted EBITDA of negative $37 million in 2018 compared to positive $51 million in 2017. After normalizing for divestitures as well as other items that are outlined in an accompanying slide presentation, Adjusted EBITDA in the hospital segment increased by $34 million, or 2.4 percent, in 2018; for additional details, please see the investor presentation dated February 25, 2019 that will be accessible through the Company’s website at www.tenethealth.com/investors.

Tenet’s health plan business recognized $14 million of revenue and $9 million of Adjusted EBITDA in 2018 versus $110 million of revenue and negative $41 million of Adjusted EBITDA in 2017. The revenue and expenses associated with the Company’s health plan operations are included in Tenet’s consolidated statements of operations; however, the results are excluded from Adjusted EBITDA in both periods.

Selected operating expenses in the Hospital Operations and other segment, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased 3.1 percent on a per adjusted admission basis in 2018 and increased 2.4 percent excluding an $85 million increase in malpractice expense in the hospital segment. Salaries, wages and benefits increased 1.3 percent and supply expense increased 4.5 percent per adjusted admission in 2018. Other operating expenses increased 5.6 percent per adjusted admission and increased 3.1 percent excluding the increase in malpractice expense.

Ambulatory Care Segment

The Ambulatory Care segment produced net operating revenues of $2.085 billion in 2018, an increase of 7.5 percent compared to $1.940 billion in 2017. In addition, the Ambulatory Care segment generated Adjusted EBITDA of $792 million, up 13.3 percent from $699 million in 2017 and Adjusted EBITDA less facility-level noncontrolling interest expense was $504 million, up 10.8 percent from $455 million in 2017. After normalizing for the divestiture of Aspen, Adjusted EBITDA less facility-level noncontrolling interest expense increased 12.7 percent in 2018; Aspen was divested on August 17, 2018 and generated $16 million and $22 million of EBITDA less facility-level noncontrolling interest in 2018 and 2017, respectively.

On a same-facility system-wide basis, revenue in the Ambulatory Care segment increased 5.1 percent in 2018, with cases increasing 3.4 percent and revenue per case increasing 1.6 percent. In the surgical business, which represents the majority of the revenue in the Ambulatory Care segment, same-facility system-wide revenue grew 4.9 percent in 2018, with cases up 2.1 percent and revenue per case up 2.7 percent.

Conifer Segment

During 2018, Conifer’s revenue decreased 4.0 percent to $1.533 billion, primarily due to client attrition following divestitures by Tenet and other customers, down from $1.597 billion in 2017. Revenue from third party customers declined 3.7 percent to $943 million in 2018.

Conifer generated $357 million of Adjusted EBITDA in 2018, up 26.1 percent from $283 million in 2017, with Adjusted EBITDA margins increasing 560 basis points to 23.3 percent.

Net Income and Earnings Per Share

Tenet reported net income from continuing operations attributable to Tenet common shareholders of $108 million, or $1.04 per diluted share, in 2018 compared to a net loss of $704 million, or $7.00 per diluted share, in 2017.

After adjusting for the items listed on Table #2, Tenet produced Adjusted net income from continuing operations available to Tenet common shareholders of $193 million, or $1.86 per diluted share, in 2018, compared to Adjusted net income from continuing operations attributable to Tenet common shareholders of $82 million, or $0.81 per diluted share, in 2017.

A reconciliation of GAAP net income available (loss attributable) to Tenet common shareholders to Adjusted net income available (loss attributable) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations is contained in Table #2 at the end of this release.

Cash Flow and Liquidity

Cash and cash equivalents were $411 million at December 31, 2018 compared to $500 million at September 30, 2018. The Company had no outstanding borrowings on its $1 billion credit line as of December 31, 2018. Accounts receivable days outstanding from continuing operations were 56.8 at December 31, 2018 compared to 56.3 at September 30, 2018 and 55.8 at December 31, 2017.

Net cash provided by operating activities was $1.049 billion in 2018, representing a $151 million decrease compared to $1.200 billion in 2017. After subtracting $617 million and $707 million of capital expenditures in 2018 and 2017, respectively, Free Cash Flow was $432 million in 2018, a decrease of $61 million compared to $493 million in 2017. Adjusted Free Cash Flow was $600 million in 2018, representing a $23 million decrease from $623 million in 2017.

Net cash used in investing activities was $115 million in 2018 compared to $21 million of net cash provided by investing activities in 2017. The 2018 period included $742 million of proceeds from the sales of facilities, long-term investments and other assets (note that Company received an additional $42 million in the first quarter of 2019 from the sale of three Chicago-area hospitals, which represents the completion of the previously announced divestiture program). The 2018 period also included $240 million of purchases of businesses, joint ventures and equity investments, primarily related to USPI’s acquisition program.

Net cash used in financing activities was $1.134 billion in 2018 compared to $1.326 billion in 2017. The 2018 period included $647 million in purchases of noncontrolling interests (including approximately $630 million in the second quarter of 2018 to increase Tenet’s ownership in USPI to 95 percent, up from 80 percent), $288 million of distributions paid to noncontrolling interests and $145 million of cash to retire $150 million of debt through open market purchases.

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 $18.0 billion to $18.4 billion,
• Net income from continuing operations available to Tenet common shareholders of $15 million to $115 million,
• Adjusted EBITDA of $2.650 billion to $2.750 billion,
• Net cash provided by operating activities of $1.070 billion to $1.375 billion,
• Adjusted Free Cash Flow of $600 million to $800 million,
• Diluted earnings per share from continuing operations of $0.14 to $1.08, and
• Adjusted diluted earnings per share from continuing operations of $2.08 to $2.59.

The Outlook for 2019 assumes equity in earnings of unconsolidated affiliates of $180 million to $190 million, depreciation and amortization expense of $805 million to $825 million, interest expense of $985 million to $995 million, net income available to noncontrolling interests of $425 million to $445 million and an average diluted share count of 106 million.

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

• Revenue of $4.300 billion to $4.600 billion,
• Net income available (loss attributable) from continuing operations to Tenet common shareholders ranging from a loss of $70 million to a loss of $25 million,
• Adjusted EBITDA of $575 million to $625 million,
• Diluted earnings (loss) per share from continuing operations ranging from a loss of $0.68 to a loss of $0.24, and
• Adjusted diluted earnings per share from continuing operations ranging from $0.10 to $0.43.

The Outlook for the first quarter assumes equity in earnings of unconsolidated affiliates of $30 million to $35 million, depreciation and amortization expense of $200 million to $205 million, interest expense of $250 million to $260 million, net income available to noncontrolling interests of $80 million to $90 million, and an average diluted share count of 104 million.

Additional details on Tenet’s Outlook for both the first 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 Fourth Quarter Results

Tenet management will discuss the Company’s fourth quarter 2018 results on a webcast scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 26, 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 Quarterly Results section of the Company’s website.

Additional information regarding Tenet’s quarterly results of operations is contained in its Form 10-K report for the period ended December 31, 2018, 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 (loss) 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.

Tenet Healthcare Corporation (NYSE: THC) is a national diversified healthcare services company headquartered in Dallas, TX, 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 outpatient facilities. 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. At the center of everything we do is a commitment to deliver the right care, in the right place, at the right time, and to continually improve and advance the healthcare delivery system in the markets we serve. For more information, please visit www.tenethealth.com.

The terms “THC”, “Tenet Healthcare Corporation”, “the company”, “we”, “us” or “our” refer to Tenet Healthcare Corporation or one or more of its subsidiaries or affiliates as applicable.

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 uses its Company website to provide important information to investors about the Company including the posting of important announcements regarding financial performance and corporate developments.

TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in millions except per share amounts)			Three Months Ended December 31,
			2018					%				2017					%				Change
Net operating revenues:
Net operating revenues before provision for doubtful accounts												$	5,303
Less: Provision for doubtful accounts													325
Net operating revenues			$	4,619				100.0	%				4,978				100.0	%			(7.2	)%
Equity in earnings of unconsolidated affiliates				53				1.1	%				49				1.0	%			8.2	%
Operating expenses:
Salaries, wages and benefits				2,156				46.7	%				2,284				45.9	%			(5.6	)%
Supplies				756				16.4	%				800				16.1	%			(5.5	)%
Other operating expenses, net				1,078				23.3	%				1,104				22.1	%			(2.4	)%
Electronic health record incentives				(2	)			—	%				(1	)			—	%			100.0	%
Depreciation and amortization				200				4.3	%				208				4.2	%
Impairment and restructuring charges, and acquisition-related costs				86				1.9	%				138				2.8	%
Litigation and investigation costs				10				0.2	%				11				0.2	%
Net gains on sales, consolidation and deconsolidation of facilities				(16	)			(0.4	)%				(2	)			—	%
Operating income				404				8.7	%				485				9.7	%
Interest expense				(246	)								(253	)
Other non-operating expense, net				(3	)								(8	)
Gain (loss) from early extinguishment of debt				3									—
Income from continuing operations, before income taxes				158									224
Income tax expense				(56	)								(324	)
Income (loss) from continuing operations, before discontinued operations				102									(100	)
Discontinued operations:
Income from operations				1									1
Income tax benefit (expense)				(1	)								—
Income (loss) from discontinued operations				—									1
Net income (loss)				102									(99	)
Less: Net income available to noncontrolling interests				107									130
Net loss attributable to Tenet Healthcare Corporation common shareholders			$	(5	)							$	(229	)
Amounts attributable to Tenet Healthcare Corporation common shareholders
Loss from continuing operations, net of tax			$	(5	)							$	(230	)
Income (loss) from discontinued operations, net of tax				—									1
Net loss attributable to Tenet Healthcare Corporation common shareholders			$	(5	)							$	(229	)
Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations			$	(0.05	)							$	(2.28	)
Discontinued operations				—									0.01
			$	(0.05	)							$	(2.27	)
Diluted
Continuing operations			$	(0.05	)							$	(2.28	)
Discontinued operations				—									0.01
			$	(0.05	)							$	(2.27	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic				102,501									100,945
Diluted*				102,501									100,945

*		Had we generated income from continuing operations in the three months ended December 31, 2018 and 2017 the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 1,617 thousand and 908 thousand shares, respectively.

TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in millions except per share amounts)			Years Ended December 31,
			2018					%				2017					%				Change
Net operating revenues:
Net operating revenues before provision for doubtful accounts												$	20,613
Less: Provision for doubtful accounts													1,434
Net operating revenues			$	18,313				100.0	%				19,179				100.0	%			(4.5	)%
Equity in earnings of unconsolidated affiliates				150				0.8	%				144				0.8	%			4.2	%
Operating expenses:
Salaries, wages and benefits				8,634				47.1	%				9,274				48.4	%			(6.9	)%
Supplies				3,004				16.4	%				3,085				16.1	%			(2.6	)%
Other operating expenses, net				4,259				23.3	%				4,570				23.8	%			(6.8	)%
Electronic health record incentives				(3	)			—	%				(9	)			—	%			(66.7	)%
Depreciation and amortization				802				4.4	%				870				4.5	%
Impairment and restructuring charges, and acquisition-related costs				209				1.1	%				541				2.8	%
Litigation and investigation costs				38				0.2	%				23				0.1	%
Net gains on sales, consolidation and deconsolidation of facilities				(127	)			(0.7	)%				(144	)			(0.7	)%
Operating income				1,647				9.0	%				1,113				5.8	%
Interest expense				(1,004	)								(1,028	)
Other non-operating expense, net				(5	)								(22	)
Gain (loss) from early extinguishment of debt				1									(164	)
Income (loss) from continuing operations, before income taxes				639									(101	)
Income tax expense				(176	)								(219	)
Income (loss) from continuing operations, before discontinued operations				463									(320	)
Discontinued operations:
Income (loss) from operations				4									—
Income tax benefit (expense)				(1	)								—
Income (loss) from discontinued operations				3									—
Net income (loss)				466									(320	)
Less: Net income available to noncontrolling interests				355									384
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders			$	111								$	(704	)
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax			$	108								$	(704	)
Income (loss) from discontinued operations, net of tax				3									—
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders			$	111								$	(704	)
Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations			$	1.06								$	(7.00	)
Discontinued operations				0.03									—
			$	1.09								$	(7.00	)
Diluted
Continuing operations			$	1.04								$	(7.00	)
Discontinued operations				0.03									—
			$	1.07								$	(7.00	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic				102,110									100,592
Diluted*				103,881									100,592

*		Had we generated income from continuing operations in the twelve months ended December 31, 2017, the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase of 788 thousand shares.

TENET HEALTHCARE CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
			December 31,					December 31,
(Dollars in millions)			2018					2017
ASSETS
Current assets:
Cash and cash equivalents			$	411				$	611
Accounts receivable, less allowance for doubtful accounts			2,595					2,616
Inventories of supplies, at cost			305					289
Income tax receivable			21					5
Assets held for sale			107					1,017
Other current assets			1,197					1,035
Total current assets			4,636					5,573
Investments and other assets			1,456					1,543
Deferred income taxes			312					455
Property and equipment, at cost, less accumulated depreciation and amortization			6,993					7,030
Goodwill			7,281					7,018
Other intangible assets, at cost, less accumulated amortization			1,731					1,766
Total assets			$	22,409				$	23,385
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt			$	182				$	146
Accounts payable			1,207					1,175
Accrued compensation and benefits			838					848
Professional and general liability reserves			216					200
Accrued interest payable			240					256
Liabilities held for sale			43					480
Other current liabilities			1,131					1,227
Total current liabilities			3,857					4,332
Long-term debt, net of current portion			14,644					14,791
Professional and general liability reserves			666					654
Defined benefit plan obligations			521					536
Deferred income taxes			36					36
Other long-term liabilities			578					631
Total liabilities			20,302					20,980
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries			1,420					1,866
Equity:
Shareholders’ equity:
Common stock			7					7
Additional paid-in capital			4,747					4,859
Accumulated other comprehensive loss			(223		)			(204		)
Accumulated deficit			(2,236		)			(2,390		)
Common stock in treasury, at cost			(2,414		)			(2,419		)
Total shareholders’ deficit			(119		)			(147		)
Noncontrolling interests			806					686
Total equity			687					539
Total liabilities and equity			$	22,409				$	23,385

TENET HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)
			Years Ended
(Dollars in millions)			December 31,
			2018					2017
Net income (loss)			$	466				$	(320	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			802					870
Provision for doubtful accounts			—					1,434
Deferred income tax expense			150					200
Stock-based compensation expense			46					59
Impairment and restructuring charges, and acquisition-related costs			209					541
Litigation and investigation costs			38					23
Net gains on sales, consolidation and deconsolidation of facilities			(127		)			(144		)
Loss (gain) from early extinguishment of debt			(1		)			164
Equity in earnings of unconsolidated affiliates, net of distributions received			(12		)			(18		)
Amortization of debt discount and debt issuance costs			45					44
Pre-tax loss (income) from discontinued operations			(4		)			—
Other items, net			(21		)			(18		)
Changes in cash from operating assets and liabilities:
Accounts receivable			(134		)			(1,448		)
Inventories and other current assets			17					(35		)
Income taxes			(3		)			(38		)
Accounts payable, accrued expenses and other current liabilities			(152		)			(10		)
Other long-term liabilities			(102		)			26
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements			(163		)			(125		)
Net cash used in operating activities from discontinued operations, excluding income taxes			(5		)			(5		)
Net cash provided by operating activities			1,049					1,200
Cash flows from investing activities:
Purchases of property and equipment — continuing operations			(617		)			(707		)
Purchases of businesses or joint venture interests, net of cash acquired			(113		)			(50		)
Proceeds from sales of facilities and other assets			543					827
Proceeds from sales of marketable securities, long-term investments and other assets			199					36
Purchases of equity investments			(127		)			(68		)
Other long-term assets			15					(10		)
Other items, net			(15		)			(7		)
Net cash provided by (used in) investing activities			(115		)			21
Cash flows from financing activities:
Repayments of borrowings under credit facility			(950		)			(970		)
Proceeds from borrowings under credit facility			950					970
Repayments of other borrowings			(312		)			(4,139		)
Proceeds from other borrowings			23					3,795
Debt issuance costs			—					(62		)
Distributions paid to noncontrolling interests			(288		)			(258		)
Proceeds from sale of noncontrolling interests			20					31
Purchases of noncontrolling interests			(647		)			(729		)
Proceeds from exercise of stock options and employee stock purchase plan			16					7
Other items, net			54					29
Net cash used in financing activities			(1,134		)			(1,326		)
Net decrease in cash and cash equivalents			(200		)			(105		)
Cash and cash equivalents at beginning of period			611					716
Cash and cash equivalents at end of period			$	411				$	611
Supplemental disclosures:
Interest paid, net of capitalized interest			$	(976	)			$	(939	)
Income tax payments, net			$	(25	)			$	(56	)

TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) (Unaudited)
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)			Three Months Ended December 31,															Years Ended December 31,
			2018					2017					Change					2018					2017					Change
Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)			68					72					(4	)	*			68					72					(4	)	*
Total admissions			170,407					186,185					(8.5	)%				689,367					758,875					(9.2	)%
Adjusted patient admissions			308,113					332,642					(7.4	)%				1,241,241					1,354,266					(8.3	)%
Paying admissions (excludes charity and uninsured)			160,172					176,158					(9.1	)%				648,071					717,498					(9.7	)%
Charity and uninsured admissions			10,235					10,027					2.1	%				41,296					41,377					(0.2	)%
Admissions through emergency department			120,012					123,887					(3.1	)%				476,851					492,660					(3.2	)%
Paying admissions as a percentage of total admissions			94.0		%			94.6		%			(0.6	)%	*			94.0		%			94.5		%			(0.5	)%	*
Charity and uninsured admissions as a percentage of total admissions			6.0		%			5.4		%			0.6	%	*			6.0		%			5.5		%			0.5	%	*
Emergency department admissions as a percentage of total admissions			70.4		%			66.5		%			3.9	%	*			69.2		%			64.9		%			4.3	%	*
Surgeries — inpatient			45,897					50,292					(8.7	)%				185,020					205,114					(9.8	)%
Surgeries — outpatient			62,638					68,604					(8.7	)%				250,919					276,895					(9.4	)%
Total surgeries			108,535					118,896					(8.7	)%				435,939					482,009					(9.6	)%
Patient days — total			779,728					857,728					(9.1	)%				3,166,815					3,509,056					(9.8	)%
Adjusted patient days			1,383,372					1,505,130					(8.1	)%				5,608,653					6,163,961					(9.0	)%
Average length of stay (days)			4.58					4.61					(0.7	)%				4.59					4.62					(0.7	)%
Licensed beds (at end of period)			17,937					19,141					(6.3	)%				17,937					19,141					(6.3	)%
Average licensed beds			17,935					19,320					(7.2	)%				18,321					19,995					(8.4	)%
Utilization of licensed beds			47.3		%			48.3		%			(1.0	)%	*			47.4		%			48.1		%			(0.7	)%	*
Outpatient Visits
Total visits			1,734,523					1,901,864					(8.8	)%				7,049,201					7,791,125					(9.5	)%
Paying visits (excludes charity and uninsured)			1,617,970					1,777,790					(9.0	)%				6,584,502					7,277,514					(9.5	)%
Charity and uninsured visits			116,553					124,074					(6.1	)%				464,699					513,611					(9.5	)%
Emergency department visits			649,544					711,268					(8.7	)%				2,627,829					2,854,200					(7.9	)%
Paying visits as a percentage of total visits			93.3		%			93.5		%			(0.2	)%	*			93.4		%			93.4		%			0.0	%	*
Charity and uninsured visits as a percentage of total visits			6.7		%			6.5		%			0.2	%	*			6.6		%			6.6		%			0.0	%	*
Total emergency department admissions and visits			769,556					835,155					(7.9	)%				3,104,680					3,346,860					(7.2	)%
Revenues
Net patient revenues(3)			$	3,561				$	3,860				(7.7	)%				$	14,081				$	14,829				(5.0	)%
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient revenue(3) per adjusted patient admission			$	11,557				$	11,604				(0.4	)%				$	11,344				$	10,950				3.6	%
Net patient revenue(3) per adjusted patient day			$	2,574				$	2,565				0.4	%				$	2,511				$	2,406				4.4	%
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)			$	10,861				$	10,492				3.5	%				$	10,701				$	10,384				3.1	%
Net Patient Revenues (3) from:
Medicare			20.1		%			20.4		%			(0.3	)%	*			20.5		%			21.9		%			(1.4	)%	*
Medicaid			9.1		%			12.9		%			(3.8	)%	*			9.2		%			8.8		%			0.4	%	*
Managed care			65.8		%			61.5		%			4.3	%	*			65.4		%			64.6		%			0.8	%	*
Self-pay			0.5		%			1.3		%			(0.8	)%	*			0.7		%			0.6		%			0.1	%	*
Indemnity and other			4.5		%			3.9		%			0.6	%	*			4.2		%			4.1		%			0.1	%	*

(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 and provision for doubtful accounts.
*		This change is the difference between the 2018 and 2017 amounts shown.

TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) (Unaudited)
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)			Three Months Ended December 31,															Years Ended December 31,
			2018					2017					Change					2018					2017					Change
Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)			68					68					—		*			68					68					—		*
Total admissions			170,407					175,152					(2.7	)%				684,933					696,590					(1.7	)%
Adjusted patient admissions			308,113					310,485					(0.8	)%				1,232,150					1,232,200					—	%
Paying admissions (excludes charity and uninsured)			160,173					165,400					(3.2	)%				643,828					658,296					(2.2	)%
Charity and uninsured admissions			10,234					9,752					4.9	%				41,105					38,294					7.3	%
Admissions through emergency department			120,012					116,901					2.7	%				474,606					454,364					4.5	%
Paying admissions as a percentage of total admissions			94.0		%			94.4		%			(0.4	)%	*			94.0		%			94.5		%			(0.5	)%	*
Charity and uninsured admissions as a percentage of total admissions			6.0		%			5.6		%			0.4	%	*			6.0		%			5.5		%			0.5	%	*
Emergency department admissions as a percentage of total admissions			70.4		%			66.7		%			3.7	%	*			69.3		%			65.2		%			4.1	%	*
Surgeries — inpatient			45,897					47,350					(3.1	)%				183,520					188,853					(2.8	)%
Surgeries — outpatient			62,638					63,410					(1.2	)%				248,770					250,726					(0.8	)%
Total surgeries			108,535					110,760					(2.0	)%				432,290					439,579					(1.7	)%
Patient days — total			779,728					805,567					(3.2	)%				3,148,094					3,220,528					(2.2	)%
Adjusted patient days			1,383,372					1,402,038					(1.3	)%				5,569,440					5,605,146					(0.6	)%
Average length of stay (days)			4.58					4.60					(0.4	)%				4.60					4.62					(0.4	)%
Licensed beds (at end of period)			17,937					17,946					(0.1	)%				17,937					17,946					(0.1	)%
Average licensed beds			17,935					17,970					(0.2	)%				17,940					17,980					(0.2	)%
Utilization of licensed beds			47.3		%			48.7		%			(1.4	)%	*			48.1		%			49.1		%			(1.0	)%	*
Outpatient Visits
Total visits			1,734,523					1,771,336					(2.1	)%				6,999,028					7,064,412					(0.9	)%
Paying visits (excludes charity and uninsured)			1,617,974					1,653,582					(2.2	)%				6,537,366					6,605,226					(1.0	)%
Charity and uninsured visits			116,549					117,754					(1.0	)%				461,662					459,186					0.5	%
Emergency department visits			649,544					659,617					(1.5	)%				2,613,018					2,583,612					1.1	%
Paying visits as a percentage of total visits			93.3		%			93.4		%			(0.1	)%	*			93.4		%			93.5		%			(0.1	)%	*
Charity and uninsured visits as a percentage of total visits			6.7		%			6.6		%			0.1	%	*			6.6		%			6.5		%			0.1	%	*
Total emergency department admissions and visits			769,556					776,518					(0.9	)%				3,087,624					3,037,976					1.6	%
Revenues
Net patient revenues(2)			$	3,561				$	3,609				(1.3	)%				$	13,995				$	13,514				3.6	%
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient revenue(2) per adjusted patient admission			$	11,557				$	11,624				(0.6	)%				$	11,358				$	10,967				3.6	%
Net patient revenue(2) per adjusted patient day			$	2,574				$	2,574				—	%				$	2,513				$	2,411				4.2	%
Net Patient Revenues (2) from:
Medicare			20.1		%			20.3		%			(0.2	)%	*			20.4		%			21.9		%			(1.5	)%	*
Medicaid			9.1		%			13.2		%			(4.1	)%	*			9.2		%			8.7		%			0.5	%	*
Managed care			65.9		%			61.0		%			4.9	%	*			65.4		%			64.4		%			1.0	%	*
Self-pay			0.5		%			1.5		%			(1.0	)%	*			0.7		%			0.7		%			—	%	*
Indemnity and other			4.4		%			4.0		%			0.4	%	*			4.3		%			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 68 hospitals operated throughout the twelve months ended December 31, 2018 and 2017, and associated outpatient facilities but excludes the results of hospitals that Tenet began operating, as well as hospitals Tenet divested, since January 1, 2017.
(2)		Less implicit price concessions and provision for doubtful accounts.
*		This change is the difference between the 2018 and 2017 amounts shown.

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 benefit (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 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in millions except per share amounts)			Three Months Ended																				Year Ended
			3/31/2017					6/30/2017					9/30/2017					12/31/2017					12/31/2017
Net operating revenues:
Net operating revenues before provision for doubtful accounts			$	5,196				$	5,173				$	4,941				$	5,303				$	20,613
Less: Provision for doubtful accounts			383					371					355					325					1,434
Net operating revenues			4,813					4,802					4,586					4,978					19,179
Equity in earnings of unconsolidated affiliates			29					28					38					49					144
Operating expenses:
Salaries, wages and benefits			2,380					2,346					2,264					2,284					9,274
Supplies			765					780					740					800					3,085
Other operating expenses, net			1,187					1,159					1,120					1,104					4,570
Electronic health record incentives			(1		)			(6		)			(1		)			(1		)			(9		)
Depreciation and amortization			221					222					219					208					870
Impairment and restructuring charges, and acquisition-related costs			33					41					329					138					541
Litigation and investigation costs			5					1					6					11					23
Net gains on sales, consolidation and deconsolidation of facilities			(15		)			(23		)			(104		)			(2		)			(144		)
Operating income			267					310					51					485					1,113
Interest expense			(258		)			(260		)			(257		)			(253		)			(1,028		)
Other non-operating expense, net			(5		)			(5		)			(4		)			(8		)			(22		)
Loss from early extinguishment of debt			—					(26		)			(138		)			—					(164		)
Income (loss) from continuing operations, before income taxes			4					19					(348		)			224					(101		)
Income tax benefit (expense)			33					12					60					(324		)			(219		)
Income (loss) from continuing operations, before discontinued operations			37					31					(288		)			(100		)			(320		)
Discontinued operations:
Income (loss) from operations			(2		)			2					(1		)			1					—
Income tax benefit (expense)			1					(1		)			—					—					—
Income (loss) from discontinued operations			(1		)			1					(1		)			1					—
Net income (loss)			36					32					(289		)			(99		)			(320		)
Less: Net income available to noncontrolling interests			89					87					78					130					384
Net loss attributable to Tenet Healthcare Corporation common shareholders			$	(53	)			$	(55	)			$	(367	)			$	(229	)			$	(704	)
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Loss from continuing operations, net of tax			$	(52	)			$	(56	)			$	(366	)			$	(230	)			(704		)
Income (loss) from discontinued operations, net of tax			(1		)			1					(1		)			1					—
Net loss attributable to Tenet Healthcare Corporation common shareholders			$	(53	)			$	(55	)			$	(367	)			$	(229	)			$	(704	)
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations			$	(0.52	)			$	(0.56	)			$	(3.63	)			$	(2.28	)			$	(7.00	)
Discontinued operations			(0.01		)			0.01					(0.01		)			0.01					—
			$	(0.53	)			$	(0.55	)			$	(3.64	)			$	(2.27	)			$	(7.00	)
Diluted
Continuing operations			$	(0.52	)			$	(0.56	)			$	(3.63	)			$	(2.28	)			$	(7.00	)
Discontinued operations			(0.01		)			0.01					(0.01		)			0.01					—
			$	(0.53	)			$	(0.55	)			$	(3.64	)			$	(2.27	)			$	(7.00	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic			100,000					100,612					100,812					100,945					100,592
Diluted			100,000					100,612					100,812					100,945					100,592

TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) (Unaudited)
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit 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 revenues(3)			$	3,643				$	3,443				$	3,434				$	3,561				$	14,081
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient revenue(3) per adjusted patient admission			$	11,354				$	11,249				$	11,215				$	11,557				$	11,344
Net patient 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 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		%
Self-pay			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 and provision for doubtful accounts.

TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING TOTAL HOSPITALS(1) (Unaudited)
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)			Three Months Ended																				Year Ended
			3/31/2017					6/30/2017					9/30/2017					12/31/2017					12/31/2017
Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)			76					76					73					72					72
Total admissions			196,907					190,394					185,389					186,185					758,875
Adjusted patient admissions			347,150					342,439					332,035					332,642					1,354,266
Paying admissions (excludes charity and uninsured)			186,648					179,889					174,803					176,158					717,498
Charity and uninsured admissions			10,259					10,505					10,586					10,027					41,377
Admissions through emergency department			126,473					121,807					120,493					123,887					492,660
Paying admissions as a percentage of total admissions			94.8		%			94.5		%			94.3		%			94.6		%			94.5		%
Charity and uninsured admissions as a percentage of total admissions			5.2		%			5.5		%			5.7		%			5.4		%			5.5		%
Emergency department admissions as a percentage of total admissions			64.2		%			64.0		%			65.0		%			66.5		%			64.9		%
Surgeries — inpatient			51,800					52,083					50,939					50,292					205,114
Surgeries — outpatient			69,604					71,366					67,321					68,604					276,895
Total surgeries			121,404					123,449					118,260					118,896					482,009
Patient days — total			923,339					874,930					853,059					857,728					3,509,056
Adjusted patient days			1,603,698					1,552,302					1,502,831					1,505,130					6,163,961
Average length of stay (days)			4.69					4.60					4.60					4.61					4.62
Licensed beds (at end of period)			20,439					20,435					19,433					19,141					19,141
Average licensed beds			20,440					20,435					19,783					19,320					19,995
Utilization of licensed beds			50.2		%			47.0		%			46.9		%			48.3		%			48.1		%
Outpatient Visits
Total visits			2,039,942					1,981,848					1,867,471					1,901,864					7,791,125
Paying visits (excludes charity and uninsured)			1,908,212					1,849,697					1,741,815					1,777,790					7,277,514
Charity and uninsured visits			131,730					132,151					125,656					124,074					513,611
Emergency department visits			733,051					724,785					685,096					711,268					2,854,200
Paying visits as a percentage of total visits			93.5		%			93.3		%			93.3		%			93.5		%			93.4		%
Charity and uninsured visits as a percentage of total visits			6.5		%			6.7		%			6.7		%			6.5		%			6.6		%
Total emergency department admissions and visits			859,524					846,592					805,589					835,155					3,346,860
Revenues
Net patient revenues(3)			$	3,728				$	3,719				$	3,522				$	3,860				$	14,829
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient revenue(3) per adjusted patient admission			$	10,739				$	10,860				$	10,607				$	11,604				$	10,950
Net patient revenue(3) per adjusted patient day			$	2,325				$	2,396				$	2,344				$	2,565				$	2,406
Total selected operating expenses (salaries, wages and benefits, supplies and other operating expenses) per adjusted patient admission(2)			$	10,288				$	10,394				$	10,367				$	10,492				$	10,384
Net Patient Revenues (3) from:
Medicare			23.1		%			22.0		%			22.0		%			20.4		%			21.9		%
Medicaid			7.4		%			7.5		%			7.1		%			12.9		%			8.8		%
Managed care			65.2		%			65.9		%			66.1		%			61.5		%			64.6		%
Self-pay			0.3		%			0.5		%			0.3		%			1.3		%			0.6		%
Indemnity and other			4.0		%			4.1		%			4.5		%			3.9		%			4.1		%

(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 and provision for doubtful accounts.

TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) (Unaudited)
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit 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)			68					68					68					68					68
Total admissions			178,189					168,135					168,202					170,407					684,933
Adjusted patient admissions			312,297					305,541					306,199					308,113					1,232,150
Paying admissions (excludes charity and uninsured)			168,554					157,904					157,197					160,173					643,828
Charity and uninsured admissions			9,635					10,231					11,005					10,234					41,105
Admissions through emergency department			122,922					114,945					116,727					120,012					474,606
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			69.0		%			68.4		%			69.4		%			70.4		%			69.3		%
Surgeries — inpatient			45,940					46,057					45,626					45,897					183,520
Surgeries — outpatient			61,049					63,615					61,468					62,638					248,770
Total surgeries			106,989					109,672					107,094					108,535					432,290
Patient days — total			840,786					765,659					761,921					779,728					3,148,094
Adjusted patient days			1,448,356					1,372,048					1,365,664					1,383,372					5,569,440
Average length of stay (days)			4.72					4.55					4.53					4.58					4.60
Licensed beds (at end of period)			17,946					17,946					17,934					17,937					17,937
Average licensed beds			17,946					17,946					17,934					17,935					17,940
Utilization of licensed beds			52.1		%			46.9		%			46.2		%			47.3		%			48.1		%
Outpatient Visits
Total visits			1,793,901					1,748,312					1,722,292					1,734,523					6,999,028
Paying visits (excludes charity and uninsured)			1,680,249					1,631,963					1,607,180					1,617,974					6,537,366
Charity and uninsured visits			113,652					116,349					115,112					116,549					461,662
Emergency department visits			682,603					642,623					638,248					649,544					2,613,018
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			805,525					757,568					754,975					769,556					3,087,624
Revenues
Net patient revenues(2)			$	3,570				$	3,432				$	3,432				$	3,561				$	13,995
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient revenue(2) per adjusted patient admission			$	11,431				$	11,233				$	11,208				$	11,557				$	11,358
Net patient revenue(2) per adjusted patient day			$	2,465				$	2,501				$	2,513				$	2,574				$	2,513
Net Patient Revenues (2) from:
Medicare			21.3		%			20.4		%			19.8		%			20.1		%			20.4		%
Medicaid			8.8		%			9.1		%			9.8		%			9.1		%			9.2		%
Managed care			64.9		%			66.1		%			64.9		%			65.9		%			65.4		%
Self-pay			1.3		%			0.1		%			0.9		%			0.5		%			0.7		%
Indemnity and other			3.7		%			4.3		%			4.6		%			4.4		%			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 68 hospitals operated throughout the twelve months ended December 31, 2018 and 2017, and associated outpatient facilities but excludes the results of hospitals that Tenet began operating, as well as hospitals Tenet divested, since January 1, 2017.
(2)		Less implicit price concessions and provision for doubtful accounts.

TENET HEALTHCARE CORPORATION SELECTED STATISTICS – CONTINUING SAME HOSPITALS(1) (Unaudited)
(Dollars in millions except per patient day, per admission, per adjusted admission and per visit amounts)			Three Months Ended																				Year Ended
			3/31/2017					6/30/2017					9/30/2017					12/31/2017					12/31/2017
Admissions, Patient Days and Surgeries
Number of hospitals (at end of period)			68					68					68					68					68
Total admissions			177,624					172,048					171,766					175,152					696,590
Adjusted patient admissions			310,137					306,278					305,300					310,485					1,232,200
Paying admissions (excludes charity and uninsured)			168,523					162,630					161,743					165,400					658,296
Charity and uninsured admissions			9,101					9,418					10,023					9,752					38,294
Admissions through emergency department			114,767					110,486					112,210					116,901					454,364
Paying admissions as a percentage of total admissions			94.9		%			94.5		%			94.2		%			94.4		%			94.5		%
Charity and uninsured admissions as a percentage of total admissions			5.1		%			5.5		%			5.8		%			5.6		%			5.5		%
Emergency department admissions as a percentage of total admissions			64.6		%			64.2		%			65.3		%			66.7		%			65.2		%
Surgeries - inpatient			46,900					47,288					47,315					47,350					188,853
Surgeries - outpatient			62,112					63,642					61,562					63,410					250,726
Total surgeries			109,012					110,930					108,877					110,760					439,579
Patient days - total			833,761					792,160					789,040					805,567					3,220,528
Adjusted patient days			1,433,858					1,390,154					1,379,096					1,402,038					5,605,146
Average length of stay (days)			4.69					4.60					4.59					4.60					4.62
Licensed beds (at end of period)			17,964					17,980					18,006					17,946					17,946
Average licensed beds			17,964					17,980					18,007					17,970					17,980
Utilization of licensed beds			51.6		%			48.4		%			47.6		%			48.7		%			49.1		%
Outpatient Visits
Total visits			1,810,801					1,766,625					1,715,650					1,771,336					7,064,412
Paying visits (excludes charity and uninsured)			1,698,917					1,652,532					1,600,195					1,653,582					6,605,226
Charity and uninsured visits			111,884					114,093					115,455					117,754					459,186
Emergency department visits			650,777					645,803					627,415					659,617					2,583,612
Paying visits as a percentage of total visits			93.8		%			93.5		%			93.3		%			93.4		%			93.5		%
Charity and uninsured visits as a percentage of total visits			6.2		%			6.5		%			6.7		%			6.6		%			6.5		%
Total emergency department admissions and visits			765,544					756,289					739,625					776,518					3,037,976
Revenues
Net patient revenues(2)			$	3,343				$	3,325				$	3,237				$	3,609				$	13,514
Revenues on a Per Adjusted Patient Admission and Per Adjusted Patient Day
Net patient revenue(2) per adjusted patient admission			$	10,780				$	10,856				$	10,603				$	11,624				$	10,967
Net patient revenue(2) per adjusted patient day			$	2,331				$	2,392				$	2,347				$	2,574				$	2,411
Net Patient Revenues (2) from:
Medicare			23.5		%			22.3		%			21.9		%			20.3		%			21.9		%
Medicaid			7.0		%			7.1		%			6.8		%			13.2		%			8.7		%
Managed care			65.0		%			65.8		%			66.1		%			61.0		%			64.4		%
Self-pay			0.3		%			0.6		%			0.3		%			1.5		%			0.7		%
Indemnity and other			4.2		%			4.2		%			4.9		%			4.0		%			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 68 hospitals operated throughout the twelve months ended December 31, 2018 and 2017, and associated outpatient facilities but excludes the results of hospitals that Tenet began operating, as well as hospitals Tenet divested, since January 1, 2017.
(2)		Less implicit price concessions and provision for doubtful accounts.

TENET HEALTHCARE CORPORATION SEGMENT REPORTING (Unaudited)
(Dollars in millions)													December 31,					December 31,
													2018					2017
Assets
Hospital Operations and other													$	15,684				$	16,466
Ambulatory Care													5,711					5,822
Conifer													1,014					1,097
Total													$	22,409				$	23,385
			Three Months Ended										Years Ended
			December 31,										December 31,
			2018					2017					2018					2017
Capital expenditures:
Hospital Operations and other			$	184				$	184				$	527				$	625
Ambulatory Care			22					23					68					60
Conifer			7					8					22					22
Total			$	213				$	215				$	617				$	707
Net operating revenues:
Hospital Operations and other total prior to inter-segment eliminations(1)			$	3,843				$	4,194				$	15,285				$	16,260
Ambulatory Care			554					545					2,085					1,940
Conifer
Tenet			150					155					590					618
Other clients			222					239					943					979
Total Conifer revenues			372					394					1,533					1,597
Inter-segment eliminations			(150		)			(155		)			(590		)			(618		)
Total			$	4,619				$	4,978				$	18,313				$	19,179
Equity in earnings of unconsolidated affiliates:
Hospital Operations and other			$	4				$	—				$	10				$	4
Ambulatory Care			49					49					140					140
Total			$	53				$	49				$	150				$	144
Adjusted EBITDA:
Hospital Operations and other(2)			$	352				$	538				$	1,411				$	1,462
Ambulatory Care			245					223					792					699
Conifer			87					79					357					283
Total			$	684				$	840				$	2,560				$	2,444
Depreciation and amortization:
Hospital Operations and other			$	171				$	176				$	685				$	736
Ambulatory Care			17					18					68					84
Conifer			12					14					49					50
Total			$	200				$	208				$	802				$	870

(1)		Hospital Operations and other revenues includes health plan revenues of less than one million and $14 million for the three and twelve months ended December 31, 2018, respectively and $10 million and $110 million for the three and twelve months ended December 31, 2017, respectively.
(2)		Hospital Operations and other Adjusted EBITDA excludes health plan EBITDA of less than one million and $9 million for the three and twelve months ended December 31, 2018, respectively and less than one million and $(41) million for the three and twelve months ended December 31, 2017, respectively.

TENET HEALTHCARE CORPORATION STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited)
(Dollars in millions)			Three Months Ended December 31,
			2018										2017
			Ambulatory Care as Reported Under GAAP					Unconsolidated Affiliates					Ambulatory Care as Reported Under GAAP					Unconsolidated Affiliates
Net operating revenues:
Net operating revenues before provision for doubtful accounts													$	556				$	625
Less: Provision for doubtful accounts													(11		)			(10		)
Net operating revenues (1)			$	554				$	691				545					615
Equity in earnings of unconsolidated affiliates (2)			49					—					49					—
Operating expenses:
Salaries, wages and benefits			160					158					165					131
Supplies			114					178					113					157
Other operating expenses, net			84					129					93					104
Depreciation and amortization			17					19					18					16
Impairment and restructuring charges, and acquisition-related costs			8					1					4					—
Net gains on sales, consolidation and deconsolidation of facilities			(7		)			—					(2		)			—
Operating income			227					206					203					207
Interest expense			(32		)			(6		)			(36		)			(5		)
Other non-operating income (expense), net			3					—					1					(1		)
Income from continuing operations, before income taxes			198					200					168					201
Income tax benefit (expense)			(18		)			(3		)			73					(3		)
Net income			180					$	197				241					$	198
Less: Net income available to noncontrolling interests(3)			99										111
Net income available to Tenet Healthcare Corporation common shareholders			$	81									$	130
Equity in earnings of unconsolidated affiliates								$	49									$	49

(1)		On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 3.8% during the three months ended December 31, 2018, with cases increasing 0.9% and revenue per case increasing 2.8%.
(2)		At December 31, 2018, 110 of the 337 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 227 facilities and account for these investments as consolidated subsidiaries
(3)		During the three months ended December 31, 2017, the Company recorded $22 million of noncontrolling interests expense on a tax benefit of $109 million, as a result of the reduction in the corporate income tax rate from 35% to 21%.

TENET HEALTHCARE CORPORATION STATEMENT OF OPERATIONS – AMBULATORY CARE SEGMENT (Unaudited)
(Dollars in millions)			Years Ended December 31,
			2018										2017
			Ambulatory Care as Reported Under GAAP					Unconsolidated Affiliates					Ambulatory Care as Reported Under GAAP					Unconsolidated Affiliates
Net operating revenues:
Net operating revenues before provision for doubtful accounts													$	1,978				$	2,117
Less: Provision for doubtful accounts													(38		)			(41		)
Net operating revenues (1)			$	2,085				$	2,277				1,940					2,076
Equity in earnings of unconsolidated affiliates (2)			140					—					140					—
Operating expenses:
Salaries, wages and benefits			644					549					623					483
Supplies			430					595					398					540
Other operating expenses, net			359					462					360					394
Depreciation and amortization			68					70					84					65
Impairment and restructuring charges, and acquisition-related costs			28					1					74					1
Net gains on sales, consolidation and deconsolidation of facilities			(8		)			—					(9		)			—
Operating income			704					600					550					593
Interest expense			(138		)			(23		)			(145		)			(22		)
Other non-operating income (expense), net			9					1					6					(1		)
Income from continuing operations, before income taxes			575					578					411					570
Income tax benefit (expense)			(65		)			(9		)			15					(9		)
Net Income			510					$	569				426					$	561
Less: Net income available to noncontrolling interests(3)			308										304
Net income available to Tenet Healthcare Corporation common shareholders			$	202									$	122
Equity in earnings of unconsolidated affiliates								$	140									$	140

(1)		On a same-facility system-wide basis, net revenue in Tenet’s Ambulatory Care segment increased 5.1% during the twelve months ended December 31, 2018, with cases increasing 3.4% and revenue per case increasing 1.6%.
(2)		At December 31, 2018, 110 of the 337 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 227 facilities and account for these investments as consolidated subsidiaries.
(3)		During the twelve months ended December 31, 2017, the Company recorded $22 million of noncontrolling interests expense on a tax benefit of $109 million, as a result of the reduction in the corporate income tax rate from 35% to 21%.

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) 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 2017 and 2018. 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 attributable to Tenet Healthcare Corporation common shareholders is set forth in Table #2 below for each quarter in 2017 and 2018. A reconciliation of net cash provided by (used in) 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 2017 and 2018.

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					YTD
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 #1 – Reconciliation of Net Income Available (Loss Attributable) to Tenet Healthcare Corporation Common Shareholders to Adjusted EBITDA for 2017 (Unaudited)
(Dollars in millions)			2017
			1st Qtr					2nd Qtr					3rd Qtr					4th Qtr					Total
Net loss attributable to Tenet Healthcare Corporation common shareholders			$	(53	)			$	(55	)			$	(367	)			$	(229	)			$	(704	)
Less: Net income available to noncontrolling interests			(89		)			(87		)			(78		)			(130		)			(384		)
Income (loss) from discontinued operations, net of tax			(1		)			1					(1		)			1					—
Income (loss) from continuing operations			37					31					(288		)			(100		)			(320		)
Income tax benefit (expense)			33					12					60					(324		)			(219		)
Loss from early extinguishment of debt			—					(26		)			(138		)			—					(164		)
Other non-operating expense, net			(5		)			(5		)			(4		)			(8		)			(22		)
Interest expense			(258		)			(260		)			(257		)			(253		)			(1,028		)
Operating income			267					310					51					485					1,113
Litigation and investigation costs			(5		)			(1		)			(6		)			(11		)			(23		)
Net gains on sales, consolidation and deconsolidation of facilities			15					23					104					2					144
Impairment and restructuring charges, and acquisition-related costs			(33		)			(41		)			(329		)			(138		)			(541		)
Depreciation and amortization			(221		)			(222		)			(219		)			(208		)			(870		)
Loss from divested and closed businesses			(16		)			(19		)			(6		)			—					(41		)
Adjusted EBITDA			$	527				$	570				$	507				$	840				$	2,444
Net operating revenues			$	4,813				$	4,802				$	4,586				$	4,978				$	19,179
Less: Net operating revenues from health plans			65					25					10					10					110
Adjusted net operating revenues			$	4,748				$	4,777				$	4,576				$	4,968				$	19,069
Net loss attributable to Tenet Healthcare Corporation common shareholders as a % of net operating revenues			(1.1		)%			(1.1		)%			(8.0		)%			(4.6		)%			(3.7		)%
Adjusted EBITDA as a % of adjusted net operating revenues (Adjusted EBITDA margin)			11.1		%			11.9		%			11.1		%			16.9		%			12.8		%

TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #2 – Reconciliation 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					YTD
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 #2 – Reconciliation of Net Loss Attributable to Tenet Healthcare Corporation Common Shareholders to Adjusted Net Income Available (Loss Attributable) from Continuing Operations to Common Shareholders for 2017 (Unaudited)
(Dollars in millions except per share amounts)			2017
			1st Qtr					2nd Qtr					3rd Qtr					4th Qtr					Total
Net loss attributable to Tenet Healthcare Corporation common shareholders			$	(53	)			$	(55	)			$	(367	)			$	(229	)			$	(704	)
Net income (loss) from discontinued operations			(1		)			$	1				(1		)			1					—
Net loss from continuing operations			(52		)			(56		)			(366		)			(230		)			(704		)
Less: Impairment and restructuring charges, and acquisition-related costs			(33		)			(41		)			(329		)			(138		)			(541		)
Litigation and investigation costs			(5		)			(1		)			(6		)			(11		)			(23		)
Net gains on sales, consolidation and deconsolidation of facilities			15					23					104					2					144
Loss from early extinguishment of debt			—					(26		)			(138		)			—					(164		)
Loss from divested and closed businesses			(16		)			(19		)			(6		)			—					(41		)
Tax impact of above items			14					25					26					49					114
Tax reform adjustment			—					—					—					(252		)			(252		)
Noncontrolling interests impact of above items			—					—					—					(23		)			(23		)
Adjusted net income available (loss attributable) from continuing operations to common shareholders			$	(27	)			$	(17	)			$	(17	)			$	143				$	82
Diluted loss per share from continuing operation			$	(0.52	)			$	(0.56	)			$	(3.63	)			$	(2.28	)			$	(7.00	)
Less: Impairment and restructuring charges, and acquisition-related costs			(0.33		)			(0.41		)			(3.26		)			(1.35		)			(5.34		)
Litigation and investigation costs			(0.05		)			(0.01		)			(0.06		)			(0.11		)			(0.23		)
Net gains on sales, consolidation and deconsolidation of facilities			0.15					0.23					1.03					0.02					1.42
Loss from early extinguishment of debt			—					(0.26		)			(1.37		)			—					(1.62		)
Loss from divested and closed businesses			(0.16		)			(0.19		)			(0.06		)			—					(0.40		)
Tax impact of above items			0.14					0.25					0.26					0.48					1.12
Tax reform adjustment			—					—					—					(2.47		)			(2.49		)
Noncontrolling interests impact of above items			—					—					—					(0.23		)			(0.23		)
Adjusted diluted earnings (loss) per share from continuing operations			$	(0.27	)			$	(0.17	)			$	(0.17	)			$	1.40				$	0.81
Weighted average basic shares outstanding (in thousands)			100,000					100,612					100,812					100,945					100,592
Weighted average dilutive shares outstanding (in thousands)			100,848					101,294					101,523					101,853					101,380

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)			2018
			1st Qtr					2nd Qtr					3rd Qtr					4th Qtr					YTD
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
(Dollars in millions)			2017
			1st Qtr					2nd Qtr					3rd Qtr					4th Qtr					Total
Net cash provided by operating activities			$	186				$	215				$	308				$	491				$	1,200
Purchases of property and equipment				(198	)				(150	)				(144	)				(215	)				(707	)
Free cash flow			$	(12	)			$	65				$	164				$	276				$	493
Net cash provided by (used in) investing activities			$	(189	)			$	(119	)			$	535				$	(206	)			$	21
Net cash used in financing activities			$	(141	)			$	(193	)			$	(889	)			$	(103	)			$	(1,326	)
Net cash provided by operating activities			$	186				$	215				$	308				$	491				$	1,200
Less: Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements				(24	)				(38	)				(26	)				(37	)				(125	)
Net cash provided by (used in) operating activities from discontinued operations				2					(4	)				(1	)				(2	)				(5	)
Adjusted net cash provided by operating activities from continuing operations				208					257					335					530					1,330
Purchases of property and equipment				(198	)				(150	)				(144	)				(215	)				(707	)
Adjusted free cash flow – continuing operations			$	10				$	107				$	191				$	315				$	623

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)			Q1 2019										2019
			Low					High					Low					High
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders			$	(75	)			$	(25	)			$	10				$	115
Less: Net income available to noncontrolling interests			(80		)			(90		)			(425		)			(445		)
Net income (loss) from discontinued operations, net of tax			(5		)			—					(5		)			—
Income tax expense			(5		)			(20		)			(165		)			(185		)
Interest expense			(260		)			(250		)			(995		)			(985		)
Loss from early extinguishment of debt(1)			(50		)			(50		)			(50		)			(50		)
Other non-operating expense, net			(5		)			(5		)			(10		)			(15		)
Net gains on sales, consolidation and deconsolidation of facilities(2)			—					—					—					—
Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements(1)			(40		)			(30		)			(175		)			(125		)
Depreciation and amortization			(200		)			(205		)			(805		)			(825		)
Income (loss) from divested and closed businesses			(5		)			—					(10		)			(5		)
Adjusted EBITDA			$	575				$	625				$	2,650				$	2,750
Income (loss) from continuing operations			$	(70	)			$	(25	)			$	15				$	115
Net operating revenues			$	4,300				$	4,600				$	18,000				$	18,400
Income (loss) from continuing operations as a % of operating revenues			(1.6		)%			(0.5		)%			0.1		%			0.6		%
Adjusted EBITDA as a % of net operating revenues (Adjusted EBITDA margin)			13.4		%			13.6		%			14.7		%			14.9		%

(1)		The Company has provided an estimate of losses from the early extinguishment of debt and restructuring charges and related payments that it anticipates in 2019. 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.
(2)		The Company does not generally forecast 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.

TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP disclosures Table #5 – Reconciliation 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)			Q1 2019										2019
			Low					High					Low					High
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders			$	(75	)			$	(25	)			$	10				$	115
Net income (loss) from discontinued operations, net of tax			(5		)			—					(5		)			—
Net income (loss) from continuing operations			(70		)			(25		)			15					115
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements			(40		)			(30		)			(175		)			(125		)
Net gains on sales, consolidation and deconsolidation of facilities			—					—					—					—
Loss from early extinguishment of debt			(50		)			(50		)			(50		)			(50		)
Income (loss) from divested and closed businesses			(5		)			—					(10		)			(5		)
Tax impact of above items			15					10					30					20
Adjusted net income available from continuing operations to common shareholders			$	10				$	45				$	220				$	275
Diluted earnings (loss) per share from continuing operations			$	(0.68	)			$	(0.24	)			$	0.14				$	1.08
Less: Impairment and restructuring charges, acquisition-related costs, and litigation costs and settlements			(0.38		)			(0.29		)			(1.65		)			(1.18		)
Net gains on sales, consolidation and deconsolidation of facilities			—					—					—					—
Loss from early extinguishment of debt			(0.48		)			(0.48		)			(0.47		)			(0.47		)
Income (loss) from divested and closed businesses			(0.05		)			—					(0.09		)			(0.05		)
Tax impact of above items			0.14					0.10					0.27					0.19
Adjusted diluted earnings per share from continuing operations			$	0.10				$	0.43				$	2.08				$	2.59
Weighted average basic shares outstanding (in thousands)			103,000					103,000					104,000					104,000
Weighted average dilutive shares outstanding (in thousands)			104,000					104,000					106,000					106,000

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								$	1,070				$	1,375
Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(1)								(175		)			(125		)
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, and (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.