Tenet Health(THC) - 2024 Q2 - Quarterly Report

Financial Performance - Consolidated net operating revenues increased by $21 million, or 0.4%, in the three months ended June 30, 2024 compared to the same period in 2023[252]. - Total revenues for the company were$ 5.103 billion in the three months ended June 30, 2024, a slight increase of 0.4% from $5.082 billion in the same period of 2023[280]. - Net income available to common shareholders for diluted earnings per share was$ 2.64 for the three months ended June 30, 2024, compared to $1.15 for the same period in 2023[301]. - Income before income taxes for the three months ended June 30, 2024, was$ 587 million, up from $373 million in the same period of 2023, indicating a 57% increase[387]. - Adjusted EBITDA for the six months ended June 30, 2024, was$ 1.969 billion, compared to $1.675 billion for the same period in 2023, reflecting a 17.6% increase[391]. Admissions and Patient Services - Total admissions decreased by 8,128, or 6.1%, in the three months ended June 30, 2024 compared to the same period in 2023[251]. - Total admissions decreased by 6.1% to 124,626 in the three months ended June 30, 2024, compared to 132,754 in the same period of 2023[278]. - The average length of stay decreased to 5.00 days in the three months ended June 30, 2024, from 5.10 days in the same period of 2023[278]. - The company experienced a 20.0% increase in total consolidated cases in the Ambulatory Care segment, driven by acquired ASCs and same-facility case growth[279]. Revenue Segments - The decrease of$ 178 million, or 4.3%, in the Hospital Operations segment's net operating revenues for the three-month period in 2024 was primarily due to the sales of divested hospitals[252]. - Net operating revenues in the Ambulatory Care segment increased by $199 million, or 21.1%, in the three months ended June 30, 2024, compared to the same period in 2023[282]. - Total net operating revenues for Hospital Operations were$ 3,962 million for the three months ended June 30, 2024, compared to $4,140 million for the same period in 2023[303]. - Total net patient service revenues from continuing operations for the Hospital Operations segment were$ 518 million for the three months ended June 30, 2024, compared to $599 million for the same period in 2023, reflecting a decrease of 13.5%[324]. Operating Expenses - Salaries, wages, and benefits per adjusted admission increased by 0.5% to$ 8,263 in the three months ended June 30, 2024[254]. - Supplies per adjusted admission increased by 4.0% to $2,670 in the same period[254]. - Other operating expenses per adjusted admission increased by 7.3% to$ 4,290 in the three months ended June 30, 2024[256]. - Operating expenses for Hospital Operations decreased by 5.5% to $3.472 billion in the three months ended June 30, 2024, compared to$ 3.676 billion in the same period of 2023[283]. - Same-hospital salaries, wages, and benefits expense increased by $36 million, or 2.0%, in the three months ended June 30, 2024, while as a percentage of net operating revenues, it decreased by 270 basis points to 47.0%[364]. - Same-hospital supplies expense increased by$ 36 million, or 6.3%, in the three months ended June 30, 2024, driven by higher patient volumes[366]. - Other operating expenses increased by $76 million, or 8.5%, in the three months ended June 30, 2024, with malpractice and medical fees contributing significantly to the rise[367]. Cash Flow and Investments - Net cash provided by operating activities was$ 1.333 billion in the six months ended June 30, 2024, compared to $1.047 billion in the same period in 2023[257]. - Cash and cash equivalents increased to$ 2.880 billion at June 30, 2024, up from $2.481 billion at March 31, 2024[286]. - The company recorded net cash provided by investing activities of$ 3.134 billion during the six months ended June 30, 2024, compared to net cash used of $467 million in the same period of 2023[398]. - The company had$ 2.880 billion of cash and cash equivalents on hand at June 30, 2024, to fund operations and capital expenditures[396]. Acquisitions and Growth - The company acquired controlling ownership interests in 49 ambulatory surgery centers (ASCs) during the six months ended June 30, 2024[243]. - The company opened six de novo ASCs with noncontrolling ownership interests during the same period[243]. - The company made facility acquisitions totaling $500 million during the six months ended June 30, 2024, compared to$ 96 million in the same period of 2023[380]. - The company plans to invest $250 million annually in ambulatory business acquisitions and de novo facilities as part of its portfolio diversification strategy[394]. Shareholder Returns - The board of directors authorized a share repurchase program of up to$ 1.5 billion with no expiration date in July 2024[238]. - The company repurchased $548 million worth of common stock, acquiring 4,801 thousand shares at an average price of$ 114.19 per share in the six months ended June 30, 2024[276]. Restructuring and Legal Matters - The company incurred restructuring charges in the six months ended June 30, 2024, with potential for additional charges in the future[272]. - Restructuring charges for the six months ended June 30, 2024 totaled $32 million, compared to$ 31 million for the same period in 2023, with legal costs related to business sales being a significant component[356]. - Litigation and investigation costs amounted to $9 million for the six months ended June 30, 2024, down from$ 14 million in the same period of 2023[357]. Tax and Regulatory Matters - The company expects a $4 million decrease in unrecognized federal and state tax benefits in the next 12 months due to audit settlements and amended tax returns[333]. - The company amended its letter of credit facility to extend the maturity date to March 16, 2027, and replaced LIBOR with Term SOFR as the reference interest rate[326].