\n| \n ($ in millions, except per share results)<\/i><\/p>\n<\/td>\n | \n 1Q21<\/b><\/p>\n<\/td>\n | \n 1Q20<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet income from continuing operations available to Tenet common shareholders\n<\/p>\n<\/td>\n | \n $97<\/b><\/p>\n<\/td>\n | \n \n$94\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet income from continuing operations available to Tenet common shareholders per diluted share\n<\/p>\n<\/td>\n | \n $0.90<\/b><\/p>\n<\/td>\n | \n \n$0.89\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA excluding grant income\n<\/p>\n<\/td>\n | \n $740<\/b><\/p>\n<\/td>\n | \n \n$585\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $777<\/b><\/p>\n<\/td>\n | \n \n$585\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted diluted earnings per share from continuing operations\n<\/p>\n<\/td>\n | \n $1.30<\/b><\/p>\n<\/td>\n | \n \n$1.28\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n The table above as well as tables and discussions throughout this earnings release include certain financial measures that are not in accordance with accounting principles generally accepted in the United States of America (GAAP). Reconciliations of GAAP measures to the Adjusted (non-GAAP) measures used are detailed in Tables #1-3 included at the end of this earnings release. Management\u2019s reasoning for the use of these non-GAAP measures and descriptions of the various non-GAAP measures are included in the Non-GAAP Financial Measures section of this earnings release.<\/i><\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nRonald A. Rittenmeyer, Executive Chairman and Chief Executive Officer, stated, \u201cThe results in Q1 were driven by our continued strong business fundamentals throughout the company. We delivered Adjusted EBITDA well above the midpoint of our Outlook, even excluding the grant income we received related to the CARES Act. Substantially all of our hospital markets outperformed their EBITDA budgets and we delivered solid results at USPI, both amidst ongoing pandemic challenges and the severe weather impact of Winter Storm Uri. Conifer continued to generate strong margins while focusing on client wins and the continued build-out of new service offerings. And, consistent with our approach, we maintained discipline with our balance sheet, ending the quarter with a significant improvement in free cash flow generation.\u201d\n<\/p>\n \nRittenmeyer continued, \u201cIn line with our stated plans, we continued to make important moves as part of our transformation. We remain focused on building the best emergent and elective, specialty-based platform in the country through our hospitals and USPI. As part of this, USPI will have a singular focus on surgical care with the divestiture of our urgent care centers and the transition of imaging assets to our hospital portfolio. We also further aligned our business and social purposes by elevating our commitment to ESG initiatives, including those in the areas of sustainability, diversity and inclusion and community service. Altogether, we believe our financial performance, coupled with operational enhancements and accountability to our strategic goals, have created a pathway for continued improved financial performance for the balance of 2021.\u201d\n<\/p>\n COVID-19 Pandemic (COVID)<\/span><\/i><\/p>\n\nAs previously disclosed, the Company has been experiencing operational and financial challenges associated with COVID. As Tenet continues to manage COVID and its impact on operations, the Company remains committed to the highest standards of safety, with protocols focused on the protection of its patients and employees, including the distribution of COVID vaccines to its caregivers and the public at large. Operational teams monitor real-time data to ensure sufficient staffing, intensive care unit bed capacity and personal protective equipment (PPE). Outpatient facilities are also safely performing elective procedures, and the Company’s hospitals and ambulatory platform continue to follow all state and local guidelines concerning elective care.\n<\/p>\n \nThe Company’s dedicated focus on strategic cost reduction measures and corporate efficiencies continue to partially mitigate the impact of COVID, including the impact of lost revenues and higher costs related to the pandemic.\n<\/p>\n Results from Continuing Operations Available to Tenet Common Shareholders<\/span><\/i><\/p>\n\nNet income from continuing operations available to the Company’s common shareholders in 1Q21 was $97 million, or $0.90 per diluted share, versus net income from continuing operations of $94 million, or $0.89 per diluted share, in 1Q20. 1Q21 included a COVID-related stimulus grant income benefit of $37 million pre-tax ($28 million after-tax, or $0.26 per diluted share). 1Q20 included a favorable income tax benefit of $91 million ($0.86 per diluted share) related to an increase in the deductibility of interest expense for income tax purposes as a result of the Coronavirus Aid, Relief and Economic Security (CARES) Act.\n<\/p>\n Adjusted Results from Continuing Operations Available to Tenet Common Shareholders<\/span><\/i><\/p>\nReconciliations of net income available to Tenet common shareholders to Adjusted net income from continuing operations available to Tenet’s common shareholders are contained in Table #1 at the end of this release.<\/i><\/p>\n \nTenet\u2019s 1Q21 Adjusted net income from continuing operations available to its common shareholders was $140 million, or $1.30 per diluted share, compared to $135 million, or $1.28 per diluted share, in 1Q20.\n<\/p>\n Adjusted EBITDA<\/span><\/i><\/p>\nReconciliations of net income available to Tenet common shareholders to Adjusted EBITDA are contained in Table #2 at the end of this release.<\/i><\/p>\n \nAdjusted EBITDA in 1Q21 was $740 million excluding $37 million of grant income in 1Q21, or $777 million including grant income, compared to $585 million in 1Q20.\n<\/p>\n Early Retirement of Debt and New Multi-Year Agreement with UnitedHealthcare<\/span><\/i><\/p>\n\n- \nIn March 2021, the Company early retired $478 million of 7% senior unsecured notes using available cash on hand, which will reduce annual cash interest payments by approximately $33 million.\n<\/li>\n<\/ul>\n
\n- \nIn April 2021, the Company signed a new multi-year contract with UnitedHealthcare four months prior to its scheduled renewal date. The contract will provide many UnitedHealthcare members with continued in-network access to the Company\u2019s hospitals, physician clinics and outpatient centers, including USPI\u2019s surgical facilities.\n<\/li>\n<\/ul>\n
Hospital Operations and Other (Hospital) Segment Results<\/span><\/b><\/p>\nTenet\u2019s Hospital business segment is comprised of acute care and specialty hospitals, ancillary outpatient facilities, micro-hospitals, imaging centers, physician practices and freestanding urgent care centers (most of these urgent care centers are expected to be sold by the end of April 2021). As of April 1, 2021, the Company’s imaging centers that were previously operated under USPI have been realigned under the Hospital segment.<\/i><\/p>\n\n\n| \n Hospital segment results <\/i><\/b>($ in millions)<\/i><\/p>\n<\/td>\n | \n 1Q21<\/b><\/p>\n<\/td>\n | \n 1Q20<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Revenues<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet operating revenues\n<\/p>\n<\/td>\n | \n $3,947<\/b><\/p>\n<\/td>\n | \n \n$3,834\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGrant income\n<\/p>\n<\/td>\n | \n $24<\/b><\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nFacilities net patient service revenues; same-hospital basis (a)\n<\/p>\n<\/td>\n | \n $3,647<\/b><\/p>\n<\/td>\n | \n \n$3,542\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Volume Changes<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-hospital admissions versus the prior-year period (a)\n<\/p>\n<\/td>\n | \n (10.9)%<\/b><\/p>\n<\/td>\n | \n \n(4.5)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-hospital admissions versus the comparable period in 2019 (a)\n<\/p>\n<\/td>\n | \n (14.9)%<\/b><\/p>\n<\/td>\n | \n \n(4.5)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-hospital adjusted admissions versus the prior-year period (a)(b)\n<\/p>\n<\/td>\n | \n (13.7)%<\/b><\/p>\n<\/td>\n | \n \n(4.9)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-hospital adjusted admissions versus the comparable period in 2019 (a)(b)\n<\/p>\n<\/td>\n | \n (17.9)%<\/b><\/p>\n<\/td>\n | \n \n(4.9)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Adjusted EBITDA<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA excluding grant income\n<\/p>\n<\/td>\n | \n $410<\/b><\/p>\n<\/td>\n | \n \n$342\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $434<\/b><\/p>\n<\/td>\n | \n \n$342\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\n| \n (a)<\/i><\/p>\n<\/td>\n | \n Same-hospital revenues and statistical data<\/i> include those for the 65 hospitals operated by the Company\u2019s Hospital segment continuously from January 1, 2020 through March 31, 2021 as well as revenues associated with hospital-affiliated outpatient centers. Net patient service revenues from physician practices are excluded.\n<\/p>\n<\/td>\n<\/tr>\n\n| \n (b)<\/i><\/p>\n<\/td>\n | \n Adjusted admissions <\/i>represent actual patient admissions adjusted to include outpatient services provided by facilities in our Hospital segment by multiplying actual patient admissions by the sum of gross inpatient revenues and outpatient revenues, then dividing that result by gross inpatient revenues.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Revenues and Volumes<\/span><\/i><\/p>\n\n- \nNet operating revenues (which exclude grant income) in the Hospital segment were $3.947 billion in 1Q21, growth of 2.9 percent from $3.834 billion in 1Q20. The increase in revenues was primarily due to higher patient acuity and commercial payer mix, which more than offset lower patient volumes as a result of COVID. The higher patient acuity resulted from the combination of reduced lower-acuity cases driven by the pandemic and the Company’s on-going strategic focus on higher-acuity services.\n<\/li>\n
- \nNet patient service revenues were $3.647 billion in 1Q21, growth of 3.0 percent from $3.542 billion in 1Q20.\n<\/li>\n
- \nThe table below summarizes same-hospital volumes in the periods noted as a percent of the comparable periods in 2019 on a same business-day basis:\n<\/li>\n<\/ul>\n
\n\n| \n Hospital Segment Volume Statistics<\/b><\/p>\n<\/td>\n | \n 1Q20<\/b><\/p>\n<\/td>\n | \n 2Q20<\/b><\/p>\n<\/td>\n | \n 3Q20<\/b><\/p>\n<\/td>\n | \n 4Q20<\/b><\/p>\n<\/td>\n | \n 1Q21<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nAdmissions\n<\/p>\n<\/td>\n | \n \n~94%\n<\/p>\n<\/td>\n | \n \n~80%\n<\/p>\n<\/td>\n | \n \n~89%\n<\/p>\n<\/td>\n | \n \n~89%\n<\/p>\n<\/td>\n | \n ~85%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nOutpatient visits (including outpatient ER visits)\n<\/p>\n<\/td>\n | \n \n~95%\n<\/p>\n<\/td>\n | \n \n~58%\n<\/p>\n<\/td>\n | \n \n~84%\n<\/p>\n<\/td>\n | \n \n~85%\n<\/p>\n<\/td>\n | \n ~83%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nEmergency Room visits (inpatient and outpatient)\n<\/p>\n<\/td>\n | \n \n~97%\n<\/p>\n<\/td>\n | \n \n~64%\n<\/p>\n<\/td>\n | \n \n~77%\n<\/p>\n<\/td>\n | \n \n~76%\n<\/p>\n<\/td>\n | \n ~73%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nHospital surgeries\n<\/p>\n<\/td>\n | \n \n~92%\n<\/p>\n<\/td>\n | \n \n~70%\n<\/p>\n<\/td>\n | \n \n~89%\n<\/p>\n<\/td>\n | \n \n~90%\n<\/p>\n<\/td>\n | \n ~88%<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n\n- \nNet patient service revenue per adjusted admission increased 19.3 percent year-over-year for 1Q21 primarily reflecting the factors impacting the year-over-year increase in net operating revenues.\n<\/li>\n<\/ul>\n
Operating Expenses<\/span><\/i><\/p>\n\nTotal selected operating expenses in the segment in 1Q21 increased only 1.8 percent, or $61 million, as continuing cost efficiency initiatives, as well as necessary cost reductions due to the decline in patient volumes associated with the pandemic, substantially offset incremental pandemic-related costs, including temporary staffing and premium pay as well as higher supply costs for PPE. Selected operating expenses include salaries, wages and benefits, supplies and other operating expenses.\n<\/p>\n Adjusted EBITDA<\/span><\/i><\/p>\n\nAdjusted EBITDA in the segment was $410 million in 1Q21 excluding $24 million of grant income, up 19.9 percent compared to $342 million in 1Q20. Including the grant income, Adjusted EBITDA was $434 million in 1Q21. The Adjusted EBITDA margin was 10.4 percent in 1Q21 (excluding the grant income) compared to 8.9 percent in 1Q20.\n<\/p>\n Ambulatory Care (Ambulatory) Segment Results<\/span><\/b><\/p>\nTenet\u2019s Ambulatory business segment is comprised of the operations of United Surgical Partners International (USPI). As of March 31, 2021, USPI had interests in 312 ambulatory surgery centers and 24 surgical hospitals in 30 states. Results for 1Q21 also included USPI’s 24 imaging centers (realigned under the Hospital segment as of April 1, 2021) and 39 urgent care centers (all of these urgent care centers are expected to be sold by the end of April 2021). The Company owns 95 percent of USPI.<\/i><\/p>\n\n\n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| \n Ambulatory segment results<\/i><\/b> ($ in millions)<\/i><\/p>\n<\/td>\n | \n 1Q21<\/b><\/p>\n<\/td>\n | \n 1Q20<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Revenues<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet operating revenues\n<\/p>\n<\/td>\n | \n $646<\/b><\/p>\n<\/td>\n | \n \n$490\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGrant income excluding equity earnings impact\n<\/p>\n<\/td>\n | \n $7<\/b><\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGrant income in equity earnings\n<\/p>\n<\/td>\n | \n $6<\/b><\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-facility system-wide net patient service revenues (c)\n<\/p>\n<\/td>\n | \n $1,245<\/b><\/p>\n<\/td>\n | \n \n$1,167\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Volume Changes<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-facility system-wide surgical cases versus the prior-year period (c)(d)\n<\/p>\n<\/td>\n | \n 1.9 %<\/b><\/p>\n<\/td>\n | \n \n(8.5)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-facility system-wide surgical cases versus the comparable period in 2019 (c)(d)\n<\/p>\n<\/td>\n | \n (6.5)%<\/b><\/p>\n<\/td>\n | \n \n(8.5)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Adjusted EBITDA and NCI<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA excluding grant income\n<\/p>\n<\/td>\n | \n $244<\/b><\/p>\n<\/td>\n | \n \n$156\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $257<\/b><\/p>\n<\/td>\n | \n \n$156\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA less facility-level NCI excluding grant income\n<\/p>\n<\/td>\n | \n $160<\/b><\/p>\n<\/td>\n | \n \n$100\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA less facility-level NCI\n<\/p>\n<\/td>\n | \n $169<\/b><\/p>\n<\/td>\n | \n \n$100\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA less total NCI excluding grant income\n<\/p>\n<\/td>\n | \n $156<\/b><\/p>\n<\/td>\n | \n \n$99\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA less total NCI\n<\/p>\n<\/td>\n | \n $165<\/b><\/p>\n<\/td>\n | \n \n$99\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\n| \n (c)<\/i><\/p>\n<\/td>\n | \n Same-facility system-wide revenues and statistical information <\/i>include the results of the facilities in which the Ambulatory segment<\/i> has an investment that are not consolidated by Tenet (of the 399 facilities at March 31, 2021, the results of 108 were accounted for under the equity method for unconsolidated affiliates). To help analyze the segment\u2019s results of operations, management uses system-wide measures, which include revenues and cases of both consolidated and unconsolidated facilities. Prior-period amounts for acquired facilities are included in analyses of same-facility system-wide growth rates.\n<\/p>\n<\/td>\n<\/tr>\n\n| \n (d)<\/i><\/p>\n<\/td>\n | \n Includes<\/i> volumes for SurgCenter Development (SCD) facilities acquired in December 2020.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Revenues and Volumes<\/span><\/i><\/p>\n\n- \nThe Ambulatory segment produced net operating revenues of $646 million in 1Q21, an increase of 31.8 percent compared to $490 million in 1Q20 reflecting higher patient acuity and new service line growth as well as the impact of revenues associated with the SCD portfolio acquisition completed in December 2020.\n<\/li>\n
- \nIn the surgical business, which represents the majority of segment net operating revenues, same-facility system-wide revenues increased 6.7 percent in 1Q21 compared to 1Q20, with cases up 1.9 percent and revenue per case up 4.8 percent.\n<\/li>\n
- \nOn a same-facility system-wide basis, total segment net operating revenues increased 6.7 percent in 1Q21 compared to 1Q20, with total cases increasing 2.6 percent and revenue per case increasing 4.0 percent.\n<\/li>\n
- \nThe table below summarizes same-facility system-wide surgical cases in the periods noted as a percent of the comparable periods in 2019 on a same business-day basis:\n<\/li>\n<\/ul>\n
\n\n| \n Ambulatory Segment Volume Statistics<\/b><\/p>\n<\/td>\n | \n 1Q20<\/b><\/p>\n<\/td>\n | \n 2Q20<\/b><\/p>\n<\/td>\n | \n 3Q20<\/b><\/p>\n<\/td>\n | \n 4Q20<\/b><\/p>\n<\/td>\n | \n 1Q21<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nSurgical cases\n<\/p>\n<\/td>\n | \n \n~90%\n<\/p>\n<\/td>\n | \n \n~58%\n<\/p>\n<\/td>\n | \n \n~94%\n<\/p>\n<\/td>\n | \n \n~95%\n<\/p>\n<\/td>\n | \n ~94%<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n Adjusted EBITDA<\/span><\/i><\/p>\n\nSegment Adjusted EBITDA of $244 million in 1Q21, excluding $13 million of grant income, increased 56.4 percent compared to $156 million in 1Q20. Including the grant income, Adjusted EBITDA was $257 million in 1Q21, up 64.7 percent from the prior year’s quarter. Adjusted EBITDA less facility-level noncontrolling interest (NCI) was $169 million, up 69.0 percent from $100 million in 1Q20, or 60.0 percent higher excluding grant income.\n<\/p>\n Conifer Segment Results<\/span><\/b><\/p>\nTenet\u2019s Conifer business segment provides comprehensive end-to-end and focused-point business process services, including hospital and physician revenue cycle management, patient communications and engagement support and value-based care solutions to hospitals, healthcare systems, physician practices, employers and other clients.<\/i><\/p>\n The Company continues to work on spinning off its Conifer segment. This transaction is expected to both enhance shareholder value and reduce the level of Tenet’s debt through a tax-free debt-for-debt exchange.<\/i><\/p>\n\n\n| \n Conifer segment results ($ in millions)<\/i><\/b><\/p>\n<\/td>\n | \n 1Q21<\/b><\/p>\n<\/td>\n | \n 1Q20<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet operating revenues\n<\/p>\n<\/td>\n | \n $310<\/b><\/p>\n<\/td>\n | \n \n$332\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $86<\/b><\/p>\n<\/td>\n | \n \n$87\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Revenues<\/span><\/i><\/p>\n\nDuring 1Q21, Conifer segment revenues declined 6.6 percent to $310 million, from $332 million in 1Q20, due in part to revised terms associated with its contract with Tenet hospitals and expected client attrition partially offset by new business signings and expansions.\n<\/p>\n Adjusted EBITDA<\/span><\/i><\/p>\n\nConifer generated $86 million of Adjusted EBITDA in 1Q21, down 1.1 percent compared to $87 million in 1Q20. Conifer’s Adjusted EBITDA margin increased to 27.7 percent in 1Q21 compared to 26.2 percent in 1Q20 primarily due to continuing expense discipline.\n<\/p>\n Balance Sheet, Cash Flows and Liquidity<\/span><\/b><\/p>\nBalance Sheet Highlights<\/span><\/i><\/p>\n\n\n| \n ($ in millions)<\/i><\/p>\n<\/td>\n | \n March 31,
\n
2021<\/b><\/p>\n<\/td>\n | \n December 31,
\n
2020<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nCash and cash equivalents\n<\/p>\n<\/td>\n | \n $2,141<\/b><\/p>\n<\/td>\n | \n \n$2,446\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAccounts receivable days outstanding\n<\/p>\n<\/td>\n | \n 55.8<\/b><\/p>\n<\/td>\n | \n \n55.6\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nLine-of-credit borrowings outstanding\n<\/p>\n<\/td>\n | \n \u2014<\/b><\/p>\n<\/td>\n | \n \n\u2014\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nRatio of net debt plus Medicare advances liability to Adjusted EBITDA (e)\n<\/p>\n<\/td>\n | \n 4.37<\/b><\/p>\n<\/td>\n | \n \n4.70\n<\/p>\n<\/td>\n<\/tr>\n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| \n (e) Net debt is total debt less cash and cash equivalents<\/i><\/p>\n<\/td>\n | | \n | <\/tr>\n<\/table>\n\n- \nCash and cash equivalents at March 31, 2021 were $305 million lower than December 31, 2020 reflecting the Company’s previously announced early retirement of debt resulting in a $33 million reduction in future cash interest payments.\n<\/li>\n
- \nThe Company received approximately $1.5 billion of Medicare advance payments from the Centers for Medicare and Medicaid Services (CMS) in 2020. Repayment terms for the Medicare advance payments begin 12 months from the provider’s receipt of the advance payments. An interest rate of 4.0 percent will be assessed on any outstanding balances 29 months from the initial advance. The Company began repaying the advance payments in April 2021 and expects to fully repay the advances before interest starts to accrue in September 2022.\n<\/li>\n
- \nThe Company had no outstanding borrowings on its $1.9 billion line of credit as of March 31, 2021. In April 2021, the Company renewed an additional one-year commitment to continue to increase the borrowing capacity from $1.5 billion to $1.9 billion.\n<\/li>\n
- \nThe Company’s ratio of net debt plus the Medicare advances liability to Adjusted EBITDA was 4.37x at March 31, 2021 compared to 4.70x at December 31, 2020.\n<\/li>\n<\/ul>\n
Cash flows and liquidity<\/span><\/i><\/p>\nReconciliations of net cash provided by operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.<\/i><\/p>\n\n\n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| \n ($ in millions) <\/i><\/p>\n<\/td>\n | \n 1Q21<\/b><\/p>\n<\/td>\n | \n 1Q20<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet cash provided by operating activities\n<\/p>\n<\/td>\n | \n $534<\/b><\/p>\n<\/td>\n | \n \n$129\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nCapital expenditures\n<\/p>\n<\/td>\n | \n $(121)<\/b><\/p>\n<\/td>\n | \n \n$(182)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nFree cash flow\n<\/p>\n<\/td>\n | \n $413<\/b><\/p>\n<\/td>\n | \n \n$(53)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted free cash flow\n<\/p>\n<\/td>\n | \n $464<\/b><\/p>\n<\/td>\n | \n \n$15\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet cash used in investing activities\n<\/p>\n<\/td>\n | \n $(145)<\/b><\/p>\n<\/td>\n | \n \n$(204)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet cash provided by (used in) financing activities\n<\/p>\n<\/td>\n | \n $(694)<\/b><\/p>\n<\/td>\n | \n \n$426\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n- \nThe Company produced positive free cash flow of $413 million in 1Q21 versus $(53) million in 1Q20.\n<\/li>\n
- \nCash and cash equivalents decreased $305 million during 1Q21 to $2.141 billion at March 31, 2021 compared to $2.446 billion at December 31, 2020 primarily due to the Company’s early retirement of $478 million of debt described above.\n<\/li>\n<\/ul>\n
Company Outlook<\/span><\/b><\/p>\n\n- Reconciliations of Outlook net income available to Tenet common shareholders to Outlook Adjusted EBITDA for the year ending December 31, 2021 (FY 2021) and the quarter ending June 30, 2021 (2Q21) are contained in Table #4 at the end of this release.<\/i><\/li>\n
- Reconciliations of Outlook net income available to Tenet common shareholders to Outlook Adjusted net income from continuing operations to common shareholders for FY 2021 and 2Q21 are contained in Table #5 at the end of this release. <\/i><\/li>\n
- Reconciliations of Outlook net cash provided by operating activities to Outlook free cash flow and Outlook Adjusted free cash flow from continuing operations for FY 2021 are contained in Table #6 at the end of this release.<\/i><\/li>\n<\/ul>\n
\nTenet\u2019s Outlook for FY 2021 and 2Q21 on a consolidated basis and by segment follows:\n<\/p>\n \n\n| \n CONSOLIDATED <\/i><\/b>($ in millions except per share amounts) <\/i><\/p>\n<\/td>\n | \n FY 2021 Outlook<\/b><\/p>\n<\/td>\n | \n 2Q21 Outlook<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet operating revenues\n<\/p>\n<\/td>\n | \n $19,400 to $19,800<\/b><\/p>\n<\/td>\n | \n \n$4,650 to $4,850\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet income from continuing operations available to Tenet common stockholders\n<\/p>\n<\/td>\n | \n $322 to $507<\/b><\/p>\n<\/td>\n | \n \n$65 to $145\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $3,000 to $3,200<\/b><\/p>\n<\/td>\n | \n \n$675 to $775\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA margin\n<\/p>\n<\/td>\n | \n 15.5% to 16.2%<\/b><\/p>\n<\/td>\n | \n \n14.5% to 16.0%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDiluted income per common share from continuing operations\n<\/p>\n<\/td>\n | \n $2.98 to $4.69<\/b><\/p>\n<\/td>\n | \n \n$0.60 to $1.34\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted net income from continuing operations\n<\/p>\n<\/td>\n | \n $445 to $590<\/b><\/p>\n<\/td>\n | \n \n$75 to $150\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted diluted earnings per share from continuing operations\n<\/p>\n<\/td>\n | \n $4.12 to $5.46<\/b><\/p>\n<\/td>\n | \n \n$0.69 to $1.39\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nEquity in earnings of unconsolidated affiliates\n<\/p>\n<\/td>\n | \n $200 to $220<\/b><\/p>\n<\/td>\n | \n \n$40 to $50\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDepreciation and amortization\n<\/p>\n<\/td>\n | \n $870 to $890<\/b><\/p>\n<\/td>\n | \n \n$215 to $225\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nInterest expense\n<\/p>\n<\/td>\n | \n $935 to $945<\/b><\/p>\n<\/td>\n | \n \n$230 to $240\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet income available to NCI\n<\/p>\n<\/td>\n | \n $545 to $565<\/b><\/p>\n<\/td>\n | \n \n$120 to $130\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nWeighted average diluted common shares\n<\/p>\n<\/td>\n | \n ~108 million<\/b><\/p>\n<\/td>\n | \n \n~108 million\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNCI cash distributions\n<\/p>\n<\/td>\n | \n $460 to $480<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nEffective tax rate (f)\n<\/p>\n<\/td>\n | \n ~17%<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet cash provided by operating activities\n<\/p>\n<\/td>\n | \n $1,125 to $1,425<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted net cash provided by operating activities\n<\/p>\n<\/td>\n | \n $1,275 to $1,525<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nCapital expenditures\n<\/p>\n<\/td>\n | \n $700 to $750<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted free cash flow\n<\/p>\n<\/td>\n | \n $575 to $775<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\n| \n (f)<\/i><\/p>\n<\/td>\n | \n The effective tax rate is calculated as income tax expense divided by the adjusted pretax income. Income tax expense is calculated by multiplying 24% (the federal corporate tax rate of 21% plus an estimate of state taxes) by the sum of: adjusted pretax income less GAAP NCI expense plus permanent differences, non-deductible interest expense and non-cash NCI expense related to the portion of USPI the Company does not own.<\/i><\/p>\n<\/td>\n<\/tr>\n<\/table>\n\n\n| \n Hospital Segment <\/i><\/b>($ in millions) <\/i><\/p>\n<\/td>\n | \n FY 2021 Outlook<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet operating revenues\n<\/p>\n<\/td>\n | \n $15,925 to $16,175<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $1,465 to $1,595<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNCI\n<\/p>\n<\/td>\n | \n ~$25<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nChanges in:\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nInpatient admissions (g)\n<\/p>\n<\/td>\n | \n 90% to 95% of 2019 actual<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nOutpatient visits (g)\n<\/p>\n<\/td>\n | \n 85% to 90% of 2019 actual<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nAdjusted admissions (g)\n<\/p>\n<\/td>\n | \n 85% to 90% of 2019 actual<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |