\n| \n ($ in millions, except per share results)<\/i><\/p>\n<\/td>\n | \n Q2\u201921<\/b><\/p>\n<\/td>\n | \n Q2\u201920<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201921<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201920<\/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 $120<\/b><\/p>\n<\/td>\n | \n \n$88\n<\/p>\n<\/td>\n | \n $217<\/b><\/p>\n<\/td>\n | \n \n$182\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 $1.11<\/b><\/p>\n<\/td>\n | \n \n$0.83\n<\/p>\n<\/td>\n | \n $2.00<\/b><\/p>\n<\/td>\n | \n \n$1.72\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA excluding grant income\n<\/p>\n<\/td>\n | \n $810<\/b><\/p>\n<\/td>\n | \n \n$209\n<\/p>\n<\/td>\n | \n $1,550<\/b><\/p>\n<\/td>\n | \n \n$794\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $834<\/b><\/p>\n<\/td>\n | \n \n$732\n<\/p>\n<\/td>\n | \n $1,611<\/b><\/p>\n<\/td>\n | \n \n$1,317\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted diluted earnings per share from continuing operations\n<\/p>\n<\/td>\n | \n $1.59<\/b><\/p>\n<\/td>\n | \n \n$1.26\n<\/p>\n<\/td>\n | \n $2.89<\/b><\/p>\n<\/td>\n | \n \n$2.54\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 \n\u201cOur second quarter results continue to reflect our long-term strategy and transformation progress, resulting in our ability to adapt and perform on a consistent and sustainable trajectory,\u201d said Ron Rittenmeyer, Executive Chairman and CEO. \u201cWe continued to focus our efforts on the expansion of healthcare access in alignment with community need, including investments in high-acuity service lines for patients with chronic conditions and the addition of lower cost ambulatory settings in key locations around the country. We also took steps to further evolve our portfolio and operating model by exiting our urgent care business and entering into an agreement to divest our Miami-area hospital operations, which we anticipate will be completed during the third quarter.\u201d\n<\/p>\n \nRittenmeyer continued, \u201cThe cornerstone of our strategy remains our commitment to our four pillars of compliance, quality, service and safety. These have created a strong foundation which we have used to execute the transformational strategy resulting in this continued performance trajectory. And, as with prior quarters, we remain vigilant with COVID-safety protocols and continue to add highly qualified, skilled physicians to our medical staffs, both in our hospitals and ambulatory facilities, as we work to more closely support service line needs in each community we serve. The state of the enterprise today reflects our continuous effort to foster top-quality environments for our patients and the communities we serve, as well as our dedicated professionals, whose continued commitment and hard work is carried out at every corner of the organization.\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. Tenet continues to manage COVID and its impact on operations. COVID cases have come down from peak levels in January 2021 with the roll-out of vaccinations.\n<\/p>\n \nTenet 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\u2019s hospitals and ambulatory platform continue to follow all state and local guidelines concerning elective care.\n<\/p>\n \nThe Company\u2019s 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\n- \nNet income from continuing operations available to the Company\u2019s common shareholders in Q2\u201921 was $120 million, or $1.11 per diluted share, versus net income from continuing operations of $88 million, or $0.83 per diluted share, in Q2\u201920. Q2\u201921 included COVID-related stimulus grant income of $24 million pre-tax ($18 million after-tax, or $0.17 per diluted share) versus $523 million of pre-tax grant income in Q2\u201920 ($380 million after-tax or $3.60 per diluted share).\n<\/li>\n
- \nFor YTD Q2\u201921, the income from continuing operations available to the Company\u2019s common shareholders was $217 million, or $2.00 per diluted share, compared to $182 million, or $1.72 per diluted share, for YTD Q2\u201920. YTD Q2\u201921 included COVID-related stimulus grant income of $61 million pre-tax ($46 million after-tax, or $0.43 per diluted share) compared to pre-tax grant income of $523 million in YTD Q2\u201920 ($380 million after-tax, or $3.60 per diluted share). YTD Q2\u201920 included a favorable income tax benefit of $88 million ($0.83 per diluted share), substantially all recorded in the first quarter of 2020, 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<\/li>\n<\/ul>\n
Adjusted Net Income 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\u2019s common shareholders are contained in Table #1 at the end of this release.<\/i><\/p>\n\n- \nTenet\u2019s Q2\u201921 Adjusted net income from continuing operations available to its common shareholders was $173 million, or $1.59 per diluted share, compared to $133 million, or $1.26 per diluted share, in Q2\u201920.\n<\/li>\n
- \nTenet\u2019s YTD Q2\u201921 Adjusted net income from continuing operations available to its common shareholders was $313 million, or $2.89 per diluted share, compared to $268 million, or $2.54 per diluted share, in YTD Q2\u201920.\n<\/li>\n<\/ul>\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\n- \nAdjusted EBITDA in Q2\u201921 was $834 million ($810 million excluding $24 million of grant income) compared to $732 million in Q2\u201920 ($209 million excluding $523 million of grant income).\n<\/li>\n
- \nFor YTD Q2\u201921, Adjusted EBITDA was $1.611 billion ($1.550 billion excluding $61 million of grant income) compared to $1.317 billion in YTD Q2\u201920 ($794 million excluding $523 million of grant income).\n<\/li>\n<\/ul>\n
Q2\u201921 Events<\/span><\/i><\/p>\n\n- \nOn June 16, 2021, the Company announced it had signed a definitive agreement to sell five hospitals and related hospital operations in the Miami-Dade and Southern Broward counties of Florida to Steward Health Care, LLC (Steward). The company\u2019s ambulatory facilities operated by United Surgical Partners International (USPI) in these counties will remain with Tenet. The Company\u2019s Conifer Health Solutions subsidiary will continue to provide revenue cycle management services to the five hospitals following completion of the transaction, which is anticipated to close in the third quarter of 2021.\n<\/li>\n
- \nOn May 18, 2021, the Company announced a private placement of $1.400 billion in aggregate principal amount of newly issued 4.250% senior secured first lien notes maturing in 2029. The Company used the net proceeds from the sale of the notes, after payment of fees and expenses, to finance, together with cash on hand, the redemption of all of its outstanding 5.125% $1.410 billion senior secured second lien notes due 2025, which will lower future annual cash interest payments by approximately $13 million.\n<\/li>\n
- \nOn April 30, 2021, the Company completed the previously announced sale of its urgent care platform to FastMed for $80 million. The transaction included the sale of 87 CareSpot and MedPost centers, which were previously managed by Tenet\u2019s USPI subsidiary.\n<\/li>\n<\/ul>\n
Hospital Operations and Other (Hospital) Segment Results<\/span><\/b><\/p>\nTenet\u2019s Hospital business segment is primarily comprised of acute care and specialty hospitals, ancillary outpatient facilities, micro-hospitals, imaging centers and physician practices. Effective April 1, 2021, the Company\u2019s imaging centers that were previously operated under USPI were realigned under the Hospital segment.<\/i><\/p>\n\n\n| \n Hospital segment results <\/i><\/b>($ in millions)<\/i><\/p>\n<\/td>\n | \n Q2\u201921<\/b><\/p>\n<\/td>\n | \n Q2\u201920<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201921<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201920<\/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 | \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 $4,095<\/b><\/p>\n<\/td>\n | \n \n$3,088\n<\/p>\n<\/td>\n | \n $8,042<\/b><\/p>\n<\/td>\n | \n \n$6,922\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGrant income\n<\/p>\n<\/td>\n | \n $4<\/b><\/p>\n<\/td>\n | \n \n$474\n<\/p>\n<\/td>\n | \n $28<\/b><\/p>\n<\/td>\n | \n \n$474\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-hospital net patient service revenues (a)\n<\/p>\n<\/td>\n | \n $3,749<\/b><\/p>\n<\/td>\n | \n \n$2,816\n<\/p>\n<\/td>\n | \n $7,381<\/b><\/p>\n<\/td>\n | \n \n$6,334\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Same-Hospital Volume Changes versus the Prior-Year Period (a)<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdmissions\n<\/p>\n<\/td>\n | \n 13.7%<\/b><\/p>\n<\/td>\n | \n \n(20.3)%\n<\/p>\n<\/td>\n | \n 0.1 %<\/b><\/p>\n<\/td>\n | \n \n(12.3)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted admissions (b)\n<\/p>\n<\/td>\n | \n 23.9%<\/b><\/p>\n<\/td>\n | \n \n(27.3)%\n<\/p>\n<\/td>\n | \n 2.6 %<\/b><\/p>\n<\/td>\n | \n \n(16.0)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nOutpatient visits (including outpatient ER visits)\n<\/p>\n<\/td>\n | \n 70.6%<\/b><\/p>\n<\/td>\n | \n \n(41.9)%\n<\/p>\n<\/td>\n | \n 19.1 %<\/b><\/p>\n<\/td>\n | \n \n(23.1)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nEmergency Room visits (inpatient and outpatient)\n<\/p>\n<\/td>\n | \n 35.0%<\/b><\/p>\n<\/td>\n | \n \n(35.9)%\n<\/p>\n<\/td>\n | \n (2.4)%<\/b><\/p>\n<\/td>\n | \n \n(18.6)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nHospital surgeries\n<\/p>\n<\/td>\n | \n 37.0%<\/b><\/p>\n<\/td>\n | \n \n(30.2)%\n<\/p>\n<\/td>\n | \n 13.0 %<\/b><\/p>\n<\/td>\n | \n \n(18.7)%\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 | \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 $445<\/b><\/p>\n<\/td>\n | \n \n$18\n<\/p>\n<\/td>\n | \n $855<\/b><\/p>\n<\/td>\n | \n \n$360\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $449<\/b><\/p>\n<\/td>\n | \n \n$492\n<\/p>\n<\/td>\n | \n $883<\/b><\/p>\n<\/td>\n | \n \n$834\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 hospitals and hospital-affiliated outpatient centers operated by the Company\u2019s Hospital segment continuously from January 1, 2020 through June 30, 2021. Amounts associated with physician practices are excluded. With the exception of the historical percentage changes presented for Q2\u201920 and YTD Q2\u201920, prior period revenues and statistics have been recast to reflect only the continuously operated facilities.\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 $4.095 billion in Q2\u201921, growth of 32.6 percent from $3.088 billion in Q2\u201920. The increase in revenues was primarily due to significantly higher volumes given the impact of the pandemic in Q2\u201920, as well as high patient acuity and pricing yield.\n<\/li>\n
- \nSame-hospital net patient service revenues were $3.749 billion in Q2\u201921, growth of 33.1 percent from $2.816 billion in Q2\u201920.\n<\/li>\n
- \nSame-hospital net patient service revenue per adjusted admission increased 7.4 percent year-over-year for Q2\u201921 primarily reflecting continued high patient acuity.\n<\/li>\n<\/ul>\n
Operating Expenses<\/span><\/i><\/p>\n\nTotal selected operating expenses in the segment in Q2\u201921 increased 19.6 percent, or $578 million, from Q2\u201920 as volume levels rebounded from the onset of the pandemic in the prior year. 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 $449 million in Q2\u201921 ($445 million excluding $4 million of grant income) compared to $492 million in Q2\u201920 ($18 million excluding $474 million of grant income). The Adjusted EBITDA margin excluding grant income was 10.9 percent in Q2\u201921 compared to 0.6 percent in Q2\u201920.\n<\/p>\n Ambulatory Care (Ambulatory) Segment Results<\/span><\/b><\/p>\nTenet\u2019s Ambulatory business segment is comprised of the operations of USPI. As of June 30, 2021, USPI had interests in 317 ambulatory surgery centers and 24 surgical hospitals in 31 states. Results for Q2\u201920, YTD Q2\u201920 and YTD Q2\u201921 included USPI\u2019s imaging centers (realigned under the Hospital segment as of April 1, 2021) and its urgent care centers (sold in April 2021). The Company owns 95 percent of USPI.<\/i><\/p>\n\n\n| \n Ambulatory segment results<\/i><\/b> ($ in millions)<\/i><\/p>\n<\/td>\n | \n Q2\u201921<\/b><\/p>\n<\/td>\n | \n Q2\u201920<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201921<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201920<\/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 | \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 $664<\/b><\/p>\n<\/td>\n | \n \n$368\n<\/p>\n<\/td>\n | \n $1,310<\/b><\/p>\n<\/td>\n | \n \n$858\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGrant income excluding equity earnings impact\n<\/p>\n<\/td>\n | \n $15<\/b><\/p>\n<\/td>\n | \n \n$37\n<\/p>\n<\/td>\n | \n $22<\/b><\/p>\n<\/td>\n | \n \n$37\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGrant income in equity earnings\n<\/p>\n<\/td>\n | \n $5<\/b><\/p>\n<\/td>\n | \n \n$12\n<\/p>\n<\/td>\n | \n $11<\/b><\/p>\n<\/td>\n | \n \n$12\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-facility system-wide net patient service revenues (c)\n<\/p>\n<\/td>\n | \n $1,333<\/b><\/p>\n<\/td>\n | \n \n$888\n<\/p>\n<\/td>\n | \n $2,527<\/b><\/p>\n<\/td>\n | \n \n$2,008\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Volume Changes versus the Prior-Year Period<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/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 (c)(d)\n<\/p>\n<\/td>\n | \n 68.2%<\/b><\/p>\n<\/td>\n | \n \n(41.6)%\n<\/p>\n<\/td>\n | \n 29.1%<\/b><\/p>\n<\/td>\n | \n \n(25.7)%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nSame-facility system-wide surgical cases on same-business day basis (c)(d)\n<\/p>\n<\/td>\n | \n 68.2%<\/b><\/p>\n<\/td>\n | \n \n(41.6)%\n<\/p>\n<\/td>\n | \n 30.1%<\/b><\/p>\n<\/td>\n | \n \n(26.3)%\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 | \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 $275<\/b><\/p>\n<\/td>\n | \n \n$118\n<\/p>\n<\/td>\n | \n $519<\/b><\/p>\n<\/td>\n | \n \n$274\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $295<\/b><\/p>\n<\/td>\n | \n \n$167\n<\/p>\n<\/td>\n | \n $552<\/b><\/p>\n<\/td>\n | \n \n$323\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA less facility-level NCI excluding grant income\n<\/p>\n<\/td>\n | \n $176<\/b><\/p>\n<\/td>\n | \n \n$78\n<\/p>\n<\/td>\n | \n $336<\/b><\/p>\n<\/td>\n | \n \n$178\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA less facility-level NCI\n<\/p>\n<\/td>\n | \n $187<\/b><\/p>\n<\/td>\n | \n \n$106\n<\/p>\n<\/td>\n | \n $356<\/b><\/p>\n<\/td>\n | \n \n$206\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA less total NCI excluding grant income\n<\/p>\n<\/td>\n | \n $172<\/b><\/p>\n<\/td>\n | \n \n$77\n<\/p>\n<\/td>\n | \n $328<\/b><\/p>\n<\/td>\n | \n \n$176\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA less total NCI\n<\/p>\n<\/td>\n | \n $182<\/b><\/p>\n<\/td>\n | \n \n$104\n<\/p>\n<\/td>\n | \n $347<\/b><\/p>\n<\/td>\n | \n \n$203\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 341 facilities at June 30, 2021, the results of 109 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> volume changes 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 $664 million in Q2\u201921, an increase of 80.4 percent compared to $368 million in Q2\u201920 primarily reflecting significantly higher volumes given the impact of the pandemic in Q2\u201920, higher patient acuity, new service line growth and additional revenues associated with the SCD portfolio acquisition completed in December 2020, partially offset by the sale of the urgent care centers and the realignment of the imaging centers under the Company\u2019s Hospital segment in Q2\u201921.\n<\/li>\n
- \nSurgical business same-facility system-wide net operating revenues increased 50.1 percent in Q2\u201921 compared to Q2\u201920, with cases up 68.2 percent and revenue per case down 10.7 percent. The decline in revenue per case reflects lower acuity cases being deferred in Q2\u201920 in light of the pandemic.\n<\/li>\n<\/ul>\n
Adjusted EBITDA<\/span><\/i><\/p>\n\n- \nSegment Adjusted EBITDA of $295 million in Q2\u201921 ($275 million excluding $20 million of grant income) compared to $167 million in Q2\u201920 ($118 million excluding $49 million of grant income).\n<\/li>\n
- \nAdjusted EBITDA less facility-level noncontrolling interest (NCI) in Q2\u201921 was $187 million ($176 million excluding grant income) compared to $106 million in Q2\u201920 ($78 million excluding grant income).\n<\/li>\n<\/ul>\n
Conifer Segment Results<\/span><\/b><\/p>\nTenet\u2019s Conifer business segment provides comprehensive end-to-end and focused-point business process services, including hospital and physician revenue cycle management, patient communications and engagement support and value-based care solutions to hospitals, healthcare systems, physician practices, employers and other clients.<\/i><\/p>\n The Company continues to work on spinning off its Conifer segment. This transaction is expected to both enhance shareholder value and reduce the level of Tenet\u2019s debt through a tax-free debt-for-debt exchange.<\/i><\/p>\n\n\n| \n Conifer segment results ($ in millions)<\/i><\/b><\/p>\n<\/td>\n | \n Q2\u201921<\/b><\/p>\n<\/td>\n | \n Q2\u201920<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201921<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201920<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet operating revenues\n<\/p>\n<\/td>\n | \n $319<\/b><\/p>\n<\/td>\n | \n \n$305\n<\/p>\n<\/td>\n | \n $629<\/b><\/p>\n<\/td>\n | \n \n$637\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $90<\/b><\/p>\n<\/td>\n | \n \n$73\n<\/p>\n<\/td>\n | \n $176<\/b><\/p>\n<\/td>\n | \n \n$160\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Revenues<\/span><\/i><\/p>\n\nDuring Q2\u201921, Conifer segment revenues increased 4.6 percent to $319 million, from $305 million in Q2\u201920, primarily due to client volume improvement versus the prior year and business expansions, partially offset by the previously disclosed revised terms associated with its contract with Tenet hospitals.\n<\/p>\n Adjusted EBITDA<\/span><\/i><\/p>\n\nConifer generated $90 million of Adjusted EBITDA in Q2\u201921, up 23.3 percent compared to $73 million in Q2\u201920. Conifer\u2019s Adjusted EBITDA margin increased to 28.2 percent in Q2\u201921 compared to 23.9 percent in Q2\u201920 primarily due to revenue growth and continuing expense discipline.\n<\/p>\n Balance Sheet, Cash Flows and Liquidity<\/span><\/b><\/p>\nBalance Sheet Highlights<\/span><\/i><\/p>\n\n\n| \n ($ in millions)<\/i><\/p>\n<\/td>\n | \n June 30, 2021<\/b><\/p>\n<\/td>\n | \n March 31, 2021<\/b><\/p>\n<\/td>\n | \n December 31, 2020<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nCash and cash equivalents\n<\/p>\n<\/td>\n | \n $2,194<\/b><\/p>\n<\/td>\n | \n \n$2,141\n<\/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 55.2<\/b><\/p>\n<\/td>\n | \n \n55.8\n<\/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 | \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 4.17<\/b><\/p>\n<\/td>\n | \n \n4.37\n<\/p>\n<\/td>\n | \n \n4.70\n<\/p>\n<\/td>\n<\/tr>\n | \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 | \n | <\/tr>\n<\/table>\n\n- \nCash and cash equivalents at June 30, 2021 were $252 million lower than December 31, 2020 reflecting the Company\u2019s early retirement of $478 million of 7 percent debt in the first quarter of 2021.\n<\/li>\n
- \nIn 2020, the Company received approximately $1.5 billion of Medicare advance payments from the Centers for Medicare and Medicaid Services (CMS). Repayment terms for the Medicare advance payments begin 12 months from the provider\u2019s 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 these advance payments in Q2\u201921 (with approximately $164 million repaid in the quarter) 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 June 30, 2021. In April 2021, the Company renewed an additional one-year commitment to continue to increase the borrowing capacity from $1.5 billion to $1.9 billion.\n<\/li>\n
- \nThe Company\u2019s ratio of net debt plus the Medicare advances liability to Adjusted EBITDA was 4.17x at June 30, 2021 compared to 4.37x at March 31, 2021 and 4.70x at December 31, 2020.\n<\/li>\n<\/ul>\n
Cash flows and liquidity<\/span><\/i><\/p>\nReconciliations of net cash provided by operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.<\/i><\/p>\n\n\n| \n ($ in millions) <\/i><\/p>\n<\/td>\n | \n Q2\u201921<\/b><\/p>\n<\/td>\n | \n Q2\u201920<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201921<\/b><\/p>\n<\/td>\n | \n YTD Q2\u201920<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet cash provided by operating activities\n<\/p>\n<\/td>\n | \n $245<\/b><\/p>\n<\/td>\n | \n \n$2,239\n<\/p>\n<\/td>\n | \n $779<\/b><\/p>\n<\/td>\n | \n \n$2,368\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nCapital expenditures\n<\/p>\n<\/td>\n | \n $(122)<\/b><\/p>\n<\/td>\n | \n \n$(106)\n<\/p>\n<\/td>\n | \n $(243)<\/b><\/p>\n<\/td>\n | \n \n$(288)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nFree cash flow\n<\/p>\n<\/td>\n | \n $123<\/b><\/p>\n<\/td>\n | \n \n$2,133\n<\/p>\n<\/td>\n | \n $536<\/b><\/p>\n<\/td>\n | \n \n$2,080\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted free cash flow\n<\/p>\n<\/td>\n | \n $157<\/b><\/p>\n<\/td>\n | \n \n$2,179\n<\/p>\n<\/td>\n | \n $621<\/b><\/p>\n<\/td>\n | \n \n$2,194\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet cash used in investing activities\n<\/p>\n<\/td>\n | \n $(50)<\/b><\/p>\n<\/td>\n | \n \n$(85)\n<\/p>\n<\/td>\n | \n $(195)<\/b><\/p>\n<\/td>\n | \n \n$(289)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet cash provided by (used in) financing activities\n<\/p>\n<\/td>\n | \n $(142)<\/b><\/p>\n<\/td>\n | \n \n$747\n<\/p>\n<\/td>\n | \n $(836)<\/b><\/p>\n<\/td>\n | \n \n$1,173\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n- \nThe Company produced positive free cash flow of $123 million in Q2\u201921 and $536 million YTD Q2\u201921. Free cash flow in the 2020 periods included approximately $2.052 billion of Medicare advance payments and grant funds associated with pandemic stimulus legislation.\n<\/li>\n<\/ul>\n
Company Outlook<\/span><\/b><\/p>\n\n- Reconciliations of Outlook net income available to Tenet common shareholders to Outlook Adjusted EBITDA for the year ending December 31, 2021 (FY 2021) and the quarter ending September 30, 2021 (Q3\u201921) are contained in Table #4 at the end of this release.<\/i><\/li>\n
- Reconciliations of Outlook net income available to Tenet common shareholders to Outlook Adjusted net income from continuing operations to common shareholders for FY 2021 and Q3\u201921 are contained in Table #5 at the end of this release. <\/i><\/li>\n
- Reconciliations of Outlook net cash provided by operating activities to Outlook free cash flow and Outlook Adjusted free cash flow from continuing operations for FY 2021 are contained in Table #6 at the end of this release.<\/i><\/li>\n<\/ul>\n
\nTenet\u2019s Outlook for FY 2021 and Q3\u201921 on a consolidated basis and by segment follows:\n<\/p>\n \n\n| \n CONSOLIDATED <\/i><\/b>($ in millions except per share amounts) <\/i><\/p>\n<\/td>\n | \n FY 2021 Outlook (g)<\/sup><\/b><\/p>\n<\/td>\n| \n Q3\u201921 Outlook (g)<\/sup><\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet operating revenues\n<\/p>\n<\/td>\n | \n $19,250 to $19,650<\/b><\/p>\n<\/td>\n | \n \n$4,600 to $4,800\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 $681 to $781<\/b><\/p>\n<\/td>\n | \n \n$335 to $375\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $3,150 to $3,250<\/b><\/p>\n<\/td>\n | \n \n$700 to $750\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted EBITDA margin\n<\/p>\n<\/td>\n | \n 16.4% to 16.5%<\/b><\/p>\n<\/td>\n | \n \n15.2% to 15.6%\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDiluted income per common share from continuing operations\n<\/p>\n<\/td>\n | \n $6.25 to $7.17<\/b><\/p>\n<\/td>\n | \n \n$3.07 to $3.44\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted net income from continuing operations\n<\/p>\n<\/td>\n | \n $570 to $625<\/b><\/p>\n<\/td>\n | \n \n$80 to $115\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAdjusted diluted earnings per share from continuing operations\n<\/p>\n<\/td>\n | \n $5.23 to $5.73<\/b><\/p>\n<\/td>\n | \n \n$0.73 to $1.06\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nEquity in earnings of unconsolidated affiliates\n<\/p>\n<\/td>\n | \n $210 to $230<\/b><\/p>\n<\/td>\n | \n \n$45 to $55\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDepreciation and amortization\n<\/p>\n<\/td>\n | \n $850 to $870<\/b><\/p>\n<\/td>\n | \n \n$205 to $215\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$225 to $235\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nNet income available to NCI\n<\/p>\n<\/td>\n | \n $565 to $585<\/b><\/p>\n<\/td>\n | \n \n$135 to $145\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nWeighted average diluted common shares\n<\/p>\n<\/td>\n | \n ~109 million<\/b><\/p>\n<\/td>\n | \n \n~109 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 $1,150 to $1,450<\/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 $1,300 to $1,550<\/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 $600 to $800<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\n| \n (f)<\/i><\/p>\n<\/td>\n | \n The effective tax rate is calculated as income tax expense divided by the adjusted pretax income. Income tax expense is calculated by multiplying 24% (the federal corporate tax rate of 21% plus an estimate of state taxes) by the sum of: adjusted pretax income less GAAP NCI expense plus permanent differences, non-deductible interest expense and non-cash NCI expense related to the portion of USPI the Company does not own.<\/i><\/p>\n<\/td>\n<\/tr>\n\n| \n (g)<\/i><\/p>\n<\/td>\n | \n Guidance assumes completion of the pending sale of Miami-area facilities to Steward during Q3\u201921.<\/i><\/p>\n<\/td>\n<\/tr>\n<\/table>\n\n\n| \n Hospital Segment <\/i><\/b>($ in millions) <\/i><\/p>\n<\/td>\n | \n FY 2021 Outlook (g)<\/sup><\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNet operating revenues\n<\/p>\n<\/td>\n | \n $15,805 to $16,075<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nAdjusted EBITDA\n<\/p>\n<\/td>\n | \n $1,575 to $1,645<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNCI\n<\/p>\n<\/td>\n | \n $35 to $40<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nChanges versus FY 2020 (h):\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nInpatient admissions\n<\/p>\n<\/td>\n | \n Flat to up 3%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nOutpatient visits\n<\/p>\n<\/td>\n | \n Up 13% to 17%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nAdjusted admissions\n<\/p>\n<\/td>\n | \n Up 2% to 5%<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n\n\n| \n Ambulatory Segment <\/i><\/b> | | | | | | | | | | | | | | | | | | | | | | | | | | | |