Tenet Healthcare Corp 8-K, filed Feb 1, 2024
Tenet Healthcare Corp (THC)
8-K
2024-02-01
For: 2024-02-01
View Original
Added on
July 04, 2026
About this 8-K
Tenet Healthcare Corp filed this 8-K on February 1, 2024.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
_______________
Date of Report: February 1, 2024
(Date of earliest event reported)
_______________
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||||||||||||
(Address of principal executive offices, including zip code)
(469 ) 893-2200
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. | Results of Operations and Financial Condition. | ||||
On February 1, 2024, Tenet Healthcare Corporation (the “Company”), announced that, although the Company’s financial statement close process is not yet fully completed, the Company currently estimates that its Adjusted EBITDA for the year ended December 31, 2023, will be above the high end of its current Adjusted EBITDA guidance range after normalizing for the recognition of $52 million aggregate pre-tax income in the fourth quarter associated with Medicaid supplemental revenue program adjustments in California and Texas.
The Company’s actual results for the year ended December 31, 2023 may differ from such preliminary estimates and additional developments and adjustments may arise between now and the time the financial information for this period is finalized. The Company currently expects to report complete results for the year ended December 31, 2023 on February 8, 2024.
The Company has not finalized all the data to be able to reconcile certain forward-looking non-GAAP financial measures to the most comparable U.S. GAAP financial measures without unreasonable efforts due to uncertainty in predicting certain items.
Reconciliations of non-GAAP measures, such as Adjusted EBITDA, to the most comparable GAAP measures and management’s reasoning for using them are included in the Company’s earnings press release dated October 30, 2023, which is available on the investor relations section of the Company’s website at www.tenethealth.com/investors. Investors are encouraged to read these detailed financial disclosures and reconciliations.
The information contained in this Item 2.02 is being furnished pursuant to Item 2.02 of Form 8-K. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or incorporated by reference in any filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01. | Regulation FD Disclosure. | ||||
On February 1, 2024, the Company issued a press release announcing the anticipated sale of four hospitals located in California (Fountain Valley Regional Hospital and Medical Center, Lakewood Regional Medical Center, Los Alamitos Medical Center and Placentia Linda Hospital) and certain related operations (the “Divested Facilities”) for (1) $975 million in cash (after-tax proceeds of approximately $800 million) and (ii) the retention of net working capital related to the pre-closing operations of the Divested Facilities estimated to be approximately $130 million (the “Transaction”). A copy of the press release is attached to this report as Exhibit 99.1 and incorporated herein by reference.
For the year ended December 31, 2023, the four hospitals and related operations included in the sale generated revenues of approximately $1 billion, pre-tax income of approximately $29 million and Adjusted EBITDA of approximately $71 million, excluding interest expense of approximately $3 million, and depreciation and amortization expense of approximately $39 million. The Company estimates recording a pre-tax book gain of approximately $500 million as a result of this anticipated transaction. In addition, the Company estimates that as a result of the pre-tax book gain, the Company's income tax expense would be favorably impacted in 2024 by approximately $40 million due to a reduction in interest expense limitations.
The information contained in this Item 7.01 and Exhibit 99.1 is being furnished pursuant to Item 7.01 of Form 8-K. This information shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 8.01. | Other Events. | ||||
On February 1, 2024, the Company and certain of its subsidiaries announced entering into a definitive agreement (the “Asset Sale Agreement”) for the sale of four hospitals located in California (Fountain Valley Regional Hospital and Medical Center, Lakewood Regional Medical Center, Los Alamitos Medical Center and Placentia Linda Hospital) and certain related operations to UCI Health (“Purchaser”). Subject to the terms and conditions in the Asset Sale Agreement, the Company has agreed to sell these assets for (1) $975 million in cash (subject to customary purchase price adjustments) and (ii) the retention of net working capital related to the pre-closing operations of the Divested Facilities. The Transaction is not subject to a financing contingency.
The Asset Sale Agreement includes customary representations, warranties, covenants and termination provisions for each of the parties, as well as certain indemnities. The completion of the Transaction is subject to closing conditions, including but not limited to certain regulatory or governmental filings and approvals having been made or obtained, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. This transaction is anticipated to close in the spring of 2024.
Cautionary Statement
This report contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address the Company’s 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 the Company’s actual results to be materially different than those expressed in the Company’s 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, 2022 and other filings with the Securities and Exchange Commission.
Item 9.01. | Financial Statements and Exhibits. | ||||
(d) Exhibits
Exhibit No. | Description | ||||||||||
| 99.1 | |||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL) | ||||||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TENET HEALTHCARE CORPORATION | ||||||||
Date: | By: | /s/ THOMAS ARNST | ||||||
| Name: Thomas Arnst | ||||||||
| Title: Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary | ||||||||
Exhibit 99.1
Tenet Advances Portfolio Transformation and Previews Strong 2023 Results
Tenet completes sale of three South Carolina hospitals and announces the sale of four Orange County and Los Angeles County hospitals and related operations.
DALLAS -- February 1, 2024 --Tenet Healthcare Corporation (NYSE: THC) today announced that it has completed the sale of three of its hospitals and related operations in South Carolina to Novant Health for approximately $2.4 billion. Tenet also announced it has entered into a definitive agreement with UCI Health for the sale of four Tenet hospitals and related operations in Orange County and Los Angeles County, California for approximately $975 million in cash. In addition, Tenet announced that it expects to exceed the high end of its latest FY23 Adjusted EBITDA Outlook range included in its third quarter 2023 earnings release.
Tenet completed the sale of its three South Carolina hospitals and related operations to Novant for approximately $2.4 billion in cash (after-tax proceeds of approximately $1.750 billion). The completed South Carolina transaction includes Coastal Carolina Hospital, Hilton Head Hospital, East Cooper Medical Center, affiliated physician practices, and other related hospital operations. Tenet’s Conifer Health Solutions subsidiary has entered an expanded fifteen-year contract to provide comprehensive revenue cycle management services for these operations.
Additionally, Tenet has entered into a definitive agreement with UCI Health for the sale of four Tenet hospitals and related operations in Orange County and Los Angeles County. The agreement – which follows the approval of the University of California Board of Regents – is for approximately $975 million (after-tax proceeds of approximately $800 million). The transaction will include Fountain Valley Regional Hospital, Lakewood Regional Medical Center, Los Alamitos Medical, Placentia-Linda Hospital, and other related operations. Tenet will retain net working capital related to pre-closing operations and Conifer Health Solutions will continue to provide revenue cycle management services through the transition.
“Our four hospitals have provided high-quality care for Orange County and Los Angeles County residents for over 50 years,” said Saum Sutaria, M.D., Chairman and CEO, Tenet Healthcare. “UCI Health is an innovative academic health system with a deep commitment to enabling accessibility to world-class, academic medicine closer to home. Integrating these hospitals into their system will meaningfully enhance access to the benefits of university medicine.”
For the year ended December 31, 2023, the four hospitals and related operations included in the sale generated revenues of approximately $1 billion, pre-tax income of approximately $29 million and Adjusted EBITDA of approximately $71 million, excluding interest expense of approximately $3 million, and depreciation and amortization expense of approximately
$39 million. The Company estimates recording a pre-tax book gain of approximately $500 million as a result of this anticipated transaction.
The transaction is expected to be completed in the spring of 2024, subject to customary regulatory approvals, clearances, and closing conditions.
In addition, Tenet estimates that as a result of the pre-tax book gains from these two transactions, the Company’s income tax expense would be favorably impacted in 2024 by approximately $190 million due to a reduction in interest expense limitations. Collectively, these transactions will also support Tenet’s objective of reducing leverage.
Although Tenet’s financial statement close process is not yet fully completed, the Company currently estimates that its Adjusted EBITDA for the year ended December 31, 2023, will be above the high end of its current Adjusted EBITDA guidance range after normalizing for the recognition of $52 million aggregate pre-tax income in the fourth quarter associated with Medicaid supplemental revenue program adjustments in California and Texas. The results were driven, among other things, by strong surgical growth at United Surgical Partners International (USPI).
“Our team continues to deliver consistently strong results, driven by Tenet’s data-driven and disciplined operating model,” said Sutaria. “We look forward to providing more details on our performance when we announce our complete fourth quarter and full year results on February 8, 2024.”
The Company’s actual results for the year ended December 31, 2023 may differ from such preliminary estimates and additional developments and adjustments may arise between now and the time the financial information for this period is finalized. Accordingly, you should not place undue reliance on these estimates.
About Tenet Healthcare
Tenet Healthcare Corporation (NYSE: THC) is a diversified healthcare services company headquartered in Dallas. Our care delivery network includes United Surgical Partners International, the largest ambulatory platform in the country, which operates or has ownership interests in more than 480 ambulatory surgery centers and surgical hospitals. We also operate 58 acute care and specialty hospitals, approximately 160 other outpatient facilities, a network of leading employed physicians and a global business center in Manila, Philippines. Our Conifer Health Solutions subsidiary provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers, and other clients. Across the Tenet enterprise, we are united by our mission to deliver quality, compassionate care in the communities we serve. For more information, please visit www.tenethealth.com.
Non-GAAP Financial Measures
The Company has not finalized all the data to be able to reconcile certain forward-looking non-GAAP financial measures to the most comparable U.S. GAAP financial measures without unreasonable efforts due to uncertainty in predicting certain items. Reconciliations of non-GAAP measures, such as Adjusted EBITDA, to the most comparable GAAP measures and management’s reasoning for using them are included in the Company’s earnings press release dated October 30, 2023, which is available on the investor relations section of the Company’s website at www.tenethealth.com/investors. Investors are encouraged to read these detailed financial disclosures and reconciliations.
Cautionary Statement
This release contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address the Company’s 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 the Company’s actual results to be materially different than those expressed in the Company’s 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, 2022 and other filings with the Securities and Exchange Commission.
Investor Contact
Will McDowell
469-893-2387
William.McDowell@tenethealth.com
Will McDowell
469-893-2387
William.McDowell@tenethealth.com
Media Contact
Robert Dyer
469-893-2640
mediarelations@tenethealth.com
Robert Dyer
469-893-2640
mediarelations@tenethealth.com