8-K

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)

_______________

TENET HEALTHCARE CORPORATION

(Exact name of registrant as specified in its charter)

Nevada	1-7293	95-2557091
(State of Incorporation)	(Commission File Number)	(IRS Employer<br>Identification Number)

14201 Dallas Parkway

Dallas, TX 75254

(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br>Symbol(s)	Name of each exchange <br>on which registered
Common stock, $0.05 par value	THC	NYSE
6.875% Senior Notes due 2031	THC31	NYSE

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 2.01.	Completion of Acquisition or Disposition of Assets.

On February 1, 2024, Tenet Healthcare Corporation (the “Company”) announced the completion of the previously announced sale of three of its South Carolina hospitals, affiliated physician practices, and other related operations, (the "Divested Assets"). Affiliates of Novant Health purchased the Divested Assets for a base purchase price of $2.400 billion in cash, which is subject to customary purchase price adjustments (the 'Transaction").

Unaudited pro forma financial information relating to the Transaction is filed in Item 9.01 of this Current Report on Form 8-K.

Item 7.01.	Regulation FD Disclosure.

The Transaction is estimated to result in a pretax gain of approximately $1.7 billion. 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 $150 million due to a reduction in interest expense limitations. Additional information regarding the Transaction is provided in the Current Report on Form 8-K filed by the Company on November 17, 2023.

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 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 9.01.	Financial Statements and Exhibits.

(b) Pro Forma Financial Information

The Company's unaudited pro forma condensed consolidated balance sheet as of September 30, 2023 and unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2022 and the nine months ended September 30, 2023 (collectively, the "Unaudited Pro Forma Financial Statements") are filed as Exhibit 99.1 hereto and are based on the Company's historical consolidated results of operations and financial position, adjusted to give effect to the Transaction. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2023 has been prepared to present the Company's financial conditions as if the Transaction had occurred on September 30, 2023. The unaudited pro forma condensed statements of operations for the year ended December 31, 2022 and the nine months ended September 30, 2023 have been prepared to present the Company's results of operations as if the Transaction had occurred on January 1, 2022.

The Unaudited Pro Forma Financial Statements and the accompanying notes should be read together with the Company's audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2022, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and its unaudited condensed consolidated financial statements and accompanying notes as of and for the nine months ended September 30, 2023, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2023.

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.

Exhibit No.	Description
99.1	Unaudited Pro Forma Financial Statements and accompanying notes
104	Cover Page Interactive Data File (embedded within the inline XBRL document)

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: February 1, 2024	By:	/s/ R. SCOTT RAMSEY
		R. Scott Ramsey
		Senior Vice President, Controller

Document

Exhibit 99.1

TENET HEALTHCARE CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial statements are based on the Company's historical consolidated results of operations and financial position, adjusted to give effect to the Transaction, as defined in Item 2.01 of this Form 8-K, as if it had been completed on September 30, 2023 with respect to the pro forma condensed consolidated balance sheet and as of January 1, 2022 with respect to the pro forma condensed consolidated statements of operations.

These unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and do not include all of the information and note disclosures required by generally accepted accounting principles of the United States.

The unaudited pro forma condensed consolidated financial information is subject to the assumptions and adjustments described in the accompanying notes. These assumptions and adjustments are based on information presently available. Actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial statements are based on the historical financial statements of the Company for each period presented and in the opinion of the Company's management, all adjustments and disclosures necessary for a fair presentation of the pro forma data have been made. These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the results of operations or financial condition that would have been achieved had events reflected been completed as of the dates indicated, and may not be useful in predicting the impact of the Transaction on the future financial condition and results of operations of the Company due to a variety of factors.

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TENET HEALTHCARE CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2023

(Dollars in millions)					Pro Forma
	Historical			Adjustments				Pro Forma
ASSETS
Current assets:
Cash and cash equivalents		$	1,054		$	2,395	(a)		$	3,449
Accounts receivable		2,897			(82)		(b)		2,815
Inventories of supplies, at cost		413			(11)		(b)		402
Income tax receivable		—			—				—
Assets held for sale		140			—				140
Other current assets		1,855			(23)		(b)		1,832
Total current assets		6,359			2,279				8,638
Investments and other assets		3,152			(26)		(b)		3,126
Deferred income taxes		4			—				4
Property and equipment, at cost, less accumulated depreciation and amortization		6,260			(199)		(b)		6,061
Goodwill		10,415			(425)		(b)		9,990
Other intangible assets, at cost, less accumulated amortization		1,400			(18)		(b)		1,382
Total assets		$	27,590		$	1,611			$	29,201
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt		$	141		$	(1)	(b)		$	140
Accounts payable		1,202			(18)		(b)		1,184
Accrued compensation and benefits		787			(6)		(b)		781
Professional and general liability reserves		264			—				264
Accrued interest payable		273			—				273
Liabilities held for sale		17			—				17
Contract liabilities		86			—				86
Other current liabilities		1,662			(25)		(b)
					640		(e)		2,277
Total current liabilities		4,432			590				5,022
Long-term debt, net of current portion		14,901			(1)		(b)		14,900
Professional and general liability reserves		787			—				787
Defined benefit plan obligations		327			—				327
Deferred income taxes		278			(53)		(e)		225
Other long-term liabilities		1,684			(24)		(b)		1,660
Total liabilities		22,409			512				22,921
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries		2,303			—				2,303
Equity:
Shareholders’ equity:
Common stock		8			—				8
Additional paid-in capital		4,818			—				4,818
Accumulated other comprehensive loss		(176)			—				(176)
Retained earnings (deficit)		(436)			1,099		(c)		663
Common stock in treasury, at cost		(2,750)			—				(2,750)
Total shareholders’ equity		1,464			1,099				2,563
Noncontrolling interests		1,414			—				1,414
Total equity		2,878			1,099				3,977
Total liabilities and equity		$	27,590		$	1,611			$	29,201

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TENET HEALTHCARE CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2022

			Pro Forma
(Dollars in millions, except per share amounts)	Historical		Adjustments			2022
Net operating revenues	$	19,174	$	(534)	(d)	$	18,640
Grant income	194		—			194
Equity in earnings of unconsolidated affiliates	216		—			216
Operating expenses:
Salaries, wages and benefits	8,844		(190)		(d)	8,654
Supplies	3,273		(83)		(d)	3,190
Other operating expenses, net	3,998		(113)		(d)	3,885
Depreciation and amortization	841		(19)		(d)	822
Impairment and restructuring charges, and acquisition-related costs	226		—			226
Litigation and investigation costs	70		(2)		(d)	68
Net gains on sales, consolidation and deconsolidation of facilities	(1)		(1,686)		(c)	(1,687)
Operating income	2,333		1,559			3,892
Interest expense	(890)		1		(d)	(889)
Other non-operating income (expense), net	10		—			10
Loss from early extinguishment of debt	(109)		—			(109)
Income from continuing operations, before income taxes	1,344		1,560			2,904
Income tax benefit (expense)	(344)		(551)		(e)	(895)
Income from continuing operations	1,000		1,009			2,009
Less: Net income available to noncontrolling interests	590		—			590
Net income from continuing operations available to Tenet Healthcare Corporation common shareholders	$	410	$	1,009		$	1,419
Earnings per share available to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	3.83				$	13.27
Diluted
Continuing operations	$	3.78				$	12.91
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	106,929					106,929
Diluted	110,516					110,516

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TENET HEALTHCARE CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

(Dollars in millions, except per share amounts)	Historical		Pro Forma Adjustments			Pro Forma
Net operating revenues	$	15,169	$	(412)	(d)	$	14,757
Grant income	14		—			14
Equity in earnings of unconsolidated affiliates	155		—			155
Operating expenses:						—
Salaries, wages and benefits	6,831		(145)		(d)	6,686
Supplies	2,659		(65)		(d)	2,594
Other operating expenses, net	3,319		(93)		(d)	3,226
Depreciation and amortization	654		(15)		(d)	639
Impairment and restructuring charges, and acquisition-related costs	84		(1)		(d)	83
Litigation and investigation costs	28		(2)		(d)	26
Net gains on sales, consolidation and deconsolidation of facilities	(12)		—			(12)
Operating income	1,775		(91)			1,684
Interest expense	(674)		1		(d)	(673)
Other non-operating income, net	8		—			8
Loss from early extinguishment of debt	(11)		—			(11)
Income from continuing operations, before income taxes	1,098		(90)			1,008
Income tax expense	(243)		26		(e)	(217)
Income from continuing operations	855		(64)			791
Less: Net income available to noncontrolling interests	488		—			488
Net income available to Tenet Healthcare Corporation common shareholders	$	367	$	(64)		$	303
Earnings per share available to Tenet Healthcare Corporation common shareholders:
Basic
Continuing operations	$	3.60				$	2.97
Diluted
Continuing operations	$	3.41				$	2.80
Weighted average shares and dilutive securities outstanding<br><br>(in thousands):
Basic	101,869					101,869
Diluted	105,021					105,021

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(a)    Adjustment to reflect cash consideration received from the Transaction of approximately $2,400 million net of $5 million in transaction costs.

(b)    Adjustment to eliminate the assets and liabilities attributable to the Divested Assets.

(c)    Adjustment reflects the gain on sale from the Transaction, calculated as follows:

Cash received	$	2,400
Transaction costs	(5)
Net book value of Divested Assets	(284)
Goodwill allocated to the sale	(425)
Pro forma gain before income taxes	1,686
Provision for income taxes	(587)
Pro forma net gain on sale	$	1,099

This adjustment is not expected to recur in income of the Company beyond 12 months from the Transaction.

(d)    Adjustment to eliminate the historical revenue and operating expenses of the Divested Assets including expenses of $1 million related to the Transaction recorded in the nine months ended September 30, 2023. Adjustments do not include general corporate overhead or other costs previously allocated to the facilities sold if they are expected to recur in income of the Company beyond 12 months from the Transaction.

(e)    Adjustment reflects the applicable income tax effects of $551 million from the Transaction. Approximately $587 million relates to the gain on sale and $36 million and $26 million relates to the eliminations set forth in Note (d) for the year ended December 31, 2022 and the nine months ended September 30, 2023, respectively. Current liabilities also reflects an adjustment for $640 million of taxes payable on the gain. These adjustments are not expected to recur in income of the Company beyond 12 months from the Transaction.

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